Seattle’s Progressive Revenue Task Force has finalized a set of recommendations for a so-called “head tax” that could raise $75 million a year to help create housing and provide homelessness services. UPDATE: The final report (PDF) released March 9th pushes the amount the city should raise to an estimated $150 million — $75 million of which would come from the head tax.
The recommendations were finalized last week in advance of a deadline legislated last year as the City Council agreed to back away from an earlier plan to tax large businesses a per-employee tax that would have raised only around $25 million per year.
“We believe it is imperative to raise a substantial amount of revenue -– enough to make a measurable and significant impact on the crisis –- so that the community sees tangible results from this new investment,” the task force report reads. “People are tired of half-measures and want to see real progress.”
The task force chaired by council members Lorena González and Lisa Herbold is recommending that the council pass “an Employee Hours Tax (EHT) to generate new revenue to address the housing and homelessness crisis.” The group which included a mix of affordability and homelessness service advocates and business representatives, says the legislation should be passed “early enough to ensure that such taxes can be imposed as of January 1, 2019.”
In February, housing and affordability experts met in a Seattle Housing Gap public forum to discuss how money from a progressive revenue tax could best be put to use to address homelessness and soaring rents in the city. One clear takeaway was the scope of the problem. To build the apartment units required, the city and county would need an estimated $5.1 billion to permanently shelter the more than 30,000 individuals in the region in need, many of whom have extra needs in addiction recovery and mental health in addition to homelessness.
$75 million, the task force writes in its report, “is not enough or even close to enough to adequately address the crisis, but it is a significant and worthwhile start.”
In the report, the task force suggests a set of variables for the council to consider as it shapes the final legislation and the filters for which businesses will be included in the tax:
“Exemptions should not be granted because of the political clout or influence of a particular business or sector,” the task force report reads. “There should be sound, defensible reasons for any exemptions that are granted.”
The task force recommendations also include the body’s advice for the city council on how the funding should be utilized:
Given the severe shortage of deeply affordable housing and the bottleneck that already impedes the transition from shelter to housing, and ultimately the barriers to reducing the numbers of people living unsheltered, we recommend that a strong emphasis be placed on housing in the dedication of revenue from the EHT. Specifically, we suggest a rough 80%-20% split in revenue between funding for housing, and funding for emergency shelter and services.
You can read the draft report (PDF) here. UPDATE: The final $150 million update to the report is posted here (PDF).
The city council is expected to take up the recommendations and begin shaping the tax legislation this month.
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