City council passes scaled-down head tax

One of Seattle’s most controversial proposals in years passed unanimously in city council today — but after some significant revisions.

The council voted 9-0 to require large Seattle businesses to pay $275 per employee in taxes for housing and homeless services. It sunsets in 2023. That’s down from $500 per employee proposed in the initial head tax plan, which faced a potential veto from Mayor Jenny Durkan.

The head tax will raise $45-49 million a year, down from the $75 million a year in the earlier proposal that prompted a sharp response from Amazon and a racous community meeting.

Here’s more on the story from KOMO News and the Seattle Times.

42 comments on “City council passes scaled-down head tax”

  1. > See upcoming events in our Ballard calendar <

  2. Ah, I see Durkan decided she just wanted to be a one term mayor. Got it.

  3. Even though this is close to the Mayor’s proposal, she should veto this. A head tax isn’t necessary; clear, sensible heads are. There is a solution through collaboration, not confrontation.

  4. Damn, now we’ll only be able to buy half the number of new bums to scatter around Seattle.

  5. Ever think maybe the reason they voted 9-0 for this is that they took the pulse of their constituents and found out this is what the people want them to do? They got elected in the first place because they are popular. They said they would do things exactly like this, and that made them popular. This policy is popular. You guys who want to get rid of all of them are UN-popular. As in you’re going to keep losing.

    Also remember how you all said it was going to collapse around our ears when they raised the minimum wage to $15? Oops. Wrong, weren’t you? Lesson learned? Nope. Looks like you’re going to predict doom again, and be wrong again, and be left with nothing but your anger.

    It doesn’t have to be this way. Turn off the Jason Rantz and the Dori Monson. Turn off Fox New. Ignore the Seattle Times editorial page. Try a fact-based approach. This policy is a compromise and so obviously it’s far from perfect. You could criticize it for all sorts of reasons. But you will still need to get some facts and not a lot of rightwing talk radio nonsense. Look at the record: that nonsense doesn’t work.

  6. Elenchos, I’ll bet you a testicle we’ll have even more bums in 5 years, while the national numbers continue their decade long decline.

    Feed a stray, get more strays.

  7. You know Simon, the only reason I have to come here is to mock lunatics posting crazed nonsense like ‘buying bums to scatter around’. Stop posting that crazy nonsense, and nobody will have to sit here lecturing you. Facts. Get some facts. Try it.

  8. No right wing commentators in my ear and what is Fox New? Also, I refuse to watch Fox News(?). My comment came from common sense, not idealism; throwing money at a problem or an issue without monitoring how it’s spent is foolish, dumb, asinine … take your pick.

  9. Bizarro, let’s leave it alone; as a native Seattleite I’m passionately attached to my city, not to the blight that’s affecting it; I guess that must include you. Good-bye.

  10. The Seattle City Council needs to up its troll game: since Amazon stopped construction, they should tell Amazon that the recently passed ST3 will not have an Amazon stop (since they threatened to leave Seattle), instead it will now build Ballard to UW instead, which will be built faster, carry more people than Ballard through Interbay, and will save taxpayer money. Of course, if they want to keep ST3 the way it is, they can put up even more money for more housing.

  11. This just out: Amazon announced they are dropping plans for selecting an HQ2 location and are now looking for a HQ1 location. Boeing recommends Chicago.
    Here is a fact –
    KIRO News poll – 54% Seattle voters oppose a head tax. Only 38% support it. This extremist city council has commandeered control of Seattle and is having a spending free-for-all at the expense of its taxpayers.
    Here is what Starbucks said –
    “This City continues to spend without reforming and fail without accountability, while ignoring the plight of hundreds of children sleeping outside. If they cannot provide a warm meal and safe bed to a five year-old child, no one believes they will be able to make housing affordable or address opiate addiction. This City pays more attention to the desires of the owners of illegally parked RVs than families seeking emergency shelter,” John Kelley, Senior vice president for Starbucks Global Public Affairs and Social Impact said in a statement to KOMO News on Monday evening.
    Yet there is hope –
    Republican State Sen. Mark Schoesler said he’s ready to introduce a bill to repeal the tax.

  12. I agree with guest – Amazon and UW employ close to the same number of people in Washington state (not including the 40,000 UW students). Plus UW generates $12.5 billion a year in economic activity and generates $152 million in direct tax revenue on the state’s $254 million investment. Meanwhile, UW gets no coverage in the Seattle times and no love from the city or state for its employment, innovation and economic development. Amazon, in contrast hoards its taxable revenue in offshore accounts and everyone has their panties in a twirl if Amazon is “displeasured”. Giant corporations are not your friend.

  13. @guest: Amazon announced this morning, after the head tax vote, that construction was still on for Block 18, their next large complex. Their anti-head tax threats were a bluff and the council saw through it. Everybody, especially Amazon, knows how good they have it in Seattle and Washington, especially with no income tax for their employees. They aren’t moving any time soon. And other prospective cities for HQ2 are going to see how much having Amazon in their city is going to cost them.

    @Josh: Republican State Sen. Mark Schoesler said he’s ready to introduce a bill to repeal the tax.

    So a GOP senator from Ritzville is going to try to pass legislation to force Seattle to not tax itself? Wouldn’t Ritzville and Eastern Washington scream bloody murder if Reuven Carlyle tried to pass a measure forcing Ritzville to do something? Hypocritical much? Luckily, his measure will go nowhere.

    And good lord that Starbucks quote! John Kelley must be a member of Next Door!

  14. We have 3.8% unemployment, which is as close to full employment as one can get in reality. We have a $15min wage and aggressive Affirmative Action hiring practices.

    The fact is, if you want to work in Seattle you can work. People like Truth and Elenchos have painted themselves (haha if they could, you know, actually paint) into a corner by saying that Seattle is liberal success story but is also a woeful Dickensian (google that if it is hard, Elenchos, they might have banned his books in your school) place of exclusionary capitalist exploitation where the the poor are trampled upon.

    Well, which is it?

    You can’t make the lazy junkies work or keep or roof over their heads. Truth, It’s funny you have such a low regard for people like Bezos (hey I don’t like him either) but think the tent dwelling junkie thieves are saints. Comedy!

    In reality, the city has no idea what to do with the massive population of defectives and simply taxes biz to pay for vague, ineffective “solutions”. These people are all narcissist hypocrites. Sawant’s book is on sale ON AMAZON. You can’t make this stuff up because if it were fiction no reader would suspend disbelief.

    Oh, and Truth, you get bonus points for the condescending tone about “Ritzville”. I hope your latte wasn’t too hot.

  15. This from King 5:

    The debate has most often focused on Amazon, but there are roughly 600 businesses that will be affected, some more than others. One of those is the iconic Dick’s Drive-In.

    “That’s what’s really frustrating, this isn’t about Amazon at all,” said Saul Spady, whose grandfather founded Dick’s back in 1954. “This is a tax on high-volume, low-margin businesses, like restaurants, and that’s where it’s going to put the most pain. And it’s making restaurants like Dick’s Drive-ins think really strongly about do we make our workforce more efficient, do we give less money to charity, or maybe we just don’t be a business in Seattle.”

    So long Dick’s Deluxe. The unintended consequences of this decision are going to sting.

  16. @Sockpuppet: Your comment shows your your complete lack of grasp on reality. We’ve been over this before and I understand you have trouble comprehending facts, but provide: addiction treatment, mental health services, shelter and job training and you’ll see the homeless problem dissipate.

    And by all means, please tell me why Ritzville should dictate tax code in Seattle.

    But I understand that you’re just a mentally ill individual having some sort of breakdown on a neighborhood blog comment section, so I’ll understand when you don’t respond with facts, sources or even a well thought out response (you never do). I will, however, direct you to the King County Mental Crisis hotline. I’d recommend you give it a call: 206-461-3222. You’ll be better for it!

  17. @Truth
    I’ll take your lack of a substantial rebuttal as an indication you have accepted the reality that your stance is defeated.

    Snark is for children, or increasingly, ideologically entrenched leftists. It’s isn’t a “good look”.

  18. @Sockpuppet:

    Snark is for children, or increasingly, ideologically entrenched leftists. It’s isn’t a “good look”.

    But perfectly fine for you right wing nut jobs to use it instead of making well thought out rebuttals with facts and sources…got it!

    YOUR TAX DOLLARS AT WORK:

    *pats Sockpuppet on the head* Sure thing buddy, whatever you say… Did you call the mental crisis hotline yet?

  19. @truth. Ok, I’d ask ST to ask how much money we’d save, given Amazon’s apprehension, to not have a stop (but keep it as possible infill station like Graham St or 130th St).

  20. @truth….

    well, have you ever been to Ritzville? Wonderful little town. And the reality of economics is what happens in Seattle doesn’t stay in Seattle. Ritzville is in the middle of wheat country, and most of the wheat grown in Washington ends up in the grain silos just below Magnolia. BNSF trains deliver that wheat. The Port of Seattle and longshoremen/women (union jobs) load the grain. Wheat farmer in Ritzville gets paid and guess what? Spends money on Amazon, REI, a law firm in Seattle, a new tractor that may be imported through the Port of Seattle. So what happens in Seattle impacts Ritzville and vice versa. To think we live in little silos all over the state, with no one silo impacting the other is naive. We are not only a global economy, our state economy is very connected. Having thriving businesses in the major city of our state is critical to every resident of the state. If prices rise because of the head tax or unemployment increases, it will also impact the wheat farmer in Ritzville.

    Last, homelessness is also a state wide issue. The state has far more resources and tools to help with addiction, runaway children living on the streets, children (particularly young women) who are used in sex trade, mental health issues, disability payments, medicaid. Having folks from the state legislature get involved in this issue will be critical to finding ways of mitigating the “crisis” here in King County/Seattle.

    A grain of wheat blows in the wind in Ritzville and a homeless person finds housing in Seattle.

    Visit Ritzville the next time you blast east on I-90.

  21. Hey, tax lovers, you’re really just driving up the cost of living and choking business. Groceries aren’t expensive enough for you guys, and I think THE POOR buy groceries too, right?

    http://mynorthwest.com/988746/dicks-drive-in-head-tax/

    “It’s not about Amazon at all,” he said. “This is about high-volume, low-margin businesses, like grocery stores.”

    Businesses could come up with any number of trade-offs to make up for the loss of $275 per employee, per year. This could take the form of more expensive groceries, smaller and fewer donations to charities, or even layoffs, according to Spady.

    He pointed to the solution proposed by his sister, Dick’s Drive-In Executive Vice President Jasmine Donovan, in her May 2 Seattle Times op-ed piece. In it, Donovan suggested that rather than a head tax, businesses be forced to donate that amount of money to a city-approved charity that directly works with the homeless.”

  22. November is gonna be rough for these clueless politicians. STop scaring away the job market! NO new taxes

  23. Hey libtards, does a business pay taxes and fees? Or do their customers/consumers? Wake the F up you book-smart fools. You people are worse than Kim Jung, as he too would sacrifice a “large American city”. Your smug arrogant nature is getting worse and unbearable. Elenchos + Truth: own your mess. Own your votes. Own this mess of a city. Take pride in what YOU created. People are leaving and being replaced by more left-wrong drones. Yes, all “the right folks” will now be your neighbors. All “good democRATS” too.

  24. Book smart fools equipped with a top notch public education from states willing to impose taxes took your jobs because you couldn’t be bothered to pay taxes for education and infrastructure. Who’s the fool again?

  25. “We have 3.8% unemployment, which is as close to full employment as one can get in reality. We have a $15min wage”

    But you said that wasn’t going to happen. You said businesses would flee the city and there would be no jobs. You said the city would fall into ruin. You were quite adamant in your predictions. You were dead certain that $15 per hour was the death knell of a once-great city. It was all because your entire outlook is based on coddling business and letting them off the hook for any basic responsibilities.

    You also predicted that everyone who passed the wage increase would be run out of office. Oops. It’s almost like you have no idea at all what the majority of this city thinks and what they want. When was the last time you walked down a street here? Talked to anybody outside stormfront or 4chan? Talked to a normal, real, live person, in this actual city? You were certain the people didn’t want $15 per hour.

    How wrong you were. Now you guys are back with the same doom and gloom. I think we’d have better luck giving street addicts second and third and fourth chances to start making the right decisions with their lives than waiting for you old cranks to ever adjust your ideology to match the reality smacking you in the face.

  26. @KAM: I’ve been to Ritzville. Nice little town. My intent was not to pick on Ritzville, but more the politician that hails from Ritzville.

    Eastern Washington is notorious for politicians who hate when Olympia passes laws that affect them. So it’s very hypocritical of them to pass laws that affect a Western Washington City, even if it is the largest City in the State.

    I hear what your concerns about the head tax affecting the Seattle’s economy, the state economy and eventually Ritzville. It’s a concern for sure, but I don’t believe for one second that Mark Schoesler has the interests of Seattle or the State in mind. He just comes off as a anti-tax warrior that is probably concerned that a head tax could become common place in our state. Plus, he can come back to his constituents and say how he tried to fight the evil large City’s tax.

    Seattle and Washington have a homeless problem. If Schoesler was truly concerned, he would have a parallel bill in the state to provide for state level funding to solve the homeless, drug and mental problem. But he didn’t, hence why I’m calling him out.

  27. @Elenchos
    Not sure who you’re addressing specifically, as I’ve never weighed in on the $15min before – but you missed my point entirely with your word salad rant about 4chan etc. In fact, the $15min and the soda pop tax has been referenced as being part of the closure of many small restaurants, but don’t let that get in the way of your leftist cult diatribe.

    So, to help walk you through the parts that seem fogged with bong water:

    If the jobs ARE THERE and they pay A LIVING WAGE then NOTHING MORE can be done. The hard lifer addicts are not going to suddenly put themselves into treatment, get a job, and then get housed. This tax swindle is just another revenue grab by our corrupt, inept, rainbow daydream lollipop leadership. Numerous former addicts have weighed in about how the city’s approach simply enables the addicts.

    Now we have a tax, and the camp sweeps will be stopped. We could build a giant safe, clean facility for the homeless but even if we did, we cannot force them to use it. There is no incentive for any person to better themselves. Hitting your neighbors with tax after tax – many of whom work very hard and are by no means wealthy – is the worst kind myopic, narcissistic, passive aggressive hostility. To make it even worse, you do everything you can to MAINTAIN THE FLOW OF HEROIN from Mexico by sabotaging border enforcement with the “sanctuary city” fiasco. Your kind is so patently wrong about this whole mess that you’re clinging to some copypasta boilerplate from Huffpo because this whole mess is unraveling in real time. Congratulations.

  28. @truth:

    Actually the State did pass legislation for over $200 M in affordable housing benefits that will land in King County/Seattle this past session. I think Schoesler’s concerns, other than the ones I outlined, also include the City of Seattle setting a precedent in levying taxes that may not be allowed under the state constitution. Whether he is right about it or not, is not for me to say, but it is certainly his right to ask his colleagues to debate whether Seattle actually has that authority.

    My issue on this is, like many others, having some accountability and transparency in where all the current funding is going, who makes the decisions about allocations, whether the NGOs have annual independent audits, whether there is a “master plan” for the region in dealing with mental health (which is a state mandate), addiction, economic displacement, lack of affordable housing, Growth Management and environmental issues. I am beginning to think since the previous mayor and County Executive Dow Constantine declared a homeless crisis we should have a single person responsible for regional efforts, where they have goals and objectives that must be met, they can hold NGOs accountable, they can provide reporting to the public and policy makers about progress, they can negotiate with the state for other resources, such as mental health and addiction help, work on medicaid and disability issues….but I think what is happening in Seattle right now is some sort of tipping point. Real estate owners are gasping at the recent real property tax increases, sales tax is one of the highest in the nation, and now we have another tax, plus Mayor Durkan talking up another huge increase in an education levy…all the time most voters haven’t a clue where all the money is going and empirical evidence seems to indicate, at least with homeless, that the numbers are increasing and the “street issues” seem to be getting worse. If this was a private enterprise, someone would be losing their jobs…right?

  29. @Kam:

    Actually the State did pass legislation for over $200 M in affordable housing benefits that will land in King County/Seattle this past session.

    The problem is that that’s about half of what multiple independent studies have shown is needed to effectively solve the problem. If we half-ass the problem, it won’t half solve the problem.

    I think Schoesler’s concerns, other than the ones I outlined, also include the City of Seattle setting a precedent in levying taxes that may not be allowed under the state constitution.

    Then he should have filed suit in the State Supreme Court, who will decide constitutionality. A bill is nothing more than grandstanding and he knows that. If he doesn’t know that, he shouldn’t be a politician.

    …we should have a single person responsible for regional efforts

    Agreed. I’m going to write my district Councilmember and the two at-large Councilmembers to suggest that. I encourage you and everyone else to do so.

    Real estate owners are gasping at the recent real property tax increases, sales tax is one of the highest in the nation, and now we have another tax, plus Mayor Durkan talking up another huge increase in an education levy…

    Remember, we have one of the lowest taxes rates in the country, as well as one of the most regressive, especially since there’s no income tax. A high sales tax is pretty much worthless as a funding source. Real estate taxes are about in the middle of the country, although property values are high; you can thank people shutting down building density for that one.

  30. @truth

    Schoesler can’t file suit. he doesn’t have standing. His only recourse is legislative. If one of the businesses impacted by the Head Tax want to, they can file litigation.

    $200 M is only for affordable housing and is on top of the affordable housing levy we just passed plus the HALA assessments on development….I think before we tax even more we need to find out what we are getting for our dollars.

    I’ve lived in NY, so I know something about high real property taxes. I will say my real property taxes in NY seemed better invested and spent than out here, to be honest. If however, you are lower or middle class, the sales tax and other regressive taxes (I own my own business and pay B & O) are extremely painful. And frankly, I really don’t think “people have shut down building density.” As far as I can see, housing is being built. Transit corridors along the old monorail lines are building up quite nicely in Ballard and West Seattle, the U District was just up zoned, as was SLU. And I see for lease signs all over town. Major developers are actually slowing down their housing work because we are close to being at capacity (talk with folks at Vulcan if you want to skivvy on housing development).

    The drum beat of needing more and more money and more and more forms of taxation is a slippery slope given the times we are currently in. At some point, truly, there will be a backlash. I highly doubt even a fully flushed out D state legislature will vote in an income tax…way too many stakeholders who know how to game the system down there plus it is politically toxic in areas where there still are rural D’s (think Brian Blake).

    Last, the other issue with the Head Tax is the perception of cozy relationships between the grantees or contractees of homeless services and City Hall. The Town Hall in Ballard a week ago, where City Hall insiders wanted to “tell us” about the Head Tax for 90 minutes then take curated questions submitted before the “talk” was also a tipping point in how political elites communicate with their constituents. I’ve facilitated many public meetings, attended even more, testified in front of all levels of government, and the lack of respect that many from our city government have toward the “governed” is sad. Suppressing disagreeable opinions is a hallmark of Trump. It shouldn’t be the hallmark of Mike O’Brien et al. So, part of the Head Tax back lash also has to do with the feeling, from both businesses and individuals, that they are not just forgotten at City Hall, but actively ignored.

  31. @Kam:

    Schoesler can’t file suit. he doesn’t have standing. His only recourse is legislative. If one of the businesses impacted by the Head Tax want to, they can file litigation.

    He can sue as a citizen. By trying to force legislation, he’s not addressing constitutionality, but he’s definitely setting up Seattle to sue the State if it were to pass. He’s setting a bad precedent of the State banning local jurisdictions from taxing themselves as allowed the State constitution (head tax hasn’t been tested yet).

    I will say my real property taxes in NY seemed better invested and spent than out here, to be honest.

    NYC and Boston (recently visited) have a long history of homelessness and they seemed to have solved or at least greatly mitigated, it long ago. Boston, for example, has plentiful shelters, access to mental illness treatment and drug addiction rehabs. We are playing catch up to a problem that reared it’s ugly head very rapidly, although there was plenty of indication of the problem brewing for years. But we have the issue of people shouting down solutions (shelters, mental and drug rehab services) because they don’t want them in their neighborhood, so tax money gets spent trying to mitigate the problem, and fails horribly, but as expected. Add to that absolutely no will at the national level to do anything about the problems, so it trickles down to the local level.

    If however, you are lower or middle class, the sales tax and other regressive taxes (I own my own business and pay B & O) are extremely painful.

    I am in support of replacing regressive taxes with an income tax. That won’t happen in my lifetime. It’s a death sentence for any politician.

    And frankly, I really don’t think “people have shut down building density.” As far as I can see, housing is being built.

    The issue is that housing isn’t being built high enough. Take Capitol Hill, near the LRT station. Those buildings should be 30, 40, 50 stories high. 15th and Market should be massively high too, especially with LRT coming. The housing market may be fizzling, but we need to have capacity for future growth and developers will start switching to lower priced condos, versus the luxury condos that all new buildings seem to be.

    And I see for lease signs all over town.

    Is this an issue of new spaces being too expensive for low margin businesses? I know retail in SLU is suffering because Amazonians aren’t spending time or money near their workplace (outside of lunch) like Amazon had promised.

    BTW, it’s refreshing to have a well versed discussion on this blog for once.

  32. @ truth

    Indeed, nice discussion….that said, I will repeat, Schoesler doesn’t have standing unless he resides in the City of Seattle (and even then he doesn’t have standing) or owns a business whose gross revenues are 20M or more and his business is not exempt under the exemptions (as in he sells marijuana or runs the Poly Clinic among several others). He may be setting up other issues…

    Both NYC and Boston have also had similar fights over zoning and density, much less horrible gentrification issues displacing homeless. We are not alone in that issue, on either coast….SF, Portland, Boston, NYC. And here is my thing about the economic theory of “if you keep adding supply…” that doesn’t really work in housing, as you know. The dirty little secret is that supply and demand theory taught nowadays in economic departments around the country which is subscribed to by so many….do you know who funds most of the economic departments in our public universities? The Kochs! I kid you not. Read Jane Mayer’s “Dark Money.” Housing is so full of “exceptions” to the supply and demand theory that hundreds of 50′ towers along transit corridors in this city would not solve the problem…Plus you do realize the developers are merely turn-key, right? No one is building condos right now because of the litigation over every defect problem. And the rental housing is turn-key. Developer builds then sells to some fireman’s pension fund in Des Moines, Iowa. They want a ROI.

    The for rent signs are for housing, not retail.

    Honestly, this has been a good discussion. It would be great if we could have it with policy makers who were willing to listen to us go back and forth.

  33. @Kam:

    Schoesler doesn’t have standing unless he resides in the City of Seattle…or owns a business…

    Good point, I was trying to think of a standing he might have, but you’re right, he has none. Nonetheless, he could wait, because somebody will inevitably sue. Although it’s very surprising that nobody has sued yet. Typically, something like this will have a lawsuit filed the next day.

    I agree with you the Economics they teach in college is bunk. As an engineer, I love graphs, equations and the structured parts reality, but I remember looking at the pretty graphs and equations in my Silberberg Econ 101 book and wondering how you can fit those to something as emotionally influenced as an economy.

    That said, the problem with housing supply and demand is that the supply is always artificially capped, due to whatever zoning regulations are in place. While it’s difficult to build your way out of a housing crisis, temporarily removing artificial limits in denser areas helps. For lease signs on housing is definitely a good sign that we’ve finally caught up with demand and things will level out. I just hope it’s not the bursting of the housing bubble and signs of another downturn.

    I have my big bucket of popcorn waiting for the circus sideshow that’s about to happen with the head tax.

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