Calling the spending plan irresponsible and saying it will drain the city’s emergency funds too quickly, Seattle Mayor Jenny Durkan has vetoed the City Council’s big business tax spending plan including millions in immediate COVID-19 economic relief.
The council’s unanimous support for the plan including rental and food assistance, and boosts for small businesses likely means it can overcome the veto and tap the some $86 million in funds it had lined up from Seattle’s emergency reserves.
Mayor Durkan says the city might need that cash next year and beyond.
“We are in the middle of an unprecedented public health and economic emergency. It is irresponsible to spend the entirety of our rainy day and emergency funds in the first few months of what is likely a multi-year crisis,” Durkan said in her weekend statement about her decision to veto the legislation. “If 2020 is any indication, no one can responsibly project that Seattle will not have additional emergencies this year and next. Already this year, in addition to the health and economic crisis, we have seen a significant unplanned infrastructure emergency with the closure of the West Seattle Bridge.”
Earlier in the year, Durkan supported a plan to spend around $29 million of the city’s emergency reserves to fill an expected budget gap due to the COVID-19 economic fallout.
City council budget chair Teresa Mosqueda pushed back against the mayor’s call for a slower drawdown on the reserves.
“Rent is due today. Federal cash assistance ends today. And today the Mayor vetoes COVID relief for small businesses and families. In the midst of an economic contraction that is four times worse than the Great Depression, we can’t afford to take a wait and see approach when Seattle families’ health, jobs and housing is on the line,” Mosqueda said in a statement after the mayor’s veto announcement. “If we wait, what we’ll see is more folks unable to pay rent, more families without food, more businesses closing and people losing their jobs – and along with it their healthcare during a global pandemic. This creates a cliff and a more costly and longer road to economic recovery – it will be harder and more costly for people to keep their businesses, housing and childcare without this COVID relief.”
Under the COVID-19 relief bill, the council says it plans to replenish the emergency reserves in 2021 with $86 million from the new tax on big businesses.
CHS reported here on the approval last month of the new business tax. Beginning January 1st, Seattle companies with payrolls $7 million and up will be taxed on pay to employees making more than $150,000 per year. The tax rate ranges from 0.7% to 2.4% with tiers for various payroll and salary amounts. It is expected to generate more than $200 million a year for for a city facing a massive COVID-19 crisis-ripped hole in its budget forecasts and in desperate need of revenue for hoped expansion of housing, business assistance, and community spending. Late amendments approved include an expanded 20-year sunset clause that puts the tax in place for two decades. Grocery businesses and independent contractors are exempt.
Mosqueda said she now intends to bring the COVID relief bill for another vote to council in the coming weeks.
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Wait, so is the council writing a new bill or are they just bringing the old bill for another vote. The title says new but the post makes it seem like it’s just another vote on the old. Maybe I’m not reading this correctly?