Head Tax Faces Narrow Path to Victory in City Council

Council Members Mike O'Brien and Kshama Sawant are two of the four council members who support a new tax on businesses to fund homelessness services. City of Seattle

As the Seattle City Council continues to debate a new tax on large businesses, many council members are saying little about their opposition to the tax and a key swing vote has remained mum.

The council today discussed its latest iteration of the 2018 budget, including a proposal to tax companies that gross more than $5 million and use the new revenue to fund housing and homelessness services. The so-called head tax would charge qualifying businesses $100 per year per full time employee. Supporters highlight that it would affect only 10 percent of businesses in Seattle; opponents worry it could affect smaller businesses with high revenue but slim profit margins. The Chamber of Commerce opposes the tax. Advocates with the Housing for All coalition support it.

The tax's path to success is steep. Only four of nine city council members have come out in support of the proposal: Mike O'Brien, Kshama Sawant, Lisa Herbold, and Kirsten Harris-Talley. Four others have said they are opposed. Last week, Council Members Sally Bagshaw, Debora Juarez, and Rob Johnson said during a committee meeting they would rather find money for homelessness elsewhere in the budget. Later, Council Member Lorena González said during a candidate forum that she also does not support the current proposal. Interim mayor Tim Burgess, who has the power to veto the budget, says he opposes the tax.

That's 4-4 on the council. Council President Bruce Harrell is the only member who has not made his position clear during meetings or in response to a request for comment from The Stranger. Harrell has a reputation as a wildcard who often waits until the last second to reveal how he plans to vote on an issue, but has been supported by the Chamber of Commerce while running for office.

Bagshaw was the only council member opposing the tax to speak during today's meeting. (Sawant encouraged other members who oppose the tax to speak publicly, but none did.)

“I believe we need more money," Bagshaw told O'Brien during a testy exchange, "but I don’t think that we should add more money without including everybody at the table who’s going to have to pay it.”

Bagshaw said the tax “strikes me as politically joyful for a few but counterproductive in the long run." She called for more discussion and planning for a different (but unspecified) measure to find more money for homelessness. Business groups and city officials met last year to discuss a ballot measure for homelessness funded by property taxes but did not put it on this year's ballot.

“Council Member Bagshaw," Sawant responded, "are you really suggesting Amazon is not at the table? Amazon has the table. We are on the outside." Sawant called the tax a "modicum of justice."

“This is not about punishing anybody," Herbold said. "It's about a recognition that many of our social ills are the result of our economic expansion and growth and prosperity."

Harris-Talley called the tax "an extraordinarily small amount to ask" from businesses grossing more than $5 million a year. "We’re reorienting some of the disproportionate inequities that come in capitalism," Harris-Talley said. "There’s a bigger context of who pays more or less and who are the folks who can [pay more]."

Burgess unveiled his 2018 budget proposal in September. The council has since been discussing potential changes to it. Herbold, as budget chair, today revealed her proposed "balancing package," which includes some but not all proposed additions and changes. (Stay tuned for more coverage about what did and didn't make it in.)

The tax would raise about $24 million a year for housing and homelessness services as well as an expansion of the Law Enforcement Assisted Diversion program. Herbold's balancing package lists some specific programs that would receive money from the tax, including emergency shelter, permanent supportive housing, transitional housing for homeless foster youth, a center for homeless youth, services for domestic violence and sexual assault survivors, a safe consumption site, and other programs.

Herbold said the need to address housing and homelessness was “the defining factor” in crafting the balancing package. “It strives to address the most immediate needs in our city,” she said.

Council members have until Thursday to propose changes to the balancing package. The council will discuss those changes next week and begin voting on the budget in committee the following week. Tomorrow at 5:30 pm, the council will host a public hearing on the budget at city hall. Afterward, activists plan to camp out at city hall to advocate for the tax and mark the two-year anniversary of the declaration of the homelessness state of emergency.