Seattle City Councilmember Kshama Sawant thinks that if Amazon plans to build a $5 billion second corporate headquarters, it can afford to pay more taxes in its hometown.
She said as much during deliberations over the 2018 Seattle budget on Tuesday.
Sawant and her colleagues were discussing the Housing, Outreach, and Mass-Entry Shelter (HOMES) proposal, which would levy a tax of $100 per full-time employee, per year on businesses making more than $5 million in annual revenue. The tax’s sponsors say it would generate between $20-25 million a year to pay for affordable housing and homeless services.
“I think it should be larger,” Sawant said during Tuesday’s meeting. She later added, “at $200 we could raise over $50 million per year, every year.”
Sawant highlighted Amazon, which has become emblematic of Seattle’s boom and wealth inequality issues.
“Amazon would be paying about $8 million a year,” Sawant said. “That is less than six parts in a thousand of one percent of their 2016 revenue. I mean, these fractions are so small, it doesn’t even make sense. You can’t process these small fractions. It’s 1/625th — I’m not making this up — it is 1/625th of the money they announced they intend to use to build a new campus.”
Sawant arrived at the number assuming that Amazon would pay $200 for each of the 40,000 or so employees that work in Seattle. Amazon has pledged to invest up to $5 billion for HQ2, a second headquarters somewhere in North America that will house some 50,000 employees. It is important to note that the tax, as it is proposed now, would be $100 per full-time employee or 5 cents per hour, not the $200 per year Sawant is calling for.
The HOMES proposal is sponsored by Councilmembers Kirsten Harris-Talley, Mike O’Brien, and Lisa Herbold. If it passes, the city’s highest grossing businesses would be assessed beginning in 2019. Herbold has suggested borrowing against the projected revenue for 2018 to more immediately address homelessness, which has been classified as a state of emergency in Seattle.
O’Brien says that three-quarters of the funds raised through the employee hours tax would go toward affordable housing projects and one quarter toward emergency homelessness services. He says that there are “dozens and dozens” of affordable housing projects that developers are ready to break ground on now but only about half of them could be funded without the new tax.
“These are projects that have land available and other funding streams in place and just need the city funding to make them a reality,” he said during Tuesday’s meeting.
The Seattle Metropolitan Chamber of Commerce is pushing back against the HOMES proposal, asking its members to write letters to the City Council to demand more transparency around existing homelessness programs. Seattle Chamber CEO Maud Daudon says she is not convinced that existing funding, like the Seattle Housing Levy, is going toward an approach that prioritizes permanent housing first.
“There has been no real dialogue here to gain understanding about what actually is being proposed,” Daudon told GeekWire in an interview. “There’s a lot of confusion but what we’ve heard, we have not been reassured that the investments are consistent with this new path.”
In a discussion with Daudon on The Seattle Channel this week, O’Brien said that the Council can’t afford to delay on the homelessness crisis any longer.
“I don’t have a lot of great options,” he said. “If we want to sit around the table and talk about things we could change in Olympia or different ideas, I’m all for that, but I’m two years into a state of emergency and I’ve got to do something this budget cycle.”
O’Brien also mentioned Amazon during that conversation saying, “a tax on these large businesses, yeah they’ll pass it along to their customers but if you’re a big restaurant, your customers are Amazon workers. They’re not homeless people.”
Amazon always seems to occupy an empty seat at the table when Seattle civic leaders are discussing the city’s growth challenges. The company has become a symbol for the booming tech industry that is leaving behind some of the city’s low-income population. The e-commerce giant has become even more of a lightning rod since its September announcement of plans to establish a second corporate headquarters in another city.
Councilmembers are still deliberating over details of the HOMES tax, including whether the $5 million revenue threshold should be higher. The final version is headed for a vote on Nov. 20.