This spring Rachel Smith, CEO of the Seattle Metropolitan Chamber of Commerce, attempted to derail the City's effort to impose more taxes on corporations and the wealthy—and fewer on poor people—in anticipation of a $200 million budget shortfall in 2025. She said she feels “discomfortable” reviewing new taxes without also discussing budget cuts in her position on a workgroup designed specifically to find new, progressive revenue streams to balance the budget and pay for more programs.
The City invited the Chamber to the Progressive Revenue Stabilization Workgroup last October, hopeful that involving Smith in the infamous Seattle Process would avoid a repeat of the Chamber’s temper tantrum that ultimately killed the head tax in 2018. While thought to be an ally in the quest for progressive revenue, the Chamber seems to be operating in its own self-interest—preserving profit of employers, even at the expense of the public's growing needs.
"Budgeting is not doing the same things you have always done, at the same levels, and then adding to it. Budgeting is responding to what’s happening in our community now. While the basic functions of garbage and roads don’t change, our priorities do change," she told The Stranger.
If the workgroup fails their mission to get the Chamber to support their tax recommendations, the City may run into a public fight after all. In which case, pro-tax council members will need uncharacteristic political will to pass any of the proposed revenue streams ahead of a possible takeover of new business-friendly council members after the election this fall.
Still, even as Smith calls for tax breaks, budget cuts, and delays to the workgroup’s already late report, task force co-chair Council Member Teresa Mosqueda said she’s still glad to have a wide range of perspectives at the table.
“It's obviously tough conversations, right?” Mosqueda said in a phone interview with The Stranger. “But the charge of the task force is clear. I'm still optimistic that we're going to be able to see some form of actionable items as a result of these really good conversations we've been having.”
The Mayor did not respond to request for comment.
In an email to The Stranger, Smith said the Chamber initially joined the workgroup to represent the business community, which pays more than 60% of the taxes that make up the city’s general fund, daylight budget concerns, and help out since Smith says business is “good at this” type of financial thinking. She said she accepted the invitation “with good intentions and without pre-determined outcomes.”
Smith reiterated what she told The Stranger when the Mayor and Mosqueda first announced their joint workgroup in October. She hopes the conversation would not “devolve into who is pro-tax and who is anti-tax.” She noted that the Chamber has supported taxes in the past, including the property tax to pay for crisis care centers. She would not comment on what potential taxes she or the Chamber would support in this instance.
However, Smith made her tax hesitancy very clear in March, when the Chamber, the Downtown Seattle Association, and the Commercial Real Estate Development Association made a public request for a three-year break from the budget-saving JumpStart Payroll tax. The business powers argued that the big businesses' JumpStart targets need time to recover so they could continue to bring in tax revenue for the City and avoid a cliff in the coming years.
According to emails The Stranger received in a public records request, Smith brought that anti-tax sentiment to the task force. In an April 3 email, Smith called to totally re-scope the workgroup.
“And this is not a value judgement; we simply believe that we should not be having a conversation about increasing or adding new revenues until a broader conversation has been had,” Smith wrote.
Instead of talking about new taxes, Smith suggested the group first consider smoothing out inefficiencies, unrestricting earmarked funds, and making cuts to the City’s “unsustainable” spending. She also called back to the Chamber’s argument that new and even existing taxes harm businesses, which inhibits their ability to produce the tax revenue the City relies on.
She even prepared a slideshow breaking down the City budget and showing that general fund revenue has increased year after year. In the slideshow, the Chamber also included its poll in partnership with EMC Research. They reported 57% of Seattle voters believe taxes are “too high for what they are getting” as though voters' general feelings about taxes, which are largely regressive and burdensome to individuals, speak to their opinions on making big business pick up the tab. The Chamber also reported that 73% of voters do not trust the City to spend their tax dollars wisely.
Smith did not comment on where she would make cuts if the task force decided the City does not need more revenue.
In a subsequent email, task force member and General Secretary of the Transit Riders Union Katie Wilson reminded Smith that the workgroup is tasked with assessing new revenue options, not questioning if there’s a need for new revenue in the first place.
“If specific members aren’t on board with the mandate of the workgroup, perhaps they should recuse themselves and just weigh in during the ensuing public debate,” Wilson wrote in an email The Stranger received in a public records request.
Smith told The Stranger this week that she believes “it is too important to sit this conversation out—the city’s budget matters to all of us and we need to be at the table.”
Mosqueda said the task force did not view the Chamber’s presentation in a meeting. She also said that Smith’s budget concerns will be discussed at length in a “robust” budget process this fall.
I Am Once Again Asking You to Consider NOT Taxing Us
On May 24, Smith asked once again for the co-chairs to reconsider the scope of the discussion to include reviewing the budget, assessing financial risk, and strategizing to generate economic activity.
She wrote, “It feels less effective and out of alignment with the voters to have a workgroup that is exclusively looking at raising taxes.” Again, that is what she signed up for.
Finally, Smith asked that the co-chairs postpone the workgroup until the City staff studies her concerns.
Mosqueda said the workgroup’s delays have nothing to do with Smith’s request. The original goal to produce a report by the second quarter of the year ended up being a little ambitious. The group is now meeting more often so they can give recommendations to the council by the first week of August.
Mosqueda does not yet know how the workgroup will decide what tax recommendations they submit to the council, so it is unclear how much the Chamber will be able to water down the final recommendations if Smith is the only tax-hesitant member. Still, if the workgroup fails to get the buy-in Mosqueda and the Mayor’s office initially sought, the Chamber might just throw a temper tantrum once the proposals go public anyway.