Could a business tax be Seattle Mayor Jenny Durkan's first true test in governing?
The mayor is poised to face a fight in a battle over a proposed head tax on businesses as a way to fund homeless and housing services.
Seattle City Council unveiled the results Wednesday of the "Progressive Revenue Task Force," which unanimously agreed to forward a proposal to tax businesses based on amount of full time employees. It believes as much as $75 million a year could be raised if the 1,100 largest businesses were taxed.
There are many details to be worked out, including how the money would be allocated, and when formal legislation would be introduced. But councilmembers Lorena Gonzalez and Sally Bagshaw both hinted it could be rolled out later this spring.
The push back has already begun.
"It's a progressive town, that matches what we want to be, a progressive company," said restauranteur Ethan Stowell while sitting in Staple & Fancy, one of his 14 restaurants in the city.
He's put his money where his mouth is donating tens of thousands to the United Way, providing food for the homeless, and training for unsheltered teens.
But he shakes his head over the Council's ideas.
"I'm a little bit different than most," he said. "I'm all for people coming up with money. If we're going to solve the homeless problem, I think we all need to chip in some more money, no doubt about that. I don't think the head tax is the right way."
Stowell also said he worries about how small businesses like his may react if handed a tax bill.
"It's very much a social justice tax, and I'm very concerned that some businesses would cut out their philanthropy," Stowell said.
The Downtown Seattle Association is also concerned.
"We have a serious issue when it comes to homelessness in our city, and this is not a serious proposal. The City Council has spent more and more every year and the problems keeps getting worse," said DSA President Jon Scholes.
Durkan expressed concern over a head tax during her campaign last fall. She maintained her position in an interview with KING 5.
"I'm willing to listen to what they say, but I think we really have to be careful to protect our small businesses and make sure we keep a vibrant economy," she said.
The mayor recently instructed city department heads to look for cuts and live with current budgets.
"We have to make sure we can live within on means and then reallocate stuff," she said.
Stowell says he'd likely have to take out a loan if the tax was passed as discussed and then likely pass on the increase to customers.
"The system we need to set up is going to be one that responds to them quickly, and I don't think the city has set up one that can do that, and I think the money they're asking for with the head tax is not going to help out," said Stowell. "I look at homelessness like an oil spill, right? The first thing you do is stop the spilling, and then go around and clean up, and that's the approach we need to have.”
"Continuing down the path we have gone down with more money is not going to solve the problem."
