HEAD TAX: Where the proposal stands and what happens next

(WSB photo from April 19th WS Chamber-convened ‘head tax’ discussion)

One week ago today, four City Councilmembers, including West Seattle/South Park’s Lisa Herbold and WS-residing/citywide-representing Lorena González, officially unveiled their proposal for the so-called “head tax,” a business tax to raise money they say would be used mostly to build housing for people who are homeless. That was one day after Herbold and González had made their case to a gathering convened by the West Seattle Chamber of Commerce (WSB coverage here).

If you haven’t already read it, the proposed legislation is here; the resolution establishing how the money would be spent is here; a proposal with specifics for the first five years is here.

Three days after the proposal went public, there was an at-times-contentious three-hour public hearing at City Hall on Monday night:

On Wednesday, the council’s Finance and Neighborhoods Committee discussed the proposal, including a plan for how the money would be spent:

On Thursday, Councilmember González sent a survey to “business leaders.” One West Seattle recipient forwarded it to us anonymously. In the e-mail, González addresses the recipients, “In an effort to create an additional tool to engage with you regarding the proposed Employee Hours Tax/Payroll Tax, the Council has developed an online survey which allows business owners to give direct feedback to the Council and express any specific concerns.” Going through the survey, we note that it asks for opinions about housing and homelessness before asking for opinions on the potential head tax and the payroll tax that is proposed to follow it in three years. The survey is here.

Today in her weekly update, Councilmember Herbold went through a copious amount of backstory on the tax proposal and explanation why she supports it. If you aren’t already on her mailing list, you can read it on the city website. She wrote in part:

… The structural cause of homelessness in high cost cities like Seattle is that there is a growing unmet need for more affordable housing created when new workers, earning new high wage jobs, and low-income workers are in competition for limited housing. Lower income workers lose out and the result is that the explosive growth and rising rents that Seattle is experiencing has increased homelessness even as we, each year, exit more than 3,000 people out of homelessness and into permanent housing. A progressive tax on businesses most benefiting from this growth is our best option because we already rely heavily upon regressive property and sales taxes that hit everyone equally. …

Along with Herbold and González, the tax proposal is co-sponsored by Councilmembers Teresa Mosqueda (citywide) and Mike O’Brien (northwest Seattle’s District 6).

The next scheduled official discussion is back before the Finance and Neighborhoods Committee at noon Wednesday (May 2nd), with “issue identification” to be included; then the committee is scheduled to vote on it a week later, at 2 pm May 9th, including consideration of any amendments. If that schedule is kept, the full council would vote at 2 pm on Monday, May 14th. All three of those meetings would have public-comment periods; you also can reach councilmembers via e-mail or phone – contact info is here.

58 Replies to "HEAD TAX: Where the proposal stands and what happens next"

  • The Truth April 27, 2018 (11:21 pm)

    That was the most leading survey I have ever taken.  I can’t wait to see how they spin the results!

  • Plf April 28, 2018 (2:08 am)

    I struggle with the ongoing taxes, being increase in proptery taxes or the head tax.  Money continues to be allocated yet the outcome data doesn’t demonstrate positive results.  Money is important but I really wonder if the fundamental strategies that have been developed are the correct ones, or need to be reconsidered or amended.  This city continues to throw money at every issue without having measurements that are quantifiable.  Proptery taxes are creating homelessness forcing folks to move,  creating a negative business climate discourages job creation,  it is time for new leadership that will be Stewards of out hard earned money, funding creative solutions that address issues, measure success, and encourage some level of personal responsibility.  I’m exhausted of the incremental tax increases and won’t be voting for additional taxes or the politicians who keep asking for more without them doing their do diligence 

  • gxnx April 28, 2018 (7:57 am)

    Smirking faces…..I am better than you!!

    The city council is being bought by the Union….

  • neighbor April 28, 2018 (8:29 am)

    I would happily pay whatever was necessary to move people into housing, but I’ve lost faith in our city council. They seem to confuse spending with results, despite expert advice to the contrary. Until they’re willing to make the difficult choices to reallocate the funds more appropriately, all the extra taxes in the world aren’t going to get a different result. Everything about this saddens me.

  • Concerned April 28, 2018 (8:56 am)

    So the mayor and city council pontificate that Seattle is getting too expensive and unaffordable and in the same breath present new levies and taxes. Brilliant

  • 20yrWSResident April 28, 2018 (9:02 am)

    I really am disgusted witn this city council there disdain of the middle class in this city is really making it terrible. If your homeless or a rich developer they hear you. This is a real job killing tax and im not some conservative republican. I really dont approve of any of there ideas such as this dumb head tax, first come first serve requirement on landlords, doubling rideshare costs, sugar tax, doubling every property tax levy they can, the list goes on. I know we are actively planning on where to move next this city is led by some really incompentent politicians that treat us like a check book and i dont see these taxes being used effectively its always just more more more

    • Sitting Pretty April 29, 2018 (10:49 am)

      Assuming you’re a 20 year WS resident, there’s a suggestion that you are either a home owner or a renter who can afford your lease. This isn’t the default for our middle class any more. The earnings necessary to live in Seattle aren’t feasible for many families. This tax is in response to our state’s terrible regressive policies, constitutionally preventing a fair state income tax. The longer our residents and legislators uphold this ugly policy, the longer our counties and cities will need to squeeze money out of vehicle registration, sales tax, tempoaey levies, and property taxes to pay for vital services and necessary infrastructure. 

      Washington’s tax policy enslaves the middle class, not tiny, mostly ceremonial taxes on billion dollar companies. Don’t take their focus-group-crafted responses at face value. Unless you own stock in these companies, these taxes won’t impact you at all.

      • Sna April 29, 2018 (1:24 pm)

        Two points:

        1) 60% of Seattle’s general fund revenue comes from business taxes

        2) Oregon is often scored as having the most progressive tax structure, yet Portland has more homeless on a population adjusted basis than Seattle. 

        • M April 30, 2018 (6:07 am)

          Thank you for those two points.

          I am a landlord. In an effort to keep the rents for my units affordable, I have voted ‘No’ on any legislation that increased property taxes. However, Seattle city residents collectively (including Seattle City Council members) continue to approve legislation to increase property and other taxes that make housing less affordable. (It is absolutely absurd to complain about the lack of affordable housing while simultaneously proposing tax increases.) Because renters, city legislators, and property owners alike collectively determine property tax rates, which landlords have no control over, I propose changing residential rent structures to base rent plus property tax (like a commercial single net term.) This structure would reflect the majority vote and transfer the accountability of increasing rents directly due to property taxes to the public.

          The fact that the tax revenues are so poorly managed, akin to municipal slumlords, is another issue. If a residential landlord maintained their properties to such a low level as the city does (think crumbling pavement in parking areas and roads, garbage, graffiti, etc.) with the revenues that they generate, they would be a disgrace to the community.

          • 98126res April 30, 2018 (8:12 am)

            Awesome reply….  Thanks ‘M’

            ” If a residential landlord maintained their properties to such a low
            level as the city does (think crumbling pavement in parking areas and
            roads, garbage, graffiti, etc.) with the revenues that they generate,
            they would be a disgrace to the community.”

  • TM April 28, 2018 (9:14 am)

    Councilwoman Herbold stated, “A progressive tax on business most benefiting from this growth is our best option because we already rely heavily upon regressive property and sales taxes that hit everyone equally.”

    Really?  What is she smoking?  Last night, local news reported that both Safeway and QFC will pass on the cost of the head tax to customers due to low profit margins in the industry.  Higher food costs for everyone sounds regressive to me…

    • Zark00 April 28, 2018 (1:32 pm)

      Wow, that QFC/Safeway statement should kill this tax by itself. This is exactly the negative impact to lower income families they claim they are trying to avoid. Total fail on Herbolds part, I regret voting for her. 

      • Billions a year April 28, 2018 (2:48 pm)

        TM & Zark,

        While I don’t doubt that Safeway & QFC will attempt to increase prices to cover this (or any) tax, they idea that they need to do that due to “low profit margins” is absurd & patently false.

        It’s a political act for them to say this, and it should be seen for what it is.

        Safeway is a multi-billion dollar company (Safeway summary) that makes money hand over fist.  For them to say they’d need to pass on this tax in the form of higher prices is simply untrue–they will WANT to raise prices, and they certainly don’t want this tax, but let’s be honest–this tax would no way put that company in the poor house.

        • neighbor April 28, 2018 (3:44 pm)

          Regardless of how anyone feels about it, the fact remains that this will ultimately be passed down to customers in the form of higher prices.

        • Ji April 28, 2018 (8:00 pm)

          The grocery industry has always had very low margins – why do you think there are no local grocery stores anymore? You don’t know what you are talking about.

          • WSB April 28, 2018 (8:28 pm)

            There ARE local grocery stores – Thriftway, for example, and PCC and Metropolitan Market are locally based mini-chains. (All three are WSB sponsors, which we appreciate – few national businesses advertise with local micropublications.) As for the margins, that is a point that Sara Osborne, a regional executive for Safeway, has made in the local head-tax discussions – I’ve noticed because she was our contact person for years during the Admiral Safeway project. Anyway, as for the numbers, here’s the latest from Albertsons.

        • Fred Jones April 28, 2018 (8:10 pm)

          @ BILLIONS A YEAR

          makes money hand over fist. <

          What type of “fact” is that?   You clearly don’t understand economics or  finance.

          • billions a year April 28, 2018 (11:22 pm)

            JI:

            See WSB response above, and if that’s not enough go ahead and research how much a chain like Safeway makes.

            Fred:

            Why did you put “fact” in quotes as if I used that word?  That aside…  You are actually arguing against my statement that they make a ton of money?   Really?  

          • Sna April 29, 2018 (11:02 am)

            From the full year earnings release:

            Net income was $46.3 million during fiscal 2017, which includes the $963.8 million income tax benefit discussed above.”

            As an industry supermarkets make about 1% profit 

            https://www.fmi.org/our-research/supermarket-facts

            Hand over fist isn’t exactly how anyone would describe supermarket profitability.  

          • billions a year April 29, 2018 (1:25 pm)

            SNA,

            Look, getting your information from FMI.org is like asking a barber if you need a haircut.  They’re an industry voice, what do you think they’re going to say?

            CEO of Albertsons?  Makes over 9 million a year.  

            I stand by my claim that a head tax isn’t going to impact the company.*

            *Please note that I have never suggested a head tax is a good idea, nor have I said companies won’t raise prices if it’s implemented–my specific and small point was simply that a company like Albertsons/Safeway does not need to raise prices to compensate for a head tax.

  • MrB April 28, 2018 (9:32 am)

    Ms. Herbold seems solely focused on raising taxes and making Seattle less friendly to business owners.  Meanwhile the infrastructure in West Seattle continues to crumble.  We deserve proper representation, someone devoted to making our neighborhood a better place.  

  • Imcentrist April 28, 2018 (9:33 am)

    This is the worst idea yet that survey was absurd also well looks like this is going to happen. What a slanted public meeting too. Thanks for posting the video these public meetings really dont represent the public view but extremist views. I just dont have time to go and i feel with that crowd different opinions arent accepted

  • Peter April 28, 2018 (10:12 am)

    They’ll try anything but the one thing that would actually solve our housing crisis: changing Seattle’s absurd zoning and land use laws to allow the market to meet demand for housing. But no, they’d rather tax jobs than let the free market work. We need to get these idiot socialists out of office. 

  • they April 28, 2018 (11:13 am)

    Until I start hearing things like ” here is what we improved and this is how much we save” Everything will be a NO!

  • VanDammage April 28, 2018 (11:53 am)

    Everyone remember how painfully incompetent and out of touch with her constituency Herbold is when it’s time to vote next year. Thanks in advance

    • S April 28, 2018 (12:50 pm)

      Amen. I have been counting the days to Election Day since she announced first come first serve for rentals, and she keeps reminding me with proposals like this head tax one. I won’t forget.

  • Mama Suze April 28, 2018 (12:18 pm)

    The City of Seattle should show the tax payers of the city and county a breakdown of where the millions of dollars spent on the homeless problem has gone.  Saying that X amount went to this program or that program doesn’t do enough to explain what the money has been spent on.

    I admit to liking the idea put forth by Danny Westneat in the Seattle Times the other day of the city investing in some of the giant tents (from FEMA?) that San Francisco has decided to use. They house something like 350 each. . . . .  and putting them on Terminal 5, and then cleaning up our town! No more random tarps and tents under bushes, next to the courthouse, under over passes.  Move to the “big tent” or move on. . . . . . . Sounds a tad harsh, but I am sick of the situation.

    • WSB April 28, 2018 (6:22 pm)

      While San Francisco’s interim mayor does have a new policy to get campers off sidewalks – based on a voter-approved proposition he authored two years ago:

      http://www.sfexaminer.com/farrell-calls-homeless-sweeps-mission-district/

      … the “big tents” are in San Diego:
      https://www.theguardian.com/us-news/2018/mar/29/san-diego-homelessness-big-tents

    • My two cents ... April 28, 2018 (8:05 pm)

      It does serve some consideration – consolidate and maximize resources to address the situation. You may not want to be homeless within this community, but you still are part of the community, and as such you should still abide by some basic responsibilities/sacrifices. If that means having shelter options in consolidated sites as opposed to living to Alki or in Discovery Park, then so be it.  Taxpayers across the city would probably prefer not to pay taxes – but we do as part of being in a community.

  • Joey's Human April 28, 2018 (12:18 pm)

    They should also tax nonprofits that pay their CEOs more than $1 million a year.

    • My two cents ... April 28, 2018 (7:55 pm)

      $1 million? 

      Too often we equate not-for-profit as being altruistic. Case in point: Regence BlueShield reported gross revenue of $1.67 billion and net revenue of $55.3 million. The President/CEO makes $917,000.

  • OP April 28, 2018 (12:48 pm)

    All this outrage over the (expected) incompetence of council critters and political ticks like Herbold, Gonzalez,O’Brien, etc., yet, miraculously, they keep getting elected—or, some worse ideologue takes his/her place. They are impossible to remove. How is this possible? In the most simple terms, we live in a far left ideological vacuum where opposition voices to the SCC are not heard, even the moderate/middle-of-the-road voices go unheard. This is a travesty. Worse still, the fact that Herbold & Co. keep getting elected speaks poorly of us as an electorate.

    • WSB April 28, 2018 (5:16 pm)

      For accuracy’s sake, of the four “head tax” sponsors: This is Lisa Herbold’s first term. Lorena González was elected to a second term last fall. Teresa Mosqueda was elected last fall for the first time. Mike O’Brien was first elected citywide in 2009 and then in 2013 was re-elected, running in what is now the Northwest Seattle district. The district reps are all up next year (2019).

  • MJ April 28, 2018 (1:23 pm)

    Enough taxing already. 

    The head tax is a potential resource to pay for preschool/education in lieu of a property tax.  Property taxes have gone through the roof, no pun intended, and in up making housing less affordable.

  • scubafrog April 28, 2018 (1:29 pm)

    What’s next?  I’m going to politely email both of them, telling them that more taxes won’t work.

    And I’m going to vote for their opponents.  

    We’re powerless, Seattle.  We’ll have new taxes one way or another:  Via the popular vote, or the city council.  Very sad.

  • PW April 28, 2018 (4:29 pm)

    I cannot recall a City Council run so poorly with absolute disregard for accountability and lack of

    any ability to run a government.  Please vote them out in November those that are up for reelection.  

  • My two cents ... April 28, 2018 (7:49 pm)

    This proposal is asinine. If the community has a problem (i.e. homeless situation), then the community as a whole needs to address it as opposed to hitting up an easy target (big business). 

    Sorry, the reason for our growth has been a result of business within the city limits. I’m tired of hearing about all of the “evils” that have been brought about because of companies being based out of here. Do we want to go back in time and have a dying downtown? How about here in West Seattle where the Junction was on the verge of easily becoming a ghost town.

    In addition, this is rather short-sighted. What happens when (not “if”) things slow down and/or a recession hits? Will this tax be lifted? 

  • Rick April 28, 2018 (9:22 pm)

    How ’bout we just take Sawant’s advice and just seize the city council and start dictating policy. You know, the one “the people” want.

  • Jalair April 28, 2018 (10:31 pm)

    Audit Homeless Inc.  Reduce the number of non-profits with their fingers in the pie. Advance minimum performance requirements.  

    Mark Putnam, August 2017:  “Funding entities such as All Home, King County, the City of Seattle and United Way of King County have worked in partnership with direct service providers to increase efficiencies in the homeless response system to better serve individuals and families. Driving results with the best available data and cultivating a culture of accountability and continuous improvement will all continue to increase our capacity to serve the most vulnerable residents of our community.”
    Mark Putnam, Exit Interview from All Home, February 2018: “
    And most people understood there was a limit to what my responsibilities were. They were not as deep as that term implies. And definitely my partners at the city and county understood that, and they were doing their own things. We worked well together because I like them and they like me, and we made it work … But it needs to be institutional, not relationships.” “It’s not the solution to homelessness; it’s not going to solve everything. It would just put in place a structure that people will know who is accountable and will drive toward results, delegate and everyone knows who is making a decision.”

    Barb Poppe October 2017, “Using data from 2014-15, she said in 2016 that Seattle had the resources to house the homeless then if it implemented the recommendations.

    But Seattle was slow to act, which echoes what Poppe warned about in 2016when she told the city “you’re much more inclined toward discussion and planning and process that goes on and on and on.  Before, the city would award grants with no emphasis on goal-setting, or based on long-standing relationships with nonprofit providers. The city has moved to competitively bid for grants, using a results-driven approach.”
    My personal opinion is that the providers are still driving the bus.  They sat on the Business Tax committee and said how much money they wanted, and the City Council is simply doing their bidding.  We_cannot_do business like this anymore.  People are suffering and the system is extremely wasteful (and corrupt.)  

    The system needs to be coordinated, and someone in government needs to be driving the bus with oversight from people who are not profiting from the contracts.  Speaking of driving the bus, it reminds me somewhat of the structural changes we went through in making Metro a King County entity.  That was a kicking and screaming episode and this will be too.  Stand firm for people experiencing homelessness and for our housed neighbors and push back HARD on this tax.  Say NO.

  • Speak Out Seattle April 29, 2018 (12:19 am)

    Seattle has a nearly  $6 billion budget with nearly $1 billion going to “Administration.” The budget has increased 33% since 2014 while the population has only increased 5%. While spending had doubled on homelessness since 2012, so has the unsheltered population. There is no need for any new taxes. There is a need for a new city council with new ideas and will take action to bring people inside. 

    • Anna April 29, 2018 (9:02 am)

      AMEN!

  • The Truth April 29, 2018 (9:33 am)

    The only thing that makes me happy about this legislation is that it seems to be the straw that is breaking the camels back.  It seems that this is the idea that has finally grabbed the voters attention and are making people ready to move on from this failed council.  Get involved in identifying a new leader for WS/SP!!!  It is time to move on!!!

  • Rick April 29, 2018 (11:55 am)

    Screw it. I’m going and buying a new Mclaren. But I won’t register it in seattle.

  • gatewood April 29, 2018 (12:34 pm)

    So,  They already wasted and lied about a ton of money for the MASSIVE Move Seattle levy and they want to now convince us that this 75 million will be spent wisely?  Please read this article and I hope the Blog can help figure out how this might effect projects in WS.  (If anyone is going to get the real, unsalted story it’s the WSB)

    https://www.seattletimes.com/seattle-news/politics/12-million-per-mile-for-a-bike-lane-that-should-trigger-a-civic-heart-attack/?utm_source=facebook&utm_medium=social&utm_campaign=article_left_1.1

  • MJ April 29, 2018 (5:47 pm)

    The FB funding needs to stay in WS, repaving streets would be a good use including FB.  

  • 98126res April 30, 2018 (8:56 am)

    This absurd tax was even reported on 4/30 Fox Business, stating:

    “AMAZON, with 45,000 employees, would be taxed an additional $20 Million a year.” 
    The host added:  “Moooove”

    Seattle has a shadow government and power hungry City Council who dismiss taxpayers.  They slyly legislate socialism and income redistribution, disguised as helping homeless and renters.   Rent = Rent + Property Taxes. They want more dependence on ineffective local government.  Herbold’s own office does not answer phone calls, or return calls as stated in her message.

  • We The People April 30, 2018 (9:11 am)

    Is it time for the residents of West Seattle to discuss breaking off from the City and forming their own?  Has Seattle become to big to realistically  manage itself with the limited resources spread out so thin that currently has residents frustrated?    West Seattle Secede 2019…..it begins….

  • T Rex April 30, 2018 (4:13 pm)

     The Democrats in this city are taking advantage of us thinking that because of the incredible hate that is the result of the  election of Donald Trump that they think they can push this type of SH*T through and no one will do or say anything about it and  THEY will keep electing them back in office. What they don’t see is how he got elected in the first place. Because of SH*T like this.  And please don’t respond about Russia and poor, poor Hillary Clinton, that is not the point of this post.

    Vote them out, vote in people who care about their job and this city and not their big fat paychecks and all the damn benefits they get from being an elected official. Our forefathers wrote the Bill of Rights and the Constitution because they loved their new country. Most people who run for office

    • heartless April 30, 2018 (7:45 pm)

      Uh, you okay there?

      Did you have a heart attack mid-rant?

    • JC May 1, 2018 (11:48 am)

      Well said T Rex!  

      • heartless May 1, 2018 (12:21 pm)

        JC–

        No, it wasn’t well said.  It was objectively poorly said.  Look:

        First T Rex says that democrats “are taking advantage” of people because of the election of Trump.

        Then he says Trump “got elected in the first place” because democrats were taking advantage of people.

        That’s not well said!  That’s illogical!  Both of those things that T Rex said CANNOT BE TRUE!

  • TiredofGovernmentGreed April 30, 2018 (9:52 pm)

    My house property taxes have increased more than 70% over the past 4 years.  And my unusually high car registration fee includes $80 of “TBD” Seattle tax on each car.  In return for those excessive taxes I get potholes in the streets, garbage piles on the sidewalks, developers putting up buildings without off-street parking, overloaded buses during rush hours, and the threat of taxes on jobs and a “congestion” tax on cars that pass through the downtown corridor.  Our Mayor and City Council are hostile to the middle class, punishing to business, and exhibit no ability for urban planning.  Please vote these elitists out of office.

    • JC May 1, 2018 (11:47 am)

      You are spot on!!!  Exactly what is happening to our poor city that used to be a great place to live.  The way things are going, Seattle will be the next Detroit.  So sad……

  • T Rex May 1, 2018 (7:50 am)

    Weird, my point was nowadays my opinion is that people run for office simply for the perks. Nothing else.

     

    Sorry Heartless if you thought it was simply a rant, just voicing my opinion. I have lived in Seattle over 30 years, I feel in love with the first day I pulled into town and I knew this is where I wanted to live and retire. Not any more. I’m doing my time until retirement then getting the hell out of here. I’m not priced out just yet….but I’m pretty close.  

    • heartless May 1, 2018 (12:25 pm)

      Yeah, I took issue with your earlier post (see above), but I agree with you here.  I also feel that nowadays–more so than in the past–people run for office for ulterior motives.  Maybe not just for the perks (not actually sure how many of those there are–maybe lots, I really just don’t know) but to climb a ladder to different public offices/sweeter gigs.

      I’m sorry you’re feeling disillusioned with Seattle, and I hope that if you want to stay you are able–and if you want to leave you leave for somewhere lovely.

  • Karen May 1, 2018 (1:22 pm)

    Been here 70+ years,  Disappointed and stressed.  And angry.

Sorry, comment time is over.