With reporting by Seattle City Council Insight

There will be no May vote on a new business tax championed by District 3 City Council rep Kshama Sawant and the legislation will be put on ice over concerns about public meetings during the COVID-19 crisis.

According to a memo issued Thursday, council President Lorena Gonzalez has decided that the payroll tax bill put forward by council members Sawant and Tammy Morales does not meet the criteria for allowed actions under Gov. Jay Inslee’s proclamation modifying the terms of the Open Public Meetings Act and Public Records Act.

As such, the council may not continue deliberations on it while the Governor’s proclamation remains in effect, and next Wednesday’s Budget Committee meeting to discuss the bill has been cancelled.

Sawant is lashing out at her council colleagues on Twitter. “This move by the Democratic establishment to cancel Tax Amazon committees through May is nothing but a naked attempt to break the momentum of our movement, which they and their wealthy benefactors are clearly nervous about,” she writes. “Which only means we’ve got (to) escalate our movement!”

The proposed tax, spearheaded by council members Sawant and Morales, would, in the long run, tax the largest 2% of businesses to fund the construction of up to 10,000 units of social housing and the conversion of homes to environmental standards in line with the Green New Deal starting next year.

But Sawant and Morales had pushed the plan forward in response to the outbreak to also create a $500 a month Seattle COVID-19 relief payment program for up to 100,000 households beginning later this year. The program would prioritize assistance to “seniors; those that are undocumented, immigrants, and refugees; individuals experiencing homelessness; working people who have lost incomes and become destitute as a result of the pandemic; and, others who experience structural or institutional barriers to accessing support from the government.”

The spending plan includes starting the relief effort by borrowing $200 million from other city programs.

Mayor Jenny Durkan and city business advocates have opposed the plan. Thursday’s news brought continued criticism.

“A tax on jobs was bad public policy in 2018, it is bad public policy today, and it will continue to be bad public policy in the future,” a statement sent to CHS by the Downtown Seattle Association reads. “Councilmember Sawant has been looking for an excuse to revisit her jobs tax for two years, but now there seems to be a consensus amongst most city leaders that this is not the time to engage in this debate. Economic recovery is critical and we all need to be at the table working together to get our city and businesses through the other side of this downturn.”

Gonzalez’s memo notes that with regard to the two meetings that have already occurred on the bills, she and the City Attorney’s Office are still in the process of setting up an enhanced review process for pending legislation to determine if it meets the criteria in the Governor’s proclamation. But further urging from council member Lisa Herbold representing West Seattle, pushed Gonzalez to conclude that the tax bill would need to be set aside:

As I have learned more about this legislative proposal and had additional communications with the CAO, I have become increasingly concerned that the substance of this proposal and the facts established in its legislative findings do not meet the high standard necessary to support a conclusion that the package as a whole is either routine and necessary or sufficiently related to COVID-19 and the current public health crisis, as required by Proclamation 20-28. Firstly, there appears to be wide agreement that this legislative package is not routine or necessary. Secondly, it appears that the prime sponsors may believe that this legislative package is related to COVID-19 and the current public health crises. However, the taxation and spending plan legislation contains several components that likely would not be justified as COVID-19-related legislation pertaining to the current public health emergency. For example, the Green New Deal housing strategies (section 2.D); Job training investments for transitioning workers (section 4); creation of the Social Housing Board (section 3.14.750); and creation of the Green New Deal Housing Board (section 3.14.979) all bear little to no relationship to the current emergency. Moreover, the corporate payroll tax legislation is not proposed to be collected in 2020 and is intended to exist in perpetuity and, thus, long-after the current public health crises presumably ends. On these points, I would strongly urge each of you to carefully read the CAO memorandum dated April 28, 2020, that Councilmember Herbold shared with us.

“I believe that any further Council action, which includes briefings and discussions at any regular, special or select committees, related to this legislative package as introduced puts the Council at significant risk of litigation related to a potential violation of the OPMA as a result of Governor Inslee’s Proclamation 20-28,” she writes.

Council member Herbold’s memo suggested two alternative approaches: first, the bills could be narrowed down to just the COVID-19 response portions; second, consideration of the bills could be postponed until after the Governor’s proclamation expires.

Gonzalez notes that she has no power to direct Sawant and Morales to rewrite their legislation, so she argues for postponement.

“I understand how important these bills are to the prime sponsors, our shared constituencies and to our collective effort to identify new revenue sources that will prepare us for the ongoing response to this public health crisis and, ultimately, recovery from this once in a lifetime economic crisis,” she writes. “However, as public officials, we are required to comply with the OPMA. Allowing discussion of these bills to continue without regard to the requirements of Proclamation 20-28 would require us to recklessly and knowingly abandon our commitment to open government and a fair and equitable democratic process for both proponents and opponents of the Sawant-Morales Bills and any other alternative revenue proposals.”

Herbold’s memo, dated April 27, detailed her concerns that the payroll tax bills could not be considered under the Governor’s proclamation, and explained that for those reasons she declined to participate in the first two Budget Committee meetings on the bills. She goes on to express her view that the best path forward would be for the Council to place a tax package (though not necessarily the Sawant/Morales one) on the ballot in the fall for voters to approve.

Sawant and the Tax Amazon group pushing for the new tax are pushing for enough signatures to get the proposal on the ballot even if the council does not act. This week, the group was joined by the National Lawyers Guild in a call for Seattle and Washington officials to act to allow the initiative signature gathering process to move online during the COVID-19 crisis.

Organizers must procure “ten percent (10%) of the total votes cast for mayor at the last Mayoral election” to put the measure on the ballot for a November vote

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