Amazon, Seattle Employers Face New Tax to Curb Homelessness

Seattle City Council Passes $45 Million Head Tax Compromise

Starbucks and Amazon are now blasting the decision to slap a new "head tax" on businesses to pay for homeless services and affordable housing - saying the government's own lack of efficiency is to blame for the city's woes.

However, with Mayor Jenny Durkan threatening to veto the tax because she was concerned about its impact on employment, the measure had to be watered down to pass. The city council eventually passed a smaller tax, $275 per employee, and included a sunset provision.

A spending plan under consideration by the council calls for spending 66 percent of the new money on affordable housing, 32 percent on emergency shelter, trash pickup, raises for service workers and other needs and 2 percent on administration. That original compromise was voted down Friday.

Schoesler (R-Ritzville) drafted a bill that says cities do not have the "constitutional authority" to levy such a tax. Especially as more companies look elsewhere for talent, cities need to remember that building an attractive place for businesses is a marathon, not a sprint. The company did not comment on the new compromise when GeekWire asked ahead of Monday's meeting.

I'm skeptical that a $10 million per year tax is going to have a meaningful impact on where Amazon, a company that generated almost $178 billion in sales last year, chooses to hire.

The head tax has ignited something of an existential debate for Seattle over its monumental growth.

Seattle City Council Passes $45 Million Head Tax Compromise

Amazon criticized the new tax in a blistering statement from vice president Drew Herdener. "If we had a weaker movement, we could have won less or even nothing".

Underlying all of this is the fact that Seattle really does have a serious problem with homelessness, one that is driving even some long-time residents away from the city. The e-commerce giant paused construction on one of its office towers and said it is reconsidering occupying another.

Monty Anderson, executive secretary of the Seattle Building Trades Union, said on the phone earlier today that Amazon will likely give the green light to continue construction of their downtown building after today's vote. He stressed one of his city's key pillars, "Bellevue is open for business" but expressed concern over the message the tax sends about the broader Seattle metropolitan region. "We are fighting everywhere, '" Sawant said. "We have a lot more work to do". So far, mayors in other cities competing for HQ2, as the project is sometimes called, have taken a wait-and-see approach. Seattle reportedly has the third-largest concentration of homeless people in the United States.

"This legislation will help us address our homelessness crisis without jeopardizing critical jobs", Durkan said.

From next year any firm earning more than $20million per year will be asked to pay up with Amazon - which employs 45,000 people - shouldering the largest burden. The Seattle region had the third-highest number of homeless people in the United States in 2017.

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