The Seattle City Council Monday afternoon chose a smaller, simpler, “reasonable” compromise to create a new tax on the city’s largest companies to help pay for affordable housing and homelessness services.
In a 8-1 vote, the council — some reluctantly — chose a new version of the plan introduced as Amendment 24 during the afternoon full council session with sponsorship from eight of the nine members — all save Capitol Hill’s District 3 rep, Kshama Sawant.
UPDATE: The council unanimously approved the final ordinance modified by approved Amendment 24 with a 9-0 vote.
“I’ve been really struggling with how I feel about this compromise because I’ve been really, really focused on the spending plan and the dire needs of our communities,” co-sponsor of the original legislation Lisa Herbold said before the vote. But she said she was proud the plan for a new tax had “evolved more towards progressivity” and would do things like protect the city’s small businesses.
Friday, a council committee approved a veto-vulnerable $500/employee version of the tax.
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Monday’s $48 million compromise legislation avoids a collision course with a Mayor Jenny Durkan-threatened veto and will implement a $275 per full-time employee tax on companies reporting $20 million or greater in annual “taxable gross receipts,” eliminated the proposed transition to a payroll tax, and gives the tax plan a five-year window after which it will be evaluated and will require new legislation to continue. UPDATE: “I believe in my bones that our city will continue to be the place that invents the future, and continue to be the most exciting and innovative city anywhere,” Durkan said in a statement issued Monday following the vote. “Seattle can continue to innovate, invent, and grow – and we can continue to come together to build a more affordable, inclusive, and just future for all who call this great city home.” Durkan’s full statement is included at the bottom of this post.
Meanwhile, the smaller tax plan will be accompanied by a smaller housing and homelessness services spending plan including enough money to build an estimated 591 affordable units in five years, and around 15 million per year for services including rental subsidies, shelters, “innovative temporary housing,” and more than a million a year for “city-wide sanitation and garbage services such as but not limited to Seattle Public Utilities’ Clean Cities program” —
The approval Monday brought a victory for Lisa Herbold and Lorena Gonzalez, the legislative architects on the plan, and, maybe, some time to finally rest after a weekend of negotiating. At a meeting with Capitol Hill business representatives last week, the duo said that data and expert reports plus their own experiences seeing the streets of the city convinced them that more needs to be invested in addressing Seattle’s housing and homelessness problems. Herbold also said she expects King County and the state will add to Seattle’s effort with increased regional spending on the crisis. “I don’t feel like we’re doing this in a vacuum,” Herbold said Friday.
The legislation was born out of Seattle’s “Progressive Revenue Task Force.”
“The City of Seattle has an obligation to take care of those people who are suffering on our city’s streets,” Gonzalez said prior to Monday’s vote.
According to King County, there are more than 14,000 people living unsheltered here.
The compromise approval — even without a ban on so-called “sweeps” and far from the originally proposed $500 per employee mark, let alone Sawant’s bid for $1,000 — also yielded a major victory to the Socialist Alternative leader and activists calling for large companies to do more to address social issues in the cities in which they do business. “This will be a historic victory,” Sawant told CHS Saturday before she led about 200 protesters in a “March on Amazon.” “This will be seen by every city where Amazon is building towers. But also every city in the United States. Because every city is facing a housing and homelessness crisis.” Now, in five years, the fight in Seattle will begin again.
In the meantime, Amazon, Starbucks, and the other approximately 3% of Seattle businesses that will be dinged in the process have some time to start saving up. The new tax will take effect in 2019.
UPDATE 9:00 PM: Mayor Jenny Durkan issued this lengthy update following the vote:
“Seattle’s unprecedented growth has come with significant challenges. From the beginning of this important debate, my priority was to find the right balance of meaningful progress on our affordability and homelessness crisis while protecting good, family-wage jobs. I heard from thousands of constituents, hundreds of businesses of all sizes, dozens of unions, and advocates, and we all shared the same goals: maintain a strong economy, help the thousands of people experiencing homelessness, and make Seattle affordable for residents, artists, and businesses of all sizes.
“Over these past few weeks, we saw what happens when we come together, sit down together, and work together – we can find common ground and get things done. And have no doubt – it was not easy. This was a tough debate in our City. There are a lot of strong passions and genuine policy differences between friends, neighbors, businesses, unions, and Councilmembers. But we have to find ways to come together to take action on our toughest problems.
“I am grateful for all the Seattle residents who took the time to make their voices heard on this important issue because they care so much about the future of this City we all love.
“This legislation will help us address our homelessness crisis without jeopardizing critical jobs. Because this ordinance represents a true shared solution, and because it lifts up those who have been left behind while also ensuring accountability and transparency, I plan to sign this legislation into law.
“Looking ahead, I will be taking urgent action to move people off our streets and into safer places and to clean up garbage, needles and waste from our parks and communities. At the same time, I want to create more accountability and transparency with taxpayer dollars. We will also continue to work towards a regional solution to homelessness because Seattle cannot go it alone.
“I believe in my bones that our City will continue to be the place that invents the future, and continue to be the most exciting and innovative city anywhere. Seattle can continue to innovate, invent, and grow – and we can continue to come together to build a more affordable, inclusive, and just future for all who call this great City home.”
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