Seattle City Council Member Kshama Sawant says she's found a way the city can generate $2 million a year in new money and make investment managers pay.
As part of the council's ongoing budget negotiations, Sawant has proposed increasing taxes on international investment management services, which currently pay less in city business license taxes than any other type of business.
City law defines "international investment management services" as investment managers who get at least 10 percent of their income from managing funds based outside the United States. It includes mutual funds and investment funds used for employee benefits and charitable trusts.
The council created the lower rates for those firms in 2009 in an effort to lure Tacoma-based Russell Investments to Seattle.
According to city budget documents, these firms are set to pay .153 percent in city business licensing taxes next year. Sawant's proposal would increase that to .423 percent, which council staff say would raise about $2 million. Sawant has not yet offered a specific proposal for how to spend that money, but a staffer in her office compared the $2 million to a $500,000 request from the Tenants Union of Washington State and an $875,000 program for survivors of domestic violence. Sawant is likely to request increased funding for those types of programs, as well as homelessness services, in the budget.
The council will discuss Sawant's idea—and a bunch of others, including Sawant's proposal to build affordable housing with money previously set aside for a new police precinct in north Seattle—at a budget meeting today. The meeting started at 10:30 am and will continue into the afternoon. It's live-streaming here and I'm tweeting here.