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Controversial $500 head tax moves forward; mayor may veto

Citizens pack a May 11 City Council meeting on the controversial head tax. (KOMO News photo)

SEATTLE - The Seattle City Council voted 5-4 Friday to approve a controversial $500-per-employee 'head tax' on the city's largest businesses.

Mayor Jenny Durkan said Friday afternoon that she cannot support the proposal.

The council voted on the proposal as a committee, which means another vote must be taken Monday before the head tax receives final council approval.


An alternative plan that would have reduced the controversial head tax proposal failed to pass the committee vote. The alternative plan, backed by Durkan and City Council President Bruce Harrell, would have lowered the tax on businesses to $250 per employee from the original proposal of $500 per head.

But that plan, which would have raised an estimated $40 million per year, failed to get enough backers in a Friday morning vote. Opponents of the alternative plan said the reduced tax would not raise enough money to address the homeless emergency facing the city or reduce the suffering of those living on the streets.

Durkan could still veto the $500 head tax, if it passes the full council by a 5-4 vote.

Durkan released a statement Friday afternoon that she wants to support a proposal that will allow the creation of "good family wage jobs."

"Unfortunately, the bill that pass out of committee hurts workers by stopping these good jobs, so I cannot support it," she said. "I will continue to work with council and remain hopeful that council will pass a bill that I can sign."

The Downtown Seattle Association called the tax " bad economic policy" that will " negatively impact Seattle’s economy and city tax revenues."

The current head tax proposal OK'd by the council would require large corporations operating in Seattle to pay $500 per employee each year to finance homeless programs. The measure would raise an estimated $75 million.

About $20 million of the total would come from Amazon, the city's largest employer, which opposes the tax and has halted construction on a 17-story office tower as it awaits a tax vote. The company is also rethinking filling office space in another leased building. On Tuesday, Alaska Airlines, Expedia and others also came out against the $500-per-head tax.

The alternative measure voted down by the City Council was believed to be more acceptable to large employers.

Monty Anderson, the head of 20,000 union carpenters, said he was assured by Amazon that construction would resume where its stopped if the compromise plan was accepted - but the compromise is now a no-go.

Harrell lamented that "only in Seattle is $250 per head is considered conservative."

An amendment was later introduced to charge large corporations $350 per employee each year, but that measure also failed.

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