Seattle City Council votes 9-0 for scaled-down head tax

The legislation calls for a tax of $275 per employee, per year on for-profit companies that gross at least $20 million per year in the city — down from a $500-per-head tax that Mayor Jenny Durkan had threatened to veto.

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.

The tax starting in 2019 will be $275 per employee, per year on for-profit companies that gross at least $20 million per year in the city — down from a $500-per-head tax that Durkan threatened to veto.

Council members were working on the deal past midnight Sunday, they said. About 3 percent of Seattle businesses will be affected and the tax will raise about $47 million per year, according to the council.

“We have community members who are dying,” Councilmember Teresa Mosqueda before the 9-0 vote. “They are dying on our streets today because there is not enough shelter” and affordable housing.

The ordinance passed Monday calls for the tax to sunset after five years, with renewal requiring a council vote in 2023.

With more than 45,000 employees in the city, Amazon could pay more than $10 million alone. Other companies set to be taxed include Starbucks and longtime, family-owned supermarket Uwajimaya.

The tax approved Monday is much smaller than the $500-per-head proposal that had been under consideration for many weeks.

Councilmember Kshama Sawant cast the only “no” vote Monday on an amendment that reduced the size of the tax.

“There is no way this tax will be a burden on big businesses in Seattle,” Sawant said, slamming the mayor for siding with “Amazon billionaires.”

Homeless-services workers and unions representing supermarket and hotel workers, among others, supported the larger tax, which was proposed by Councilmembers Mosqueda, M. Lorena González, Lisa Herbold and Mike O’Brien.

“We could not find the votes we needed,” a disappointed O’Brien said before voting for the smaller proposal.

González said she had hoped to be voting “on a different package” with more money, but “I’m glad to be able to finally move this forward.

Durkan, many businesses such as Amazon and construction-worker unions opposed it, as did Council President Bruce Harrell, Councilmembers Sally Bagshaw, Debora Juarez and Rob Johnson and some voters critical of how City Hall has been spending money.

Johnson called the $275-per-head tax a “reasonable compromise that will allow us to make real progress.”

Seattle has been in a civil state of emergency over homelessness since late 2015. A point-in-time count last year tallied more than 11,600 homeless people in King County.

Proponents of the head tax say companies such as Amazon have contributed to homelessness because their highly-paid employees have driven up rents and home prices.

Along with the tax Monday, the council approved a non-binding resolution that calls for spending 66 percent of the new money on affordable housing, 32 percent on emergency shelter, trash pickup, raises for service workers and other needs and 2 percent on administration.