Major Seattle Business Group Backs County-Level Tax to Address Homelessness ― With Conditions

February 3, 2020By Bill Conroy

Image Credit: 
Gene Faught
Image Credit: Gene Faught

The business group weighs in on recently introduced state legislation that would authorize King County to tax large companies with highly paid workers

State legislation introduced in Olympia recently that would allow King County to raise up to $120 million annually from businesses with highly compensated workers to pay for services and housing for the homeless has garnered the backing, with some stipulations, of a major Seattle business organization: the Downtown Seattle Association (DSA).

House Bill 2907, now pending in the Washington State Legislature, calls for allowing counties with populations of 2 million or more, which narrows the field to King County, to impose a 0.1% to 0.2% tax on companies total payroll for employees making $150,000 or more per year, with some exemptions carved out for small companies and grocery businesses.

“In 2018, DSA opposed legislation adopted by the Seattle City Council to tax jobs and led the effort to repeal the legislation,” the DSA said in a statement announcing its conditional support of the proposed state legislation. “We opposed Seattle’s jobs tax for several reasons: It lacked a detailed spending and accountability plan; was to be levied only in Seattle ― potentially putting our city at an economic disadvantage in the region; didn’t include investment in treatment, job training and shelter; and would have impacted low-margin companies and low-wage workers.”

The DSA adds, however, that since 2018, the city of Seattle and King County have made noteworthy progress on the issue of homelessness by establishing a Regional Homelessness Authority “to centralize the responsibility and accountability for reducing homelessness in our community.” With that in mind, DSA’s board of directors says it will support a countywide tax and homelessness investment plan if it adheres to standards that include the following:

  • The tax may be based on employment/payroll (not on total jobs) and include a progressive application and protection of small businesses, grocery businesses and lower/medium-wage employment.

    * In a county using this tax, similar local (city) taxes are preempted.

    * An annual spending plan be required, with oversight by The King County Regional Homelessness Authority.

    * Spending is restricted to permanent supportive housing, enhanced shelter, behavioral health care, job training and transition employment programs.

    * Programs must center the voice of the consumer (community members who have lived experience) and address race disparity by adopting anti-racist policies.

    * Semi-annual reporting be required, including progress on specific metrics.

    * All reports and audits are to be available to the public on the county website. 

House Bill 2907 has been referred to the House Finance Committee. It has already garnered support from King County Executive Dow Constantine and Seattle Mayor Jenny Durkan ― although at this point no Republicans in Olympia have agreed to co-sponsor the bill.

“Today, the scale of the homelessness emergency we face requires everyone to do more in order to provide for those who have the least among us,” DSA says. “Together, we must increase low-income housing and expand effective programs to help our neighbors who are homeless, including individuals sleeping on the streets of downtown and those struggling with mental illness and substance-use disorder.”