Mayor Durkan Seeks to Halve the Head Tax, Add Sunset Clause

Mayor Jenny Durkan is trying to block the Seattle City Council’s Left wing from passing a head tax worth $75 million per year and focused on permanent affordable housing and replace it with one worth $40 million and focused on temporary homelessness services and sanitation. Negotiated with Councilmember Sally Bagshaw, the mayor’s “compromise” bill also includes a five-year sunset clause.

Mayor Durkan claims to have the support of four councilmembers–Bruce Harrell, Debora Juarez, Rob Johnson, and Bagshaw–for the shrunk head tax, while the five other councilmembers are standing behind the larger proposal. This could set up a showdown since it takes six councilmember votes to override Mayor Durkan’s veto, should she use it. The last minute maneuvering suggests Mayor Durkan may be prepared to veto. It also possible that one or more of the councilmembers will flip sides. The council is debating the competing head tax measure in finance committee this morning, which you can watch live on Seattle Channel starting at 9:30am. That’s why we encourage you to contact your councilmembers or attend Monday’s full council meeting at 2pm.

Lisa Herbold, District 1
206-684-8803 lisa.herbold@seattle.gov
Bruce Harrell, District 2
206-684-8804 bruce.harrell@seattle.gov
Kshama Sawant, District 3
206-684-8016 kshama.sawant@seattle.gov
Rob Johnson, District 4
206-684-8808 rob.johnson@seattle.gov
Debra Juarez, District 5
206-684-8805 debra.juarez@seattle.gov
Sally Bagshaw, District 7
206-684-8801 sally.bagshaw@seattle.gov
Mike O’Brien, District 6
206-884-8800 mike.obrien@seattle.gov
Teresa Mosqueda, Position 8
206-684-8806 teresa.mosqueda@seattle.gov
Lorena Gonzalez, Position 9
206-684-8802 lorena.gonzalez@seattle.gov

The original proposal called for a tax of $500 per employee at for-profit employers grossing $20 million or more in revenue–compared to Mayor Durkan’s $250 per employee. It’d also convert to a 0.7% payroll tax in 2021, allowing the City time to set up the infrastructure to implement a payroll tax. Employers (particularly the one with lower-wage workers) see the payroll tax as more equitable since it falls harder on companies with higher wages.

Councilmember Lisa Herbold said she will introduce an amendment that cancels the payroll tax conversion and reduces the head tax starting in 2024 to the minimum needed to pay off the bonds, effectively introducing a sunset or tapering clause to the larger head tax.

Last week Mayor Durkan told The Seattle Times that finding efficiencies wouldn’t net enough money to solve the homelessness crisis. Yesterday, she said we couldn’t tax our way out of the crisis. If neither efficiencies nor taxing can solve homelessness what can? What is the Chamber of Commerce plan to solve our housing crisis if an employee hours tax, a payroll tax, and income tax–which Amazon CEO Jeff Bezos also opposes–are off the table?

The recent McKinsey homelessness study contradicted the position held by Mayor Durkan and the Seattle Metropolitan Chamber of Commerce that big investments are unnecessary. The study showed that the region needs to invest $400 million per year to create the 14,000 homes the firm estimates we’d need to deal with the homelessness crisis. Meanwhile, some housing advocates, like former mayoral candidate Nikkita Oliver, have argued the mayor’s move shifts yet more resources to homeless sweeps.