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‘Real progress’ — Task force recommends $75M Seattle business tax for housing and homelessness services

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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26 thoughts on “‘Real progress’ — Task force recommends $75M Seattle business tax for housing and homelessness services

  1. After we are done paying $14 / night on every short term rental, now we pay on payroll.

    You can throw money at it, but the wonderland that is Seattle has become more and more unaffordable for those who try to live and work in it. perhaps bite the bullet and rehouse the homeless in a lower cost place. $75m would by a lot more up in Everett..

    • Your comment reflects a heartless, classist, illogical and oppressive mindset. Once the homeless are rehoused outside of Seattle, they would no longer be homeless. Would they then have the right to attempt to move back to Seattle, potentially resulting in homelessness again? Or would you like to shackle them all to their new wonderful Everett domiciles?

      Employers should pay more on payroll. It costs money to run a business. If they are no longer profitable because of it, they can go out of business if they see fit. However, the many businesspeople on the group that has come up with this recommendation have analyzed the situation and decided it is the best option for now.

      In the course of me writing this comment, I think Amazon just made $75 million in profit by the way.

    • They can go out of business if they see fit. So well said Max, and so fully encapsulating the thinking behind this proposal.

    • So Max….. are you saying it’s logical and reasonable to say to yourself… Gee, I can’t afford to live in this neighborhood so instead of finding a place that I can afford, I’m going to camp out on the street… really…..

    • Even Alaska airlines is moving to Everett because it’s cheaper,,so not sure it is the ghetto you make it out to be. If you could build 10x housing in a cheaper area which is also growing with jobs, and has where ever else you want to go, it might just be a better solution. I imagine the schools are probably better as well…

    • Businesses that don’t pay a living wage and don’t pay an ethical share of taxes and instead act as a drain on the community should go out of business, yes. Apparently some in this thread don’t see it that way, so are basically saying the same thing as I am. Capitalism creates inequities. They are just fine with those inequities as long as they are benefitting from them.

      And to the other person, yes, I do think people should be able to work and live in Seattle without risk of homelessness. You are basing your response on a hypothetical, as if the suburbs are even affordable and as if there are services there or other necessary connections like family, walkability (for those without transportation beyond public). Sounds like you want to codify Haves and Have Nots, essentially building a moat out of income inequality, even though income inequality is directly tied to other issues such as racism, sexism, homophobia, transphobia, xenophobia and other forms of discrimination (as rears itself in employment, housing and the health care system itself). Basically you want the status quo and to pin the blame on fixing it to those most negatively affected by the problems at hand. I disagree with you.

  2. Of course they could have found market driven solutions, like lowering taxes on new developments to increase supply as new building is slowing due to falling rent prices, but instead this will mean higher prices everywhere in Seattle making it yet more expensive. All the while beds are empty in the city because housing providers are largely unregulated by the city.

    No surprise they went for the higher amount (it started around $50 mil) as the committee was largely made up of people who will be receiving the money.

    • Oh poor developers, with their jobs and millions. They are the true victims here. Definitely lowering their taxes would solve everything. How Orwellian and offensive.

  3. I like a lot of things about progressive politics. But there is a problem: as they increases taxes and redistribute wealth, goods and services become more expensive, and unaffordable to many. So the answer always seems to be raise or create new taxes. The progressives need to understand they’re creating a positive feedback loop. That is, new taxes will inflate our economy (something the developers like) and create a bigger homeless problem in the future.

    I’d consider going after some of the billions in property taxes and construction fees that the City brings-in. I don’t think Seattle need another new tax.

    • Seattle and Washington as a whole needs an income tax. As that isn’t happening any time soon, they are forced to do measures like this to help prevent the suffering and death of homeless people and attempt to prevent the problems that lead to and sustain homelessness. I don’t disagree that potentially the taxes you mentioned would be a better solution than those in this package. I don’t know enough to differentiate. However, an income tax would be the priority as far as I’m concerned (paired with reducing the sales tax if possible).

    • I agree with you that WA needs an income tax, but having Seattle-only do it would probably backfire. Who really believes Redmond, Bellevue, Issaquah, Renton, or any of the other surrounding cities would get on-board? Hell no, they’d immediately start poaching jobs and taxpayers by differentiating themselves from Seattle. BOth people and jobs would move. If they won’t even get on-board with a 5c supermarket plastic bag fee, why would they go for an income tax? Especially since they can do nothing, and just leave Seattle to deal with the bulk of homeless people.

    • @Jimi – you are correct about what would happen if Seattle only were to institute an income tax. I grew up in Pittsburgh which had a city income tax, while the surrounding boroughs did not. It didn’t affect jobs so much, as you only pay the full tax if you live in the city (1% for non-residents, 3% for residents), but even at that modest rate it certainly does discourage people from living in the city.

      I’m sorry Max -but No, I don’t believe that there is any innate right to live in any particular place…. Seattle is somewhat different, in that people really want to live in the city, but it’s really no different from anywhere else. I can’t afford a big house in Medina (or even up on Capitol Hill proper for that matter), but I’ve never had a thought that should pitch a tent there because I think it’s a great neighborhood that’s close to my job… I’ve always lived within my means – even in when I was working my way through college with a part time, minimum wage job – and when that meant having roommates, that’s what I did, when that meant living in a really bad neighborhood, that’s what I did, when that meant bicycle commuting in the dead of winter in upstate NY, that’s what I did…

      In any case I don’t buy that it’s income inequality that is the biggest driver of most of the visible homelessness in Seattle… it’s drug abuse (ease of access and tolerance for) and lack of proper care for people with mental illnesses.

    • Please consult a chart tracking tax rates of all kinds over the last 60 years and another chart tracking inflation-adjusted wages and the distribution of wealth over the same period and get back to us about how progressive politics are problematic because of the imaginary gapping tax maw and redistribution below the 99th percentile that you are seeing. Thanks.

  4. This shouldn’t really surprise anyone. They impose a ridiculous sugary drink tax and think people will just keep consuming as before (instead of switching drinks, or just buying elsewhere). They impose a head tax on employers, and think the employers won’t just cut back on hiring, or move the jobs elsewhere. Amazon, as well as the many local software companies, are the perfect example. What do they actually *make* here? Nothing. All they own are buildings. Buildings can be sold, and jobs can be easily moved. But our City Council clowns just start counting the money, as if they’ve got the upper hand. Brilliant.

  5. “People are tired of half-measures and want to see real progress.” Well, actually a lot of us are tired of the City Council just assuming that throwing more money at it will solve the problem. Two independent groups already concluded we were spending enough, just not in the right areas. How about prove that the $60 million being spend now is being used responsibly. And they say this group includes “business representation” and this is a lie. The only businesses represented are businesses in the homeless business.

  6. Morons throw out bird seed and then wonder why they have a pigeon problem.


    More bird seed!

    • I agree. While some people will take issue with the pigeon analogy, it sums up better than anything else why the problem gets worse no matter how much money we throw at it. Provide people living in encampments, doorways and parks the option of a shelter bed and support services. If they don’t take it, they should be moved along. You can’t have taxpayer funded vans driving around handing out sandwiches, tents and sleeping bags and expect it will solve the street homelessness problem. We can’t turn a blind eye to piles of stolen bike parts and Iphones and then wonder why crime is so high. We need compassion AND common sense.

  7. My question is: Say we house the homeless. But how will people who don’t have sufficient income pay for the housing once they have it? If they get evicted a few months after obtaining some kind of subsidized housing, then what?
    I’m guessing that building more housing would be great for people with some regular income assuming a sliding scale for rent. But how would it work for people with no jobs or other sources of income, or insufficient income to sustain managing a home?

    • That’s exactly one of the biggest problems. More and more money being spent on housing and feeding homeless, nothing being spent helping people ever become self reliant, even assuming you’re able to treat everyone’s mental health issues.

  8. Sadly, our city council all failed econ 101. This solution might work, if the supply of homeless was finite. But, it’s not. And the more attractive we make it to be homeless, the more homeless we’ll get. I hate to say it, but ideally we’d just take the current city counsel out back and shoot them all in the back of the heads. Problem one solved. Then we need to make it harder to be homeless, not easier. NYC in the 90s is a good case study. Zero tolerance for theft, vandalism, public drug use, etc. Either you are an asset to society, or you are a parasite. And we all know the proper treatment for parasites.