Good afternoon and welcome to another episode of Everyone In Seattle Is Feeling Very Weird that They Have to Disagree with Each Other in Public!
As part of the ongoing budget process, Seattle City Council members are continuing to debate a new tax on large businesses. At a briefing Monday morning, council members introduced new criticisms of the proposal, questioned each other's motivations, and made accusations of "intellectual bullying."
To recap: The so-called head tax or HOMES Tax would charge businesses that gross more than $5 million per year 5 cents per employee per hour. The proposed tax is projected to raise about $20 million to $25 million a year. That money, combined with possible bonding against that tax revenue, would fund affordable housing, homeless shelters, and an expansion of the diversion program LEAD. UPDATE: Council Member Lisa Herbold, who chairs the budget committee, now says her latest version of the tax proposal would affect businesses grossing $10 million instead of $5 million and would charge 6.5 cents per hour instead of 5 cents.
While nearly every council member has championed one anti-homelessness effort or another, they've clashed on whether a business tax is the right way to bring in more money for the current crisis. The council members advocating for the tax—Lisa Herbold, Mike O'Brien, Kirsten Harris-Talley, and Kshama Sawant—stress that it would affect only the top 10 percent of businesses. Other council members have said they worry it could affect small businesses with high gross revenues but slim profit margins. Some council members have also said they should bring business to the table before taxing them. (To address the small business concern, the coalition advocating for the tax may support increasing that $5 million threshold if the per-employee tax was also increased so the amount of money raised was the same, said Transit Riders Union General Secretary Katie Wilson. The TRU, along with many other organizations, supports the tax.)
In a council briefing Monday, a new criticism of the tax emerged when Council Member Lorena González questioned the types of housing the money would fund. This was a shift for González, who previously said she was worried about small businesses who might be hit by the tax.
In advocating for the tax, O'Brien has said officials in Seattle's Office of Housing have projects they want to fund but can't without more money. The Office of Housing works with affordable housing developers to build rent-restricted apartment buildings. But the office doesn't only fund projects for people living on the streets right now. If the head tax passed and sent more money to that office, it would also help fund housing for people making 30, 50, and 60 percent of area median income.
González suggested that the messaging around the HOMES tax revenue has been misleading."This HOMES tax being discussed with me and in public as a clear strategy to lift people who are living outside...to help them come inside," González said. "I want to make sure anything I vote for is going to do that, not next year, not in three months, not in four months, not this sort of mishmash of maybe this is a way to do rent control, maybe this is a way to control the rental market. I want to see numbers and clear commitment that what we are voting on through this budget process is going to bring 3,000 people inside immediately. And I'm not going to support a plan that pretends to do that but doesn't deliver on that result."
A couple of things stand about this argument, most notably that officials in all corners of city hall have spent the last year talking ad nauseam about the need to fund housing, not just shelter. This story lays out the complex reasons Seattle has trouble transitioning people out of emergency shelters, including the difficulty of finding permanent affordable housing. For experts who’ve studied this problem for a very long time, more housing is a necessary piece of the solution. O'Brien also acknowledged to González that $20 million will not shelter 3,000 people immediately and that the spending plan for the tax is intentionally focused on housing, not just shelter.
O'Brien also defended housing for slightly higher incomes. He said building housing for people with 50 or 60 percent AMI allows people who were formerly very low income to eventually move into those units once they have more income. Then the 30 percent AMI units they were previously living in are open for currently homeless people. Affordable housing also helps people who may have housing now but are on the verge of becoming homeless, O'Brien argued.
"If the goal were to say, I want to get in the next few months thousands of people indoors, then we would want to shift significantly to be focused on emergency shelter beds," O'Brien said. "The challenge is trying to come up with a balance."
"We've also talked at length that longterm the investment [should be] more affordable housing," O'Brien added later. "I continue to believe that we have a significant shortage."
Things got more personal between González and Sawant.
Sawant basically accused her colleagues of opposing the tax to appease business interests. "If council members are wanting to vote no on the HOMES tax because their corporate sponsors like the Chamber of Commerce are opposed to it," Sawant said, "then I think those arguments should be honestly made as opposed to saying, 'Well if these homes are not going directly to people who are homeless today then that's not a good enough case to be made.'"
Sawant linked rising rents and increasing homelessness. That connection, she argued, bolsters "the argument for making publicly available rent stable housing units as a part of the prevention of homelessness and addressing homelessness."
"There have been some concerning remarks made by Council Member Sawant," González responded, "that somehow because I'm asking questions about how many of these units are going to go to actually bringing people who are living outside inside is somehow motivated by some ill will against the very people I'm asking questions about to seek to help. I just categorically deny that. It's not true."
Council Member Debora Juarez claimed supporters of the head tax have rushed the proposal and said she is being "intellectually bullied."
"I do not mean to cast any [aspersions] or impugn any of my colleagues' character, but this is what happens when you dump a major piece of legislation 12 days into budget," Juarez said. "We have had no opportunity to see spreadsheets. I don't have any hard numbers about how many unsheltered human beings, if we pass this, are going to physically be sheltered."
"It doesn't mean I'm in the back pocket of business," Juarez added. "It doesn't mean I'm in the back pocket of corporate America or that I don't care about homelessness or I'm in the back pocket of slumlords."
Juarez called for more time to consider and debate the tax. She co-sponsored a proposal to form a task force to consider a head tax. "Instead what I get is, 'you're either with us or you're against us.' To me, that is not consensus. It's not being leaders. It is mainly, to some degree, being bullies and being intellectually bullied and being attacked because somehow if you're not for us you're against us."
Businesses also claim they face "the threat of bullying."
A letter signed by about 90 restaurant, hotel, and other business owners calls the tax "a new, hastily proposed tax coupled with finger-pointing and tired political rhetoric."
"Those of us who have taken the time out of our work days to attempt to testify and express our point of view in Council Chambers have either been shouted down or found the public comment period shortened or rescheduled," the letter reads. "We want to speak, but the threat of bullying or the fear of wasting time, does not give us confidence that you are interested in listening."
Meanwhile, O'Brien shared this letter signed by advocates for people experiencing homelessness, the Seattle Peoples Party, former state rep and mayoral candidate Jessyn Farrell, the small business group Main Street Alliance of Washington, and others. That letter advocates for both the head tax and another proposal for new regulations and per-night taxes on short-term rentals like Airbnb.
"We need to take bold and creative action for those most vulnerable to losing their homes and communities," it says.
The council will continue debating the tax this week as they consider amendments to the budget. Advocates supporting the tax spoke at today's 2 pm full council meeting. Council members plan to take committee votes on changes to the budget tomorrow and Wednesday and to vote on the full budget Monday, November 20.