A sea of signs filled Seattle City Hall Wednesday displaying slogans like “Tax Amazon,” “Don’t Vote Our Jobs Away,” “Homeless People are our Neighbors,” and “Will the last business leaving Seattle turn out the lights?”
Labor leaders, housing advocates, and members of the business community turned out to speak their minds about a controversial new tax on the city’s highest-grossing businesses that would raise revenue for Seattle’s homelessness crisis. One side showed up to warn the City Council that the tax could discourage job creation. The other urged the city to pass the tax and not back down to pressure from the tech and business community.
“To the folks who say that this is going to be a job killer, we need folks to build that housing, folks with hard hats, folks in this room,” said Jon Grant, a former City Council candidate and housing advocate, at the meeting Wednesday.
The Council’s neighborhoods and finance committee met to discuss a 26-cent tax per employee for each hour worked at companies with at least $20 million or more in revenue. That comes out to approximately $500 per employee annually. The city says the tax would raise about $75 million per year for affordable housing and homeless services.
Last week, Amazon paused construction on a 17-story skyscraper pending the City Council’s vote on the tax. Amazon is also considering sub-leasing its massive Rainier Square office project to another company, rather than occupying it itself, pending the city’s decision. The combined projects would house more than 7,000 new Amazon employees.
Jon Magnusson a structural engineer with the firm working on the Rainier Square redevelopment building, warned about the implications of the head tax during Wednesday’s meeting.
“If you create an environment that businesses perceive as adverse, whether you agree with it or not, they will vote with their feet,” he said. “They shouldn’t think it, but they will. If they think it, that’s what will happen. So the vote today is not really just about new revenue. It’s about the erosion of existing revenues that the city enjoys. Homelessness is a tough problem. I think the answer is not new revenue but better strategies.”
Amazon isn’t the only company putting public pressure on the City Council over the head tax. On Tuesday, more than 130 business leaders signed an open letter urging the city not to pass the tax “because of the message it sends to every business: if you are investing in growth, if you create too many jobs in Seattle, you will be punished.”
Despite fierce disagreement over the tax, both sides agree that Seattle’s homelessness crisis is a dire problem in need of immediate solutions. The Seattle region has the third-largest homeless population in the country, according to Zillow data. The number of people experiencing homelessness has skyrocketed over the past decade as thousands flock to the region for high-paying tech jobs, bidding up the price of housing stock which is in short supply compared to demand.
Opponents of the head tax are frustrated that the problem seems to be getting worse despite the city’s growing budget for homeless services. The city says it “funds housing and services for thousands of people experiencing homelessness each year, but the need is growing faster than we can keep up with.”
King County just finished an audit of its response to homeless services. It found that a lack of coordination between Seattle, surrounding cities, and the county creates inefficiency in the region’s homeless response. Seattle Mayor Jenny Durkan and King County Executive Dow Constantine signed an agreement to take a more coordinated approach to the crisis in response to the audit.
Durkan has not said publicly whether she will support the tax or veto it if it passes. She did, however, say that is “deeply concerned about the impact this decision will have on a large range of jobs,” when Amazon announced its construction pause.