Seattle tax showdown with Amazon coming to a head

Mayor Jenny Durkan attends the Washington Women in Trades job fair at Seattle Center on Friday

Following a weekend of negotiations between Seattle City Council members and Mayor Jenny Durkan, the council voted unanimously Monday to adopt a new tax on the city's largest employers to help address homelessness.

"How is that a compromise?" Tech giant Amazon said it would pause construction on a 17-story skyscraper pending the city council's vote, which prompted construction workers to rally against the head tax. The tax is expected to raise roughly $50 million per year toward outreach efforts for the homeless, including affordable housing and emergency shelter.

It would only impact businesses with over $20 million a year in gross revenue. MyNorthwest reached out to surrounding counties to gauge their interest and perspectives on a head tax.

Durkan on Friday said she didn't support the original proposal because it would cost jobs.

"We need to do something about this homelessness crisis", said Justin Bare, who favors the tax. But the company is "very apprehensive" about its future in its hometown because of "hostile approach and rhetoric toward larger businesses". We would veto it if the Council sent us one and we will actively assist businesses that are looking to relocate to Pierce County because of the high tax burden in Seattle.

"Taxing jobs will not fix our region's housing and homelessness problems", said Strickland, who went on to praise Durkan for her role in the compromise. "We are highly uncertain whether the city council's anti-business positions or its spending inefficiency will change for the better".


Businesses and others say the so-called head tax is misguided and potentially harmful. However, it still does not support the compromise.

Mayor Jenny Durkan said that Seattle now spends about $70 million in annual direct investments to programs that fight homelessness in her first State of the City address.

At an impassioned meeting Monday afternoon, the Council approved an amendment establishing the tax of $275 per employee per year, from $500 previously, on companies with more than $20 million in annual revenue in the city. The unanimous vote for the ordinance protects it from a mayoral veto.

"When I looked at this new revenue tax stream, I think we have to convince the public that we are using it wisely and strategically, and I think we've failed in that regard as a city", he said. Some construction workers opposed the tax out of concern for their jobs while supporters pressed the council to do something about the rapidly expanding number of homeless families in the city. Another called a member of the City Council a communist (she's actually a socialist) and said she "seems to be getting paid by the residents of Seattle to throw temper tantrums".

The tax, which passed unanimously, is almost half the size that four city council members originally proposed in April. "This will be seen by every city where Amazon is building towers". The remainder would go to homeless services, including shelter beds, camps and overnight parking. About $2 million would fund rental subsidies for people making between 0 to 30 percent of the area median income.

As a result of the new request for proposals process implemented last year, the contracts last a year, but the city says it assesses the service providers quarterly to determine whether the providers are meeting performance targets.

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