State lawmakers from the Seattle area have restarted their push for a tax on big businesses in King County, using a technical change to buy more time.
On Thursday, they unveiled a new version of their closely watched plan to let the county impose a tax to fund affordable housing and homeless services, and the updated bill could raise more money than previously proposed – nearly $152 million a year.
That means talks will continue in Olympia about whether and how much to tax large corporations, including tech titans like Amazon.
An earlier version of the plan sponsored by Reps. Nicole Macri, D-Seattle, and Larry Springer, D-Kirkland, didn’t make Wednesday’s deadline for regular bills to be voted out of the state House because details were still under debate.
But Macri and Springer now have introduced a replacement, House Bill 2948. The new version is a special, revenue-related bill not subject to Wednesday’s cutoff, House Democratic Caucus spokesman Curtis Knapp said.
Like the old bill, House Bill 2907, the new version would authorize King County to enact a tax on compensation paid by most big businesses to employees making at least $150,000 a year. But the new bill would allow the county to impose a tax rate of 0.25%, up from a range of 0.1% to 0.2%.
The new version also would require the county to distribute the money raised by the tax in a particular way. Large cities, such as Seattle and Bellevue, could become eligible to receive shares equal to 0.1% of the relevant compensation paid within their boundaries.
Most of the rest of the money would be allocated by the county, according to certain guidelines. The regional homelessness entity that Seattle and the county are creating would be involved.
The new version says the state Employment Security Department would administer the tax, and 1% of the tax money would cover the cost of that work. That’s what makes House Bill 2948 a special, revenue-related bill, Knapp said.
It was never going to be easy to pass a big-business tax during this year’s short legislative session, barring lockstep support among Democrats. Gov. Jay Inslee said Thursday he hasn’t taken part in discussions about the idea.
But many labor and nonprofit leaders backed House Bill 2907, and companies including Amazon, Microsoft, Expedia, Starbucks, Costco and Alaska Airlines have endorsed the concept.
“Everyone is still at the table and we’ve got 22 days left (in the session),” Macri said in an interview Wednesday. “We’re making progress every single day. We’re spending multiple hours every day talking about this idea. … The policy consideration is not over.”
The interested parties are discussing how to distribute the tax money across the county and among various priorities, Macri said. They’re also still discussing “the interaction” between regional and local taxing authority, she said.
Some corporate leaders have pushed for a clause that would ban Seattle from enacting its own big-business tax. Unlike the county, the city has that ability now.
Seattle Mayor Jenny Durkan and King County Executive Dow Constantine, who worked to draw up and build support for House Bill 2907, said it would allow the county to raise up to $121 million a year. House Bill 2948 could raise almost $152 million in 2021, Durkan’s office estimated Thursday.
In a statement, Durkan praised Macri, Springer and the new bill. “I’m heartened that a progressive business tax continues to make its way through the Legislature,” she added.
City Councilmember Kshama Sawant has proposed a Seattle-only 1.7% payroll tax on large corporations, saying it could raise $300 million a year.
In her own statement Thursday, she said business leaders want to use a state bill to stop her proposal.
“They see the Tax Amazon movement gaining momentum,” she said.
Seattle Councilmember Teresa Mosqueda has supported House Bill 2907, though she also has spoken out against a ban on Seattle’s ability to tax big businesses.
“I’m sure the bill conversation isn’t over, so my concerns around blanket preemption remain,” she said Wednesday, vowing to work with state lawmakers “to bring in the much needed revenue to our region.”
The Macri-Springer plan has drawn fire from Republicans in Olympia. Rep. Drew Stokesbary, R-Auburn, said Thursday that a state-coordinated approach to homelessness is needed, and that he doesn’t trust “Seattle’s political leaders to do the job.”
Inslee has proposed a state budget that would spend $300 million in three years to try to reduce unsheltered homelessness in Washington by half.
“Obviously more resources will be beneficial, but I’m focused on what the state can do right now,” he said Thursday.
Staff reporter Joseph O’Sullivan contributed to this story.