If Seattle’s City Council passes a destructive, opportunity-killing tax on jobs, Mayor Jenny Durkan has no choice but to veto the measure. That won’t diminish the city’s heavy spending on the homeless crisis.
SEATTLE is at a critical turning point.
City Hall is finally hearing, loud and clear, that the community has lost patience with its ideological tax crusades and lost faith in its ability to manage the homeless crisis.
Frustrations were simmering for years.
They boiled over last week after Amazon made a blunt decision to pause construction and occupancy of 1 million square feet of office space, and potentially relocate 7,000 to 8,000 jobs elsewhere, if Seattle imposes a new tax on jobs at large employers.
The message is clear and incontrovertible: Seattle’s current proposal to impose a $500 per employee yearly tax on large employers would cause far more harm than the good that would result from a modest increase in social-service budgets.
Will the council ignore seething residents and businesses that it represents, or continue listening mostly to the echo chamber of vendors and special interests guilting the city into spending more on programs with dubious results?
Mayor Jenny Durkan is hedging on what she’ll do, floating the idea of a compromise.
There is no middle ground or clever policy fix available this time. Durkan must veto the head tax if it passes the council.
This extraordinarily large and punitive jobs tax, coming on top of Seattle’s existing heavy taxation of business and a series of anti-business policy moves, is now a line in the sand. The problem is not just the tax itself but overall uncertainty about whether Seattle is a reasonable and predictable place to do business.
Does Seattle want to be a place where entrepreneurs and top companies from around the world want to locate, spawn startups and support a galaxy of jobs, directly and indirectly?
Everyone but council members seems to know the core issue of poverty must be addressed not just with more shelters and subsidized apartments but by creating jobs and opportunity for a better future.
Yes, the homeless population needs more help.
Durkan is making smart moves with King County Executive Dow Constantine to consolidate the regional response to homelessness. Seattle does much more than its share and the crisis won’t be resolved without better coordination, more effective use of resources and a stronger regional and state response. The state in particular needs to improve mental-health and addiction-treatment services.
Consolidating services should reduce overhead and administrative costs for the city, county and vendors. The savings should generate more dollars for shelters, navigation teams and housing projects.
Such economies will also help build public trust. The public is heavily funding these programs and needs to see progress and that officials are wisely using the millions consumed by these programs.
Despite the council’s chest-clutching rhetoric, its head-tax vote is not a decision about whether to help those most in need. The city is already spending $75 million a year on homeless services, double the level of five years ago, to support a population recently pegged at 5,485 unsheltered and 6,158 in shelters. Residents also approved a $290 million levy for affordable housing two years ago.
Seattle now spends more on housing and human services than it does on its fire department.
Durkan notes that each dollar spent has historically been leveraged to nearly $3 with federal, state and private resources. As the city’s consultant has said, the major problem isn’t funding, it’s improving the system’s performance.
Housing costs aren’t helping. But Seattle is spending heavily on that front. Some 3,000 affordable housing units are now being built, adding to 27,845 subsidized units spread across the city. It’s unclear how much difference head-tax proceeds would make.
What will clearly make things worse, though, is a tax on jobs that encourages Amazon and other big employers to create their next jobs somewhere else.
Remember, City Hall’s recent spending increases on human-services and other programs was enabled in large part because Amazon chose to spend $30 billion in Seattle, building its headquarters and providing nearly 50,000 jobs.
If the company stops growing here, the loss of direct and indirect jobs, and reduced levels of construction, will shrink Seattle’s budget.
City Hall won’t be able to continue spending on social services, pensions and discretionary programs at their current levels, at which point council members will truly have reason to clutch their chests.
Politicians who make such a bad choice will probably lose their jobs — and there will be less opportunity to find another one in Seattle.