As the rumble has started again for a tax on large employers in Seattle, Capitol Hill’s State Representative in Olympia has proposed a bill that could take the push for revenue to support housing and homelessness services to a new level.
Rep. Nicole Macri is co-sponsoring a bill that would allow King County “to impose an excise tax on business.”
The state proposal would actually open up the option to any county with a population over 2 million — right now, that would be King County.
“The thing I am interested in is something that will allow for more of a regional approach on addressing homelessness, housing and behavioral health needs than what the current authority allows,” Macri told Crosscut about the proposed legislation.
Fellow 43rd District Rep. Frank Chopp is also a co-sponsor.
The Seattle Times reports that Seattle Mayor Jenny Durkan and King County Executive Dow Constantine support the bill.
Durkan and Constantine said the tax could raise $121 million per year “for housing, homelessness, public safety, and behavioral health services across the region.”
Seattle City Council member Kshama Sawant made a revived “Tax Amazon” movement a key component of her inauguration earlier this month as she begins her third term at City Hall. Sawant’s office says her proposal would would raise between $200 million and $500 million annually by taxing the city’s largest employers.
In 2018, the city council passed and then rolled back a $275 per full-time employee tax on companies reporting $20 million or greater in annual “taxable gross receipts.” That tax would have generated about $50 million annually.
Under the proposed House bill, King County would be allowed to enact a 0.1% to 0.2% tax on the payrolls of large employers. There would be a myriad of qualifications. For one, only companies with employees making more than $150,000 would be taxed and the pay of any employees making less than the $150,000 threshold would be deducted. Under the current bill, grocery businesses would be exempted as would any business with 50 or fewer employees if half of those workers make less than $150,000. And there could be more exemptions to come.
One major criticism of the scrapped Seattle head tax was what critics said was a lack of accountability for how the generated funds could be spent. The new county proposal includes requirements that the tax be used to fund affordable housing and rental assistance programs, homelessness housing, shelter, and service programs, and behavioral health programs.
Newly elected King County Council member Girmay Zahilay whose district includes Capitol Hill called the proposal a potential “game changer.” “Giving King County authority to tax big biz would be a game changer,” he writes. “KC has has long been constitutionally restricted to raising regressive taxes. $121M/year isn’t enough to solve our housing crisis on its own, but is a solid piece to the puzzle.”
A first hearing on the proposed bill could be held as early as next week.
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