The Seattle City Council is poised to pass a payroll expense tax package to fund Covid-19 relief and affordable housing at its 2pm meeting today. Dubbed JumpStart Seattle, the legislation passed budget committee on Wednesday on a 7-2 vote with Councilmembers Alex Pedersen and Debora Juarez the nays.
Authored by Budget Chair Teresa Mosqueda, JumpStart Seattle would raise an estimated $245 million per year from the largest companies in Seattle. The payroll expense tax kicks in at $7 million in revenue, but only affects salaries above $150,000. The tax has another heightened tier for companies with $1 billion in revenue, which may only include Amazon.
The budget committee considered a long slate of amendments, many of which didn’t go anywhere. One that did was Councilmember Kshama Sawant’s amendment to get rid of the 10-year sunset clause. Councilmembers discussed the possibility that the state or county would come through with progressive revenue and Seattle may want to reassess its tax. But rather than losing the tax automatically at a certain date or if a countywide of statewide tax is passed, the majority preferred to leave that decision to a future council. Councilmember Alex Pedersen advocated for not just keeping the sunset clause, but shortening it to four years–he was outvoted.
Councilmember Sawant did not shy away from the gravity of the moment in her comments Wednesday. “The legitimacy of the status quo has absolutely been smashed,” she said. “Jeff Bezos, we’re coming for you.” She credited the Tax Amazon movement for laying the groundwork for Mosqueda’s tax and keeping the pressure on to pass it.
While Sawant’s rhetoric might sound a little over the top, Amazon’s entry into Seattle politics over the last couple of elections has clearly been motivated by a desire to squash tax efforts. The 2018 head tax–which would have raised about $47 million per year–was repealed after Amazon and other corporations bankrolled a signature gathering effort and started building a warchest for the next election. The Seattle City Council having just passed the tax unanimously, backed away with only Sawant and Mosqueda voting against repeal.
Pundits talked of a conservative swing in Seattle politics, but then progressive council candidates cleaned up in the 2019 election despite massive spending by Amazon and other corporations that donate to the Seattle Metropolitan Chamber of Commerce’s political action committee. Only Alex Pedersen sneaked through with Amazon’s backing.
Now with a $245 million tax that is fives times larger than the head tax, it will hit Amazon more deeply. The onset of the Covid pandemic increased the urgency of passing new revenue as unemployment spiked and a dip in sales tax revenues blew a hole in the City’s budget. Where Seattle used to seem shy about taxing the corporate behemoths fueling its growth, it now seems inevitable with other revenue options so limited and the need so great. As protests in favor of redistributing police funding to social services in Black and Brown communities drag into their sixth week, Seattle has rarely been more mobilized demanding progressive change. Amazon and the Chamber’s victory in 2018 appears to have been a pyrrhic one.
Despite all his attempts to water down JumpStart Seattle legislation in budget committee, Councilmember Pedersen said he still reserves the right to change his mind and vote for the legislation at final passage. Advocacy groups like Seattle Transit Riders Union (TRU) urged people to contact their councilmembers to strive for a unanimous vote. Pedersen’s office emailed out a very short survey on the tax to gauge support in District 4. TRU asked District 4 residents to fill out the survey and District 5 residents to email Councilmember Juarez.
Whether unanimous or not, expect the Seattle Council to pass JumpStart Seattle today and move on to grappling with the police budget and increasing upon the small 5% cut Mayor Jenny Durkan proposed. Councilmember Andrew Lewis also has a capital gains tax proposal that would raise another $37 million per year for affordable housing. We’re just getting started.