A packed council chambers.
A packed council chambers for today's head tax hearing. SH

Seattle City Council members voted to advance a head tax proposal that Mayor Jenny Durkan has criticized as too costly for businesses.

Under the plan, businesses grossing more than $20 million annually would be subject to a $500 tax per employee. The tax is estimated to bring in $75 million of new revenue every year to fund housing and homelessness services.

Durkan favored a smaller proposal that would have taxed the same businesses $250 per employee and raise about $37.5 million of annual revenue.

Council members rejected Durkan’s preferred tax 5 to 4, electing instead to pass the $75 million proposal out of the Neighborhoods and Finance Committee. A full council vote on the head tax is scheduled for Monday.

What happens next is anybody’s guess. If the council votes the same way on Monday, then the big question is whether Durkan will veto the legislation. She sent out a statement shortly after the vote expressing her disapproval.

"I spent the morning with hundreds of women attending a career fair for women in the building trades," Durkan said. "Unfortunately, the bill that passed out of committee hurts workers by stopping these good jobs, so I cannot support it."

Another possibility is that one of the council members who voted against the proposal today has a change of heart over the weekend. That would give the $75 million head tax the six votes it needs to withstand a mayoral veto.

Council members who rejected the Durkan proposal said it did not generate enough revenue to address the region’s homelessness crisis.

"$250 in my mind is simply not going to create the appreciable difference we need to see in this area," González said, explaining her vote. "An appreciable difference is not just seeing less tents ... but actually reducing the level of human suffering outside this building right now."

Multiple council members alluded to a report commissioned by the Seattle Metropolitan Chamber of Commerce stating that King County needs an additional $164 to $214 million to meet the region’s needs, with most of that money going towards affordable housing.

Durkan’s proposal would raise enough revenue to fund roughly 250 new affordable housing units over five years, according to a spending plan attached to the failed legislation.

The council bill that passed out of committee today, meanwhile, would generate enough money to pay for 1,780 new units over the same time period. Even that isn’t on pace to meet the 10,000 new low income units the Housing Develop Consortium says Seattle needs over the next 10 years.

Council members who favored Durkan's plan said that the $500 per employee figure could scare businesses away from Seattle and that other cities in the region should kick in more money towards the homelessness crisis.

"People are coming to the city because of jobs. It is as simple as that. Probably only in Seattle could a proposal to tax jobs at $250 jobs a head be seen as conservative," Harrell said.

Council members also rejected an amendment from the head tax co-sponsors that would've reduced the rate from $500 per employee to $350, an attempt at a compromise. Sawant voted against the amendment alongside the four council members who favored Durkan's proposal.

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During a public comment session before the vote, people spoke overwhelmingly in favor of the $75 million proposal, marking a contrast to a previous meeting in which construction workers flooded the room with anti-head tax signs.

Several commenters called the smaller head tax proposal a "Durkan-Bezos deal," alluding to Amazon CEO Jeff Bezos. Last week, Amazon halted construction on a downtown office building and considered subleasing another building the company plans to occupy pending the city council's head tax vote. About 7,000 jobs were on the line. Monty Anderson, the executive secretary of the Seattle Building Trades Union, told the Seattle Times that the company would hit unpause if the council approved Durkan's plan.

During the campaign season, a political group supporting Durkan for mayor accepted $350,000 from Amazon.