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Head Tax, No Head Tax

Four weeks ago the Seattle City Council unanimously passed a head tax of $275 per employee on businesses that generate more than $20 million in annual revenues. Roughly 60% of the revenue raised (an estimated $47 million per year) was earmarked go to building affordable housing. The remaining 40% was for emergency services for the homeless.

This was a compromise with the mayor, who threatened to veto the original proposal of a $540 per employee tax.

Many of the big companies in the city (Amazon, Starbucks, and others) were vehemently opposed to the tax. Of course. They participated in funding an initiative campaign to repeal the tax.

And today, the City Council voted 7-2 to repeal the tax.

My take: it makes no difference what you thought about the head tax. We just got a great civics lesson on how not to run government. I'm embarrassed that they passed the tax *and* I'm embarrassed that they repealed it. Both actions were taken rashly and without the appropriate analysis that government is supposed to do. I'm an opponent of the initiative process, but if the city council and the mayor can't do their jobs and study the issues thoroughly before passing laws, we might as well get rid of them and just govern by ballot initiative.

We do need a solution to the homelessness problem in this city. And it's a shame that this tax was repealed without an alternative plan in place. But the fact that everyone is talking about an alternative plan means that they could have been working on one in the first place instead of passing a tax knowing full well that the business community would fight it, only to repeal it four weeks later.

And in any case, the $47 million, and even the $75 million the original proposal was supposed to raise, would only be a drop in the bucket toward creating the affordable housing the city needs. As was reported in The Stranger today,
…22,000 households experiencing homelessness currently need affordable housing units, but there are only 8,000 units available at a given time. That leaves a gap of 14,000 units. In total, the firm's report estimated that the county needs $200 million more per year to address the crisis. 

The head tax would have raised $45 million in new revenue in its first year. Exactly how the money would be spent would have been decided during budget negotiations this fall. However, a spending plan adopted by the council would have dedicated 66 percent of the revenue to building affordable housing. The result: Over five years, the head tax would pay for 591 of the 14,000 units that the region needs.

It's time for city leaders to work in partnership with local businesses to come up with an innovative solution to this problem.

No, the time to do that was before the tax was passed in the first place.

photo from MyNorthwest by Hanna Scott, KIRO radio

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