The Seattle City Council is expected to take up the proposal this month.
A Seattle task force is recommending the City Council adopt a $75 million-per-year “head tax” on high-grossing businesses to help address homelessness.
The council narrowly rejected a $25 million-per-year head tax (also called an employee-hours tax) in November, instead vowing to revisit the issue and pass a tax this year after more study by the task force.
Under the November proposal, the city would have taken 6.5 cents per employee, per hour, from companies grossing more than $10 million per year.
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With representatives from nonprofits, advocacy groups and businesses, the task force was told to consider “new progressive revenue sources,” including a head tax (also called an employee-hours tax) capable of raising $25 million to $75 million a year.
By choosing the high end of that range, the panel is recommending a tax that would yield three times more than what the council turned down a few months ago, said Katie Wilson, general secretary of the Transit Riders Union. At the same time, the task force also is emphasizing “an urgent need for fiscal discipline” at City Hall, said Lisa Daugaard, Public Defender Association director. Wilson and Daugaard are task-force members.
A draft report from the panel says taxes “should not be increased lightly” and that the some amount of money needed to combat homelessness “can and should be located by making cuts to public spending outside the homelessness-services sector.”
Rather than say exactly which businesses should be taxed and how, the task force is recommending the council chose from several options. Under the first option, companies with more than $10 million in gross revenue would pay the bulk of the tax, while under the second and third options, the threshold would be $8 million.
The panel, co-chaired by Councilmembers M. Lorena González and Lisa Herbold, is recommending the council dedicate about 80 percent of the tax money to low-income housing and about 20 percent to emergency shelter and services.
The council is expected to take up the proposal this month, after staff write a final task-force report. The Seattle Metropolitan Chamber of Commerce opposes the idea and sat out the task force in protest.