Tim Burgess said the city instead could increase its spending on homeless services and housing by using revenue from a new tax on short-term rentals, such as those listed on Airbnb.
Seattle Mayor Tim Burgess says he opposes a new business tax under consideration by the City Council that would boost spending to combat homelessness.
Burgess said the tax would be ill-advised because some businesses can’t afford it and businesses already are doing their fair share.
“Seattle already has the highest business taxes in the state,” the mayor said in an interview Tuesday, as council members debated the proposal and whether to continue evicting people from unauthorized homeless encampments.
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He said the city instead could increase spending on homeless services and housing with revenue from a new tax on short-term rentals, such as those listed on Airbnb.
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The City Council may vote as early as next month to adopt that tax as part of new regulations on short-term rentals under a proposal put together by Burgess over the last two years.
The tax proposed by Councilmembers Mike O’Brien and Kirsten Harris-Talley and supported by at least two others on the nine-member council would be about $100 per year per employee for companies that gross more than $5 million a year.
O’Brien says the employee-hours tax would affect only the largest 10 percent of businesses in the city and would raise up to $24 million a year, starting in 2019.
Under his plan, the city would borrow $11 million to get started next year. In comparison, the short-term rental tax proposed by Burgess would raise an estimated $6 million a year.
The council members say Seattle’s larger businesses can afford to help more in the battle against homelessness.
“It’s important to recognize we’re in a crisis,” O’Brien said at a budget-committee meeting Tuesday.
Burgess dismissed their argument as “stick it to them” talk, saying, “I don’t engage in anti-business rhetoric. I love jobs.”
The mayor said the city’s spending on homelessness has increased in recent years, with more than $63 million already set aside for next year.
The business tax is part of an initial package of 125 potential budget actions the council is considering as it makes changes to the 2018 budget Burgess proposed in September.
Councilmember Lisa Herbold, the budget-committee chair, said she has included the tax because Seattle is two years into an official homelessness state of emergency.
At the Tuesday meeting, Herbold mentioned that at least 66 homeless people have died on the streets this year.
“Seattle cannot afford to wait,” she said.
Herbold said she’s open to tweaking the amount the tax charged per employee hour and which businesses pay it, as long as the same amount of money is raised.
In addition to O’Brien, Harris-Talley and Herbold, Councilmember Kshama Sawant is supporting the proposed employee-hours tax.
Councilmember Sally Bagshaw spoke against the proposal, calling it the wrong approach because business owners haven’t been involved enough and haven’t signed on.
“We’re talking about raising money from a group not at this table,” Bagshaw said, describing the tax as good politics for some council members but not prudent.
Herbold and Sawant rejected the suggestion that they support the tax for political reasons only, saying they want to help people on the street.
And Sawant scoffed at the idea that business owners aren’t at the table, saying large corporations like Amazon “own the table.”
Mayoral candidates Jenny Durkan and Cary Moon each have expressed reservations about the potential effect on some small businesses, with Moon saying she supports the idea of raising taxes on large businesses.
Burgess said he’s spoken to some homeless-services providers and more than a dozen business people about the employee-hours tax, but has yet to talk about it with any homeless people.
Jon Scholes, president of Downtown Seattle Association, is skeptical of the impact the tax would have on homelessness but confident it would make the city more expensive.
“We need to make sure we’re getting as much as we can out of the dollars we’re spending right now,” he said. “Another tax on jobs in our city is going to hit consumers.”
Sean Smith, a volunteer organizer with the Seattle Housing and Resource Effort who lives in a city-authorized encampment in the Othello neighborhood, said homeless people are only at the table because they’ve demanded to be heard.
“The businesses should pay for the growth that’s happened in the city and the impacts,” said Smith, 51. “Homelessness is definitely an impact of that growth.”
The council plans to approve a final budget in late November.
Asked whether he would veto the budget if it includes the employee-hours tax, Burgess was noncommittal.
Burgess led the 2009 repeal of an employee-hours tax the city had used to raise money for transportation improvements.
Burgess will make way for Durkan or Moon on Nov. 28, when the results of the Nov. 7 election are certified.
The other item that sparked debate Tuesday concerned cleanups and evictions of unauthorized homeless encampments.
Herbold didn’t include in her package of potential budget changes a Sawant proposal to block funding for what they call homeless-camp sweeps, with exceptions for encampments in active park spaces, in rights of way and at schools.
Herbold instead proposed more scrutiny of whether the evictions are being done according to the rules and are leading to housing.
The city has recently changed how it carries out the evictions and now has special teams offering shelter and services to people in the encampments beforehand.
But Harris-Talley said the sweeps must stop, saying the city is hemorrhaging millions of dollars to mostly move people around.
Supporters of the employee-hours tax and of blocking money for sweeps plan to camp out Wednesday at City Hall to mark the second anniversary of Seattle Mayor Ed Murray’s declaring the state of emergency.