Over the weekend, Mayor Jenny Durkan signaled in a letter to the Seattle City Clerk that she would not be vetoing Councilmember Teresa Mosqueda's JumpStart Seattle tax plan, which the Seattle City Council passed 7-2 on July 6. However, she wouldn't be signing it, either. Instead, she'll passively let it become law, given the council's veto-proof majority. Durkan indicated that she'll be taking the same approach with the spending plan the council deliberated today, three days before they're scheduled to vote on it.
In a letter, Council President Lorena Gonzalez said she's concerned Durkan's strategy seeks "to publicly discredit the City Council's legislative process and our collective judgment to pass this local progressive revenue measure."
However, the specter of mayoral intervention or, perhaps worse, inaction, loomed over the meeting.
The payroll tax, which will raise more than $200 million annually, will tax high compensation of companies who report more than $7 million in annual payroll.
The tax itself won't take effect until 2021, but immediate COVID-19 relief approved today will start this year. That relief will be funded by borrowing $86 million from the city's emergency funds, which the tax will replenish next year. In the longterm, the tax will fund affordable housing construction, sustainable infrastructure, and small business assistance.
Swift action on COVID-19 relief is important, Mosqueda pointed out, as rental payments stack up and the federal government continues to dilly-dally on providing more unemployment benefits or another round of stimulus checks for those impacted by the pandemic. The city's relief will be especially critical for undocumented residents who are ineligible for unemployment and federal benefits, Mosqueda added.
Baked into that relief is $18.1 million in small business assistance and $31.6 million to beef up the city's existing grocery voucher program. There's also $36 million for rental assistance, resources for homeless shelters and affordable housing providers, and mortgage counseling and foreclosure prevention.
Councilmember Dan Strauss proposed an amendment to increase the number of small businesses eligible for grants, which passed 5-4. Councilmembers Tammy Morales, Kshama Sawant, Lisa Herbold, and Gonzalez voted against it. Before, only businesses with 10 or fewer employees were eligible for grants, but Strauss's amendment allows businesses with up to 25 full-time equivalents to be eligible for the grant. The no-voters expressed concerns that this change will widen the pool for these limited grants and may steer them away from businesses owned by people of color.
While it was a historic moment to actually outline a detailed spending plan for a progressive business payroll tax in Seattle (pour one out for the business taxes of Seattle past), council members sounded a sour note, as they didn't seem convinced Durkan would make these bills a reality. "We can't force the executive to spend [these dollars,]" Gonzalez said.
Durkan has made it clear that she does not support a business payroll tax. She has proposed a citywide 1 percent income tax, instead. But that doesn't fix the main issue here—Seattle's ass-backward, upside down tax system.
Under Durkan's hypothetical plan (there is no legislation for her income tax proposal, even though she uses it as her defense against JumpStart Seattle), low-income residents would pay the same percentage on their wages as high-earners. Mosqueda said she's had multiple conversations with Durkan where she has made it "clear that it would be irresponsible to implement a flat income tax without a rebate for our most vulnerable citizens."
Durkan and critics of JumpStart Seattle also claim that the tax should be done at the county or state level. Mosqueda, Morales, and Gonzalez argued that these governmental bodies have already tried to do that. Most recently, the bill Mosqueda modeled JumpStart Seattle after failed last session in Olympia. These politicians who have been in office for 20 years haven't passed this, Morales said, and she has no confidence they'd get it done now.
Gonzalez said waiting for another legislative entity to swoop in and "rescue us" was "kicking the can down the road." On the council's end, however, there has been "bold action," Gonzalez said. Unfortunately, the fate of that action is now in Durkan's hands.
"The mayor has not committed to getting COVID relief out the door, which is critical," Mosqueda said, "The critical effort for us all is to make sure the mayor allocates these COVID relief dollars as specified in this law, because any delay would mean consequences for the health and recovery of our city that would be dire."
Mosqueda continued: "It would be a dereliction of duties not to get this out. And by definition a dereliction of duties means a shameful failure to not fulfill one's obligation. It is our obligation to provide immediate relief right now. It is our obligation to provide immediate relief right now."
Pinning potential inaction as a "dereliction of duties" is strategic on Mosqueda's part. Durkan is facing a potential recall vote by popular demand that's currently being decided in a King County Superior Court.
Three Democrat legislative districts in the Seattle area have also passed resolutions calling for Durkan to resign. Those resolutions urge the council to step in and impeach Durkan if she doesn't bow out. Considering she brushed the resolutions off as an attack from Sawant (who is a socialist and not involved with these groups), it's not looking likely that she'll bow out on her own. However, if more council members believe her actions are styming progress in the city—or are a dereliction of duties—there could be a path toward impeachment. At least six council members would have to vote for impeachment.