Seattle mayor proposes smaller head tax alternative

Citizens pack a Seattle City Council meeting on the proposed head tax (KOMO photo)

SEATTLE - Seattle Mayor Jenny Durkan is proposing an alternative plan to the controversial employee hours or 'head tax' proposal that has sparked heated hearings over the last few weeks and led Amazon to halt construction downtown.

On Thursday night, the mayor's office released details of the revised plan which came just hours before a city council committee was set to vote on the proposal on Friday.

The mayor's alternative proposal would:

  • Reduce proposed head tax to $250 per employee, per year
  • Continue for five years with an affirmative renewal
  • Would not transition to a payroll tax in 2021.

The mayor's proposal would raise about $40 million a year to go towards homeless services and affordable housing. The mayor also said Thursday Governor Jay Inslee and King County Executive Dow Constantine have each promised additional resources to help with the homeless crisis in the coming year.

Just how much the city actually needs to get people out of homelessness remains unclear. A report unveiled this week by the consulting company McKinsey & Company said King County needs between $360 and $410 million annually.

The initial proposal called for taxing the city's largest businesses about $500 per employee, per year to raise an estimated $75 million. Amazon, the city's largest employer, would be faced with more than $20 million per year in taxes.

Last week, Amazon announced it was pausing construction on a 17-story office tower as it awaits a tax vote. It is also rethinking filling office space in another leased building. On Tuesday, Alaska Airlines, Expedia and others also came out against the tax.

Mayor Durkan’s staff said she's received nearly 1,600 emails from Seattle residents as well as letters and calls from tech workers and business leaders in response to the proposed head tax.

Her office said the revised plan has the support of Council President Bruce Harrell, along with Councilmembers Sally Bagshaw, Rob Johnson and Debora Juarez.

The other five council members backed the original plan. If the tax garners the support of six councilmembers it will block a possible veto by the Mayor.

Councilmember Kshama Sawant slammed the alternative proposal, saying the mayor is trying to undermine the business tax. She's also calling for a rally outside the city hall before the council committee meets on Friday.

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