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Seattle City Council rejects controversial 'head tax' that would fund homeless services

A controversial head tax on Seattle’s largest businesses failed in a 5-4 vote by the Seattle City Council on Tuesday. The tax would have raised $25 million toward homeless projects and temporary housing. (Photo: KOMO News)

SEATTLE - A controversial head tax on Seattle’s largest businesses failed in a vote by the Seattle City Council on Tuesday.

In a 5-4 split, the Employee Hourly Tax also known as the HOMES tax was rejected, but a door was opened to bring back the proposed tax soon.

The tax would have raised $25 million toward homeless projects and temporary housing.

In the last several days, the tax was altered in the hopes to appease those who objected to it.

It was raised from $100 to $125 per full time employee on businesses making $10 million in gross revenue.

The tax pencils out to about 6.5 cents per hour. A city staff report said the tax would only effect five percent of businesses.

Councilmember Kshama Sawant criticized her fellow councilmembers for waffling on supporting the idea of a head tax, but voting 'no' when it came to an actual vote. She was asking for $275 per employee tax.

“If you really support the needs of homeless people and those who are reeling under skyrocketing rents, which is the vast majority of the middle class as well, then you have to support this,” Sawant told the council Tuesday.

Councilmember Rob Johnson voted against the tax and reflected the thoughts of other objectors saying how the money would be spent wasn’t entirely clear.

“It felt like we really needed to have a very deliberate discussion amongst all nine of us about the nexus of that revenue and how we will spend” says Johnson.

After the tax was rejected, a second proposal from Council President Bruce Harrell to borrow $8.8 million from the city’s "Rainy Day Fund"to jump start new homeless programs next year also failed by a 5-4 vote, with supporters of the tax voting against it.

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