The Seattle City Council will stop deliberating a proposal to tax large corporations, council leaders said Thursday, citing a statewide coronavirus-emergency proclamation that restricts what public agencies can discuss during the health crisis.
The decision by Council President M. Lorena González and Councilmember Teresa Mosqueda will stall the big-business tax championed by Councilmembers Kshama Sawant and Tammy Morales, who already faced opposition from Mayor Jenny Durkan.
The Open Public Meetings Act (OPMA)-related proclamation, issued by Gov. Jay Inslee in March and extended until May 31, says agencies are prohibited from meeting in person and from deliberating matters remotely, “unless those matters are necessary and routine matters or are matters necessary to respond to the COVID-19 outbreak and the current public health emergency.”
The council’s budget committee, chaired by Mosqueda, met twice last month via teleconference to consider the proposal by Sawant and Morales to enact a payroll tax on Amazon and other corporations with annual wage costs of more than $7 million, and a third remote meeting was scheduled for next week. But Councilmember Lisa Herbold skipped both discussions and wrote a letter to González last week expressing concern about compliance with the state proclamation.
The Sawant-Morales proposal makes reference to the civil emergency that Durkan and the council declared in March and includes a plan to send coronavirus-crisis relief checks to Seattle households. The proposal also includes the tax, which the council members have said could raise $500 million a year and which would not have an end date.
In interviews Thursday, González and Mosqueda said they now agree with Herbold that the council shouldn’t be considering the tax until Inslee’s proclamation expires. González sets the agendas for full council meetings, where final votes are taken. Mosqueda sets the budget-committee agendas.
“Though there are some components of the legislation that are related to the current public health crisis, there are also many components of the legislation that are intended to outlive this crisis and are just completely unrelated to COVID-19,” said González, who made her case in a memo sent to her colleagues Thursday.
“As long as the bills stay the way they are, they represent a pretty significant risk,” the council president added, “to continue to have meetings without the option for in-person viewing.”
The council does need to talk about a new way to raise revenue, González and Mosqueda said, partly because the sales taxes that Seattle relies on are expected to plunge due to the pandemic and contribute to a $300 million budget gap this year. But now is not the time, they said. “We’re all going to be better served by having that discussion when people can fully engage,” Mosqueda said.
Sawant decried the move Thursday during a news conference she previously scheduled to outline how her “Amazon tax” could help Seattle recover in the long-term by supporting up to 34,000 construction and green-collar jobs. Large corporations can and should pay to expand the city’s social safety net, she said.
“I am not surprised, actually, but I am completely stunned and scandalized by this decision. We don’t know how long this pandemic will go on,” Sawant said, blasting González and Herbold. “This is not about the OPMA and their supposed loyalty to democratic laws. This is about their loyalty to big business.”
Morales declined to comment.
The Sawant-Morales proposal includes three bills. The first would establish a payroll tax, the second would authorize the city to borrow $200 million this year from existing sources and the third would direct spending.
Seattle would spend the $200 million this year to send coronavirus-crisis relief checks to households. The tax would be collected later and used to repay the loan. Subsequently, tax money would be be spent on affordable housing and Green New Deal programs.
Sawant and Morales have described their proposal as an emergency package because households would receive relief checks. They’ve also said their tax could help Seattle recover from the pandemic’s economic wreckage by providing the city with a new revenue stream.
Even so, the council shouldn’t be making decisions about a permanent tax via teleconference, Herbold wrote in her letter, citing an analysis by the Seattle’s law department that the council hasn’t made public.
“It really hit me how much governing by virtual meeting is governing in the dark when I hosted a 3,200-participant town hall,” she added in an interview Wednesday, referring to a recent meeting about the West Seattle Bridge.
“I couldn’t tell if anyone shook their heads in disappointment, frowned or nodded, booed or clapped,” Herbold said about that meeting. “In-person governance is fundamental to our principles of democracy and in a virtual meeting session, we … are isolated from the messiness of deliberations on lasting, important and often polarizing public policy decisions.”
González didn’t initially think the council would be violating Inslee’s proclamation by discussing the Sawant-Morales proposal and still isn’t certain, she said. But having spent more time studying the issue and having received legal guidance, she now thinks the risk is too great, she said.
The state attorney general’s office didn’t immediately return a request for comment about the matter.
In her letter, Herbold asked González to “pursue one of two alternative paths.” The council could narrow the scope of the Sawant-Morales proposal to address only the current public health crisis or could postpone deliberations, she said.
Politically, waiting might make more sense, Herbold contended. Emergency bills require seven council votes and the mayor’s signature, and are immune from voter referendum. Durkan has criticized the Sawant-Morales proposal for various reasons, and business leaders have slammed it as a “tax on jobs” that would discourage hiring after the pandemic, while Herbold previously has said voters should perhaps make the call.
González said Sawant and Morales will have to decide whether they want to narrow the scope of their proposal or wait. Mosqueda said she would be open to a narrowed proposal.
Stephen DiJulio, a principal at the Seattle-based Foster Garvey law firm who specializes in local government matters, said parsing what counts as emergency legislation can be challenging.
“There is not a clear-cut answer,” DiJulio said, describing the coronavirus crisis as unprecedented. “We have little law to guide us.”
Tom Fitzpatrick, an attorney who’s taught at the Seattle University School of Law and served as executive director of Snohomish County, was less equivocal, calling the Sawant-Morales proposal “a subversion” of the OPMA. “The argument that this has to do with the public health emergency is crap,” he said.