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Businesses getting their turn to help shape Seattle’s head tax

With reporting by SCC Insight

Tuesday afternoon, Poquitos co-owner Rich Fox was slated to be part of the Seattle City Council’s attempt to get more business voices at the table as it moves toward a planned May vote on a new employee-hours tax to help fund homelessness services and affordability efforts.

Tuesday’s “business roundtable” organized by Sally Bagshaw was part of an attempt to make up for the relatively meager participation by businesses in the Seattle Progressive Revenue Task Force organized by Council members Lorena Gonzalez and Lisa Herbold.

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Sixteen people took turns sharing their thoughts across five groups loosely grouped by industry sectors: retail, technology, hospitality, life sciences, nonprofits, manufacturing, development, and industrial. The big takeaways from the day? The ordinance is likely moving forward as a payroll tax — typically imposed a percentage of salary — and It will likely exempt small businesses up to some threshold of revenues, not profits.

Some at the roundtable used their time to remind the council that many businesses are run on thin margins. Destiny Sund, owner of The Confectional in Pike Place Market and a former Capitol Hill business owner, said that her entire profit in 2017 was $3,000, and so far this year she has lost $20,000. “I feel like Seattle doesn’t care if my business survives,” she said.

Fox and Poquitos were also part of the roster of around 300 small businesses who spoke out against some aspects of the so-called “head tax” proposals and what they said was a lack of representation in the process. A list of participants in Tuesday’s roundtable is here.

The Progressive Revenue Task Force finalized its set of recommendations in March for a tax that could raise $75 million a year to help create housing and provide homelessness services. The final recommendations pushed the amount the city should raise to an estimated $150 million — $75 million of which would come from a per-employee tax. A Seattle Housing Gap meeting in February was centered around how best to put the revenue from the tax to use. A concept for a flat “skin in the game” fee of $395 that was especially onerous to small business owners has already been pushed aside.

Moving toward a possible May vote, Gonzalez and Herbold are writing the legislation that will be debated and amended in Bagshaw’s Finance and Neighborhoods committee. When it is completed, the ordinance is planned to be accompanied by a resolution laying out priorities for how to spend the revenues generated.

But before that happens, there are more opportunities for public comment. Next week, Bagshaw will hold a Monday night hearing on the proposed tax. You can learn more about the task force recommendations here.

UPDATE 10:50 AM: A letter sent to City Council Tuesday from Jenny Durkan shows that the executive wing at City Hall is ready to back business interests when it comes to the proposals and that the mayor is looking for a plan that dovetails more closely with her efforts to invest more money in regional solutions to homelessness and housing and spend less on emergency services.

“… As I have reiterated since last year,” Durkan writes, “Seattle must protect our small businesses when considering any new business taxes or regulations.”

“In addition, I believe it is imperative that any proposal has full accountability and transparency for our taxpayers from the initial spend proposal to oversight as the funds are delivered.”

The full letter is below:

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8 thoughts on “Businesses getting their turn to help shape Seattle’s head tax” -- All CHS Comments are held for moderation before publishing

  1. I think that it’s important to support the business community in Seattle, not make it harder to do business here. My sense is that, like the schools, addressing the homeless situation is an unfillable leaky cup, meaning that no matter how much money is poured in, the problems remain. So at what point do we stop pouring?

  2. I agree Lee. The City Council’s approach is not “are we making the best use of the money we have now.” It’s immediately “we need $150,000,000 more to address the issue. Now let’s decide how to raise it.” Silly and irresponsible. Two studies funded by the city concluded that we are already spending enough, just not in the right places. It’s great that they are finally talking to some business owners, but they aren’t asking the tougher questions about why the $63 million dollars we’re spending now isn’t helping. I guess we can only blame ourselves for electing these people

  3. It’s time Herbold, Gonzalez, Sawant and O’Brien get voted out. Past time. $150,000,000 with no specific plan, punishing local business. We like our restaurants, bars, bookstores, cafe’s, etc. Far more than we like our politicians at this point.

  4. Obviously there is no easy answer to the issue of homelessness or it would have been solved by now, but I think its time try something new.

    Wouldn’t prioritizing the HUGE amount of our money we already spend on “homelessness” be better spent on substance abuse recovery, mental health care, education and job training? How about some work requirements for able body individuals in exchange for free / low cost housing?

    I agree giving someone a roof over there head when life gets tough is very important and necessary but there has to be some incentive to better oneself. Just giving someone a cheap or free apartment isn’t going to solve the problem.

    Maybe a little more “stick” and a bit less “carrot” ?

    • Yeah, there’s no easy answer…except for the fact that other first world countries seem to have it figured out.

      Turns out, if you want to solve the homeless problem…you need to give them housing (novel concept, I know). Yes, there’s the additional steps like addiction treatment, mental health care and job training, but those can come with the housing, which is crucial to making this work. Currently, the options are dry shelters, with no drug or mental treatment or free/affordable treatment, but no shelter.

      Unfortunately, there’s a lot of opposition to the solution that actually works, so the City spins its wheels, because no councilmember wants to risk votes to actually push something through. And this can’t happen at the local level only, changes need to also happen at the national level. Unfortunately, we seem to only be concerned with cutting taxes for the wealthy and increasing defense spending, so here we are!

      And do take note that the “stick” never works. What do you do, arrest the homeless and throw them in jail? That starts to get way more expensive than just housing them.

  5. The Council blames economic prosperity for the cities woes. Really? They are just bad at their jobs. How many pieces of new legislation have been stopped in court?

  6. It’s time that Seattle fall back on its History and form another level of CHECC…

    A broad-based citizen-activist movement spearheaded the numerous political and social changes that took place in Seattle during the 1960s and 1970s. Although many organizations participated, this account (updated in February 2009) focuses on the role played by one of them — Choose an Effective City Council (CHECC). It was written by CHECC participant Peter LeSourd. The following links are Part’s 1 & 2.

    CHECC: Its role in the transformation of Seattle, 1967-1978, Part 1

    CHECC: Its role in the transformation of Seattle, 1967-1978, Part 2