Tag: Amazon

Council Members Talk Amazon in NYC: “Don’t Flinch Every Time a Corporation Flexes Its Muscles”

This story originally appeared on Seattle magazine’s website.

File:Long Island City New York May 2015 panorama 3.jpg
Image via King of Hearts; Creative Commons license

As New York City braces itself against the potential “Seattleization” of Long Island City, Queens, where Amazon recently announced it will build one of two satellite “HQ2”s, two Seattle City councilmembers arrived in New York City Monday morning with a dual message: It’s going to be every bit as bad as you imagined. And: There’s still time to prepare.

Councilmembers Teresa Mosqueda and Lisa Herbold spoke at the headquarters of the Retail, Wholesale and Department Store Union (RWDSU) Monday morning, following a succession of local elected officials and progressive activists who denounced the company. (RWDSU president Stuart Applebaum, for example, described Amazon as “one of the worst employers not just in the United States but anywhere in the world.”)

Herbold read a letter from an Amazon contractor who described a desperate, daily scramble for shifts in a job with no benefits, no job security, and no health care—just an 800 number staffed by a nurse who “will tell you to see a doctor that you can’t afford.” Her advice for New Yorkers who want to extract some benefits from Amazon, which will receive an estimated $3 billion in tax breaks for the project? Mobilize early, align with small businesses, and be prepared for Amazon to try to change the conversation.

“We simply weren’t able to counter the influence of big money on public opinion” in Seattle, Herbold said, referring to the failure of the city’s $275-per-employee “head tax,” which would have funded housing and homeless services. “In Seattle, Amazon used small businesses as a stalking horse. … You have to remind small businesses that they, too, are victims of regressive tax structures.”

After telling Seattle leaders  they would support a scaled back “compromise” version of the tax, Amazon helped fund the “No Tax on Jobs” campaign, which planned to run a referendum to overturn the measure. Eventually, the council voted to overturn the tax, with Herbold voting with the majority and Mosqueda voting no.

Mosqueda offered the head tax experience as a cautionary tale, and warned the New York activists, “Don’t be the city or the state that flinches every time a corporation flexes its muscles, threatens to move out of town, tries to say that they’re going to cut jobs or stop construction, and pulls back on investing on the very system and infrastructure that they refuse to pay into.” Amazon’s outsize presence in Seattle, Mosqueda said, has “had a dramatic impact on who can afford to live in the city,” contributing to homelessness, gentrification, and “people not being able to keep the homes that they grew up in.”

Finally, Herbold cautioned that activists should brace themselves for Amazon and its supporters to suggest that private philanthropists, not the government, should be responsible for creating an adequate social safety net. Herbold recalled that when she wrote an open letter to Amazon CEO Jeff Bezos, asking him to participate in a national conversation about how to meet workers’ basic needs in the “gig economy.” The response, she said Monday, was “basically [that we need] more philanthropy.”

“We are in a modern Gilded Era,” Herbold said. “There is no accountability for private philanthropy, and charitable gifts don’t solve infrastructure issues or inequality.”

The J Is for Judge: Trump Would Feel Right At Home In Anti-Amazon Seattle

If, as they say, the enemy of your enemy is your friend, Donald Trump is Seattle lefties’ besty.

Just as many Seattle progressives cast Amazon as a bogeyman during debates over affordability and the city’s “character,” Trump routinely directs his Twitter ire at Amazon and the company’s CEO Jeff Bezos.

Here’s a typical Trump tweet trashing Amazon from this spring:

Of course, like most of Trump’s Twitter testimony, these claims strain credulity.

But the crux of Trump’s sentiments are in sync with Seattle’s own animosity toward the the South Lake Union tech magnate. As the recent head tax debate showed, Seattle’s left—like Trump—doesn’t think Amazon pays enough in taxes. Seattle’s leftist City Council member Kshama Sawant has personally used Trumpian language to demonize Bezos, saying “Jeff Bezos is our enemy” at a city council meeting in June.  (That’s right—the Washington Post owner is an enemy of the people.) Activists in Seattle have taken up the anti-Amazon crusade. In fact ,the coffee shop where I’m writing this very column is currently selling anti-Bezos postcards that say “Rich Uncle Bezos” featuring a picture of the Amazon leader in a “Monopoly” top hat.

Echoing Trump’s line that the company is killing mom and pop businesses, conventional wisdom here in Seattle holds that Amazon, the engine of our hyper growth, is destroying Seattle’s homegrown culture and authenticity. For both Trump and Seattleites who believe the company is ruining the city, Amazon represents an existential threat. The fact that council member Sawant is now organizing rallies to save the Showbox from being replaced by a new housing and retail development is unmistakably part of the same reactionary sentiment that demonizes change, and Amazon transplants, as corrosive forces—these new Seattle residents aren’t neighbors but “Amazombies,” as I overheard someone quip at a bar last week.

I agree that Amazon should be a better corporate citizen; their resistance to paying higher taxes to help address the homelessness crisis displayed a callous lack of concern for a city that has invested heavily in their success. And their crass bad faith at the negotiating table during the head tax debate (turning around and making a $25,000 contribution to the campaign to kill the tax after apparently agreeing to a deal) was shameful. For the record, I supported the head tax. Without an income tax (something else I support), it’s our only option to mark the clear nexus that exists between Amazon’s growth and the housing crisis.

On the flip side: A report that Amazon pays an estimated $250 million in local and state taxes  highlights the real benefit of having a Top 10 Fortune 500 company (#8) based in downtown Seattle, with its 45,000 current Seattle employees, 50,000 new hires planned, and all the secondary and tertiary jobs they create.

The similarity between Seattle progressives who scapegoat Amazon as a corrupting influence and Trump’s populist tweet tantrums that accuse Amazon of cuckolding the feds (turning the Post Office into a mere “delivery boy” for the all-powerful Bezos) is worth calling out because it’s part a consistent, ugly defect we also see in Seattle populism.

As insightful Seattle City Council member Rob Johnson once pointed out: The intransigence of Seattle’s largely white, single-family homeowners who oppose allowing more access to their neighborhoods is similar to the heated provincialism of Trump’s pro-wall base. Johnson, an even-keeled mass transit and density advocate, is now on his heels against an onslaught from angry single-family neighborhood constituents. And so it goes in Seattle, where the current strain of parochial leftism isn’t out of place in Trump’s America.

Looking for Common Ground Between Anti-Tax and Pro-Housing Advocates

During the overheated debate about the head tax—a tax on high-grossing businesses that would have funded housing and services for Seattle’s homeless population—it was easy to see the overlap between neighborhood groups that opposed the head tax and neighborhood groups that oppose zoning changes on the grounds that density will ruin the “character” of their exclusive single-family neighborhoods. Anxiety about visible homelessness and anxiety about visible renters often takes a similar tone: Spending on homelessness will encourage more of “those” people to come to Seattle, and allowing triplexes or apartment buildings in single-family areas will allow more of “those” people to live in “our” neighborhood. As SEIU 775 president David Rolf told the Seattle Times , the companies that funded the head tax repeal campaign “targeted conservative voters, residents who miss old Seattle and people upset over street camping, among others. ‘They figured out how to knit those groups together[.]'”

At the same time, I noticed a surprising counter-trend among some head tax opponents: While they expressed many of the same reasons as traditional neighborhood activists for opposing the tax (bad for business, the city needs to show progress before we give it more money, and so forth), they also argued that the city should open up its restrictive zoning codes to allow more housing in all parts of the city—an idea that’s anathema to most traditional neighborhood groups. (The first time I heard this argument, as it happened, was during an over-the-top vitriolic town hall meeting in Ballard, from a guy who kept screaming directly in my ear, “NO HEAD TAX! CHANGE THE ZONING!”) This is an argument you hear all the time from urbanists and YIMBYs—who, generally speaking, support policies that encourage more housing at every income level—but I’d never heard it coming to someone who opposed a tax that would have paid for housing. I wondered: Could this be a rare area of common ground between anti-tax and pro-housing advocates?

So I put a call out on Twitter, asking people to contact me if they opposed the head tax and supported reducing restrictions on where housing could be built in Seattle. Quite a few people got back to me, and I had a number of interesting offline conversations from people who didn’t want to be quoted, but who gave me some hope that even in the absence of new revenues to address our current crisis (revenues, I should add, that I still think are desperately needed), progress is still possible.  This isn’t data—the people who responded, all men, represent a tiny, self-selected slice of the larger group of Seattle residents who oppose the head tax and support density—but it is an interesting look at why at least some people who opposed this specific tax are open to other solutions, and why increased density might be an area where people on both sides of the head tax issue can agree.

“Deliberately Divisive”

Mark (not his real name) is a thirtysomething tech worker and longtime Seattle resident who lives on Capitol Hill. He considers himself socially liberal and fiscally conservative—the kind of person who votes for taxes if he thinks they will make an actual, measurable dent in solving the problem they’re supposed to solve. Mark says he opposed the head tax because the spending plan for the tax failed to identify how it would address different homeless populations with different needs (people in active addiction or with debilitating mental illness will need different approaches than, say, someone who has just lost their job and is living in their car); because the city isn’t acknowledging or addressing the problems created by tent encampments; and because he doesn’t trust the city council, particularly Mike O’Brien and Kshama Sawant, to spend the money well.

“In my time as a Seattleite, I’ve never seen council members as deliberately divisive as those two, and they’ve fractured the council into a group of individuals who can’t actually accomplish anything. I miss folks like Tim Burgess and Nick Licata (and on the KCC side, Dow Constantine). I often disagreed with their opinions, but they were truly interested in talking with everyone and doing what was best for the city,” Mark says. He believes that O’Brien and Sawant “would rather fund an  ineffective solution than release information that reveals it’s ineffective, and continue to willfully ignore encampments as long as homelessness or even affordable housing hasn’t been solved.”

Mark says he would “love to see …  a significant city-wide upzone.” He believes 2015’s Housing Affordability and Livability Agenda, which recommended upzoning a tiny sliver of Seattle’s single-family areas, is “laughably inadequate” and that the “grand bargain,” in which developers agreed to pay into an affordable housing fund (or build affordable housing on site) in exchange for higher density, has failed. “The HALA Committee proposal left too much of the city untouched, and what was passed was a notch above nothing.” While it’s reasonable to debate the maximum height of buildings in different areas, he says, “What isn’t reasonable is the city acting like it’s still 1995 (and yes, I lived here then), nor using its own policies to protect certain groups at the expense of others. Just like it would be insane for the city to say ‘You can’t build a single family house here,’ it’s insane to say ‘You can’t build a multifamily building here.'”

“At some level, we need to acknowledge that not everyone who wants to live in Seattle is going to be able to afford it, let alone be able to afford a place they want to live in. I’d love for that threshold to be as low as we can practically make it; IMO, re-zoning is the single biggest impact we can make on that, followed by allowing smaller units (pods), and incredibly, both of those are free to do.”

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“There Is No Plan”

Neil, who owns a duplex and four-unit apartment building on Beacon Hill (and lives, with his wife, in one of the apartments), has worn a lot of hats in his life: Business owner, CPA, landlord—he even ran a “distressed fishing lodge” in Alaska for a number of years. An independent who mostly votes for Democrats, he says he has supported most of Seattle’s recurring tax levies, but voted against the most recent Sound Transit ballot measure “because of my frustration with recent governance in Seattle, and [because] the $50 billion price tag was too big to decipher.”

Neil says the main reason he opposed the head tax was because it was “too small,” because it applied only to a narrow group of businesses (those with gross receipts above $20 million a year), and because he did not have confidence that the city council and the progressive revenue task force that recommended the tax were starting with the right goals or had the right expertise for the job. “The annual tax raised by the original [head tax] proposal [during last year’s budget discussions] was $24 million, then it was $75 million but really needed to be $150 million but they settled with $47 million.  My observation: The council concentrates more on how much money they can generate rather than what is needed and how it will be used.  Whether real or perceived, it feeds the narrative of ‘there is no plan,'” he says. Additionally, he says, council members and advocates who campaigned for the head tax by vilifying Amazon were being “cynical and destructive to the well being of Seattle. … Good policy should stand on its own, at least in principle.”

Neil, unlike Mark, doesn’t support major citywide upzones; he thinks that allowing more attached and detached accessory dwelling units (backyard and basement apartments) in single-family areas, and implementing the HALA recommendations throughout the city, will do a lot to address the current housing shortage. “Personally, I am fine living in and amongst apartments,” he says.  “But my situation is unique and we are not surrounded by five-story buildings.  ADU[s and] DADU[s] seem to be low-impact personal housing alternatives. [They] also promote investment and vitality at a neighborhood level.”

“We Need WAY More Density”

Jeff, a software engineer who has lived in Seattle twice, for a total of about 15 years, owns a house in the Green Lake/Roosevelt area, on a block where two single-family homes are being torn down and replaced with larger single-family houses. He says that although he has consistently voted to raise taxes for housing, education, and transportation, he opposed the head tax because he “disliked the ‘stick it to the rich’ sentiments behind” it, and believes it punishes high-grossing, low-margin businesses, like grocery stores and restaurants. (Saul Spady, the grandson of Dick’s hamburger chain Dick Spady, made this argument in his PR campaign against the tax, for which his consulting firm was  paid at least $20,000).

Jeff believes that, had the head tax passed, companies might choose to locate in the suburbs, rather than in the city proper, working “against the trend towards a higher density city, which is the direction I think we should be moving in. ”

“I think we need WAY more density,” Jeff says. “Traffic sucks, but high density should make transit more viable and also means there are enough people within walking distances to support local businesses without driving.” In particular, he says he would support removing “almost all” restrictions on basement and backyard apartments in single-family areas, allowing row houses and triplexes in those areas, getting rid of parking mandates for new developments, and reducing restrictions on efficiency apartments and rooming houses, which “traditionally have provided housing for low-income people.”

“For those currently on the street, even building complexes of semi-permanent buildings with sanitary facilities and availability to drug treatment would be a step up,” Jeff says. “I don’t know the costs and also there are some that wouldn’t want to go there, but people setting up camp in the parks and on highway medians isn’t acceptable for them or for everyone else.” Locking people up when they refuse to go into shelter or treatment is too expensive, doesn’t work, and leads to a lifetime of misery, Jeff says. “We can offer people something pretty good for much less than the cost of prison.”

“Upzone Like Crazy”

Andrew is a longtime Seattle resident who lives in a townhouse in South Seattle and works in finance for a telecomm company in Factoria. He says he’s “definitely on the liberal end of the spectrum—he voted for Cary Moon in the primary and general elections last year—but he “tend[s[ not to support the kinds of solutions provided by Kshama Sawant or Nikkita Oliver that engage in class warfare at the expense of good, progressive policy.”

Andrew’s concern about the head tax stemmed from the fact that it “appeared largely to demonize Amazon despite its broad impact on large headcount businesses that don’t necessarily share Amazon’s profit structure. … It is not, generally speaking, the fault of business that the city has not absorbed its growing population or kept housing in check,” he says. Another problem with the head tax, he says, was that its spending plan would have gone all-in on building new housing (which can cost more than $300,000 a unit) instead of spending more on less-expensive solutions like services, diversion, treatment, and rent subsidies until housing supply can catch up with demand.

To that end, Andrew says, “the city needs to upzone like crazy. … I honestly see no reason why all of the single-family zones in the city shouldn’t be upzoned to” low-rise 2 or low-rise 3, which would allow townhouses and two- or three-story apartment buildings. “My townhome has earned as much money in appreciation as I have at my six-figure job in the two years we’ve lived here” thanks in no small part to Seattle’s housing shortage, he says. “This is ridiculous rent-seeking and I don’t need it, nor does any other homeowner who bought in the good old days”. I would rather see housing prices decline to 2010 levels in the city if it meant that everyone had a place to live.”

“In my ideal world, people would be prohibited from living on the street because we had ample shelter, services, care, and support to provide to them through official channels. Only then do we have the right to chase them from view.”

“A More Collaborative Process”

Ian, a city employee who lives in a four-bedroom house in North Seattle with his wife, two children, elderly in-laws, and a roommate, has always voted for every housing, education, and transportation levy, but says he has started considering such measures more carefully in recent years, given the rising cost of living in Seattle. He opposed the head tax because of its potential to cause what he calls “collateral damage”—impacts on companies other than Amazon and “Big Tech” firms that could have easily absorbed the cost of the $275-per-employee tax.

For example, Ian says, “I have a friend who’s a longtime Nucor employee; apparently his management told them point blank that if the tax had passed in its original ($500) form, the plant would close. That mill’s been here for over a century and is not part of the reason why housing and living costs have skyrocketed, so why ‘punish’ them and their employees? How many other businesses like that would meet a similar fate?” Ian says he was also concerned that grocery chains would have increased prices to offset the tax, which would have disproportionately impacted homeless and rent-burdened people. (This was a point hammered home by head tax opponents, who frequently argued that the cost of groceries would go up if the tax passed. Before the head tax was repealed, a phone survey asked Seattle residents whether they would be more or less likely to support the tax if they knew it would raise their grocery prices.)

Ian, like  Neil, believes the progressive revenue task force was the wrong approach; if the city wanted to come up with a tax that would enjoy wide support, he suggests, they should have created  “a more collaborative process, like what happened for the minimum wage increase. I thought it was weird that the Council didn’t pursue a similar strategy for the head tax, and cagey that the Council seemed to avoid talking about which specific business would actually be affected outside of the tech industry.” As I noted after Amazon and other big businesses launched their formal campaign to kill the head tax, former mayor Ed Murray took a much different approach to passing the $15 minimum wage, bringing reluctant businesses, labor groups, and activists to the table to hammer out a compromise everyone was willing to sign off on before rolling it out in a press conference that featured some of the same players who gave thousands of dollars to the anti-head tax campaign.

Ian supports “eliminating single family residential zoning in its current form” altogether, but adds, “I don’t think that the market will solve affordability by itself; having worked in private sector construction management, I know for a fact that it won’t. Developers primarily want to build more expensive housing for incoming tech workers and that’s not going to change any time soon. But zoning changes could still have a significant effect on availability and pricing.” This is the argument made by many urbanists, who point out that if developers can’t or don’t provide huge amounts of housing at the high end to accommodate the thousands of new workers who move to Seattle every year, they will be forced to compete for existing mid-range housing, driving up prices all the way down the line. And today’s high-end housing is tomorrow’s mid-range housing. Ian also supports “open[ing] up City-owned land for dedicated low-income housing development, to help more people on the edge keep from falling into homelessness.” A new law that just went into effect this month allows government agencies, including the city, to provide land to housing developers for free if it fulfills a public purpose; this could lead to more housing on public land, and will, in theory, create an incentive for the city to hang on to property it owns instead of selling it to the highest bidder for a one-time profit.

Scratching Your Head Over Today’s Head Tax Defeat? Here Are Some Answers.

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After a raucous, nearly two-and-a-half-hour special council meeting that concluded in a 7-2 vote to repeal a $275-per-employee tax on high-grossing businesses (read my live blow-by-blow here), both proponents and opponents of the head tax were asking: What’s next?

Mayor Jenny Durkan and all nine members of the city council approved the head tax, which was supposed to be a “compromise” between the city and Amazon (the company that would be most impacted by the measure), without coming up with a Plan B, either failing to anticipate or underestimating business and public opposition to the proposal. Not only does the city have to go back to the drawing board, the drawing board is pretty much a blank slate: After meeting for five months, a task force appointed to come up with progressive tax options landed on the head tax as the only viable alternative to regressive taxes like sales and property taxes. Seattle leaders point to the need for “regional solutions” to homelessness, but the only regional solution that has been put forward so far is a countywide sales tax, which went nowhere after King County Executive Dow Constantine proposed it last year. Meanwhile, a countywide task force called One Table, which was supposed to recommend investments in regional homelessness solutions this spring, hasn’t met since April and has not scheduled another meeting after canceling the one planned for May.

So where does this leave Seattle? And what lessons should Seattleites take from the swift, overwhelming defeat of the head tax? Here are some opinionated FAQs about what just happened, who’s responsible, and what happens next.

Why did the council overturn the head tax by such an overwhelming margin after approving it unanimously just a few weeks ago?

Council members who have supported the head tax from the beginning, yet voted to repeal it today, gave a variety of reasons for switching their votes. Lisa Herbold, who co-chaired the progressive revenue task force and issued a blistering statement yesterday denouncing the Seattle Chamber of Commerce for its role in defeating the tax , said she is convinced that “the vast majority of Seattleites now believe that increased human suffering in our city is a result of government inefficiency.” Council member Rob Johnson told me yesterday that he was concerned that a referendum on the head tax could doom the Families, Education, Preschool, and Promise levy that is up for renewal in November. And council member Mike O’Brien echoed Herbold’s comments, saying he didn’t see a path forward “where, six months from now, eight months from now, we will have the revenue we need” because the head tax appears likely to lose if it goes to a vote in November.

Polling by head tax opponents, whose efforts were funded by Amazon, Starbucks, Vulcan, and represents of the hotel and grocery industries, has consistently shown that most Seattle residents currently oppose the head tax, but that isn’t the whole story. As several speakers (and council member Kshama Sawant) pointed out today, proponents could have put together a counter-campaign to make the case for the tax between now and a November vote on the referendum. (As someone shouted in council chambers, “That’s what campaigns are for!”) The problem was, no one wanted to. Council members have sounded increasingly resigned, in recent weeks, to the futility of trying to pass local funding for homelessness in the face of virulent neighborhood opposition on the one hand and energetic, well-funded business opposition on the other. As those two groups have coalesced in recent weeks (today, head tax opponents claimed to have gathered 45,000 signatures purely through “grassroots” efforts, a claim belied by the $276,000 the “No Tax On Jobs” campaign paid a Trump-affiliated signature-gathering firm called Morning In America last month), council members have increasingly expressed the view that most of the city is against them. Yesterday, O’Brien told me that it had become “increasingly clear” to him “that the public seems to be aligned with the business community, specifically the Chamber,” against the head tax. O’Brien, who has received dozens of harassing emails and was singled out for extra invective at a recent town hall in Ballard that devolved into a one-sided screaming match last month, said he currently plans to run again, but noted when we spoke yesterday that he has not yet filed his paperwork to do so.

Is this really all about Amazon? 

No, but you’d be forgiven for thinking it was. Council member Kshama Sawant, who exhorted her supporters to “Pack City Hall!” in a mass email yesterday, has consistently characterized the head tax as a “tax on Amazon” and Jeff Bezos, whom she described earlier today as “the enemy.” Demonizing individual corporations is rarely a path to building broad community coalitions, and that’s especially true when that corporation is Amazon, whose name many Seattleites (rightly or wrongly) consider synonymous with “jobs.” This is one reason head tax opponents were able to so easily spin the head tax as a “tax on jobs,” and to get ordinary citizens to gather signatures against a tax that would really only impact the city’s largest corporations.

But as council member Teresa Mosqueda, who voted with Sawant against repealing the tax, noted pointedly this afternoon, Amazon is only the most visible opponent (and target) of the tax, which would impact nearly 600 high-grossing companies in Seattle. Amazon’s estimated $20 million annual head tax payment may be budget dust to a multi-billion-dollar corporation, but other companies with slimmer profit margins, like Uwajimaya (which opposed the tax), would also be impacted, and tax proponents made a critical mistake in failing to address or at least consider their concerns.

This goes not just for Sawant and the socialist activists who support her, by the way, but Durkan and the rest of the city council. By focusing their efforts on getting Amazon to sign on to the tax (in a handshake deal that apparently wasn’t very solid to begin with), the council and mayor forfeited an opportunity to bring business (and the labor unions that opposed the tax) to the table to come up with a real compromise that would actually stick, instead of dissolving less than 48 hours after a deal was supposedly struck, as the head tax “compromise” did. The folks who held up a giant “TAX AMAZON” banner at today’s meeting may find this hard to believe, but the $15 minimum wage was not won solely by a movement of uncompromising socialists; it was the product of months of hard work and tough negotiations between unions, city leaders, and businesses. Ultimately, businesses and labor presented a united front in favor of a compromise version of the $15 minimum wage proposal, which defused opposition from both the right and left.

So all the head tax opponents who insisted today that they just want better solutions to homelessness than the head tax have an alternative in mind, right?

Not really. Head tax opponents, many of many of them wearing anti-tax T-shirts and holding “No Tax on Jobs” signs (according to the latest campaign filing, Morning In America spent $3,500 on T-shirts), demanded that the council be more transparent about how money for homeless services is spent, and have suggested that the city can find enough money in its current budget simply by spending money more “efficiently.” While they certainly have a point that the city could do a better job highlighting how it spends its resources (the Human Services Department’s “addressing homelessness” webpage hasn’t been updated since last year, and the department’s “performance dashboard” is down due to “technical difficulties,” according to a spokeswoman), it’s far from clear that the activists demanding “data” and “audits” would be satisfied with any amount of information about the city’s budget for homeless services unless it coincided with reductions in funding for those services. As for efficiencies, as Mosqueda and O’Brien both pointed out today, most of the growth in the city’s budget over the past several years has gone into utilities, police, and other services, not homelessness and housing. “My analysis is we absolutely need more resources,” O’Brien said today. “There is no way” for the city to pay for additional services for the 6,300 people living on Seattle’s streets with existing resources “without devastating cuts to other programs that we all rely on,” O’Brien said.

So … is the takeaway just that Seattle is screwed? 

Well… Kinda. After today’s meeting, I talked to proponents of the head tax who seemed bruised and demoralized by today’s decision, and understandably so—apart from the 2016 housing levy, which is focused more on housing construction than on shelter beds, housing vouchers, and other services that flow through HSD, the city has failed to pass new revenue since former mayor Ed Murray declared a homelessness state of emergency in 2015.

If I was an activist who worked on the head tax, I would turn my attention away from Amazon—which will never support any tax that impacts its bottom line—and toward business and labor groups that might be more amenable to a compromise. I would also start posing some hard questions about what happens next not just to the city council—which is an easy target, given their greater accessibility—but to the leaders who have stayed largely in the background as this fight has played out, namely Mayor Durkan and King County Executive Dow Constantine. Durkan brokered the deal with Amazon and acknowledged that she didn’t have a specific backup plan if the head tax failed—what’s her plan now that it has? And Constantine has been mostly absent on homelessness since the beginning of the year, when he convened the One Table regional task force (unless you count his statements denouncing Seattle’s head tax proposal). What are the county and city doing to redress the embarrassing failure of the head tax, and how will they ensure that the next tax proposal, if there is a next tax proposal, doesn’t meet a similar fate? These are questions advocates on both side of the head tax debate should be asking as they regroup, reflect, and prepare to rejoin the debate over solutions, which certainly won’t conclude with today’s head tax repeal.

Morning Crank: “Dominated By Loud and Demanding Extremists”

1. According to a new analysis of the first six months of the city’s dockless bikeshare pilot program, which unleashed thousands of Starburst-colored rental bikes around the city, bikeshare users logged nearly half a million rides between July and December of last year, and roughly a third of the city used one or more of the three bikesharing services—Ofo, Lime, and Spin—at least once during those six months. Seattle bikeshare users took 3.6 rides for every 1,000 residents, a number that dwarfs the successful CityBike program in New York City (2.6 rides per 1,000 residents.) Those numbers, in fairness, are partly due to the fact that Seattle has the largest free-floating bikeshare system in the nation, by a lot: Of 44,000 bikes spread across 25 cities, nearly a quarter—10,000—are in Seattle.

The evaluation, which was done in collaboration with the University of Washington, also concluded that while ridership was concentrated around the University of Washington, the Burke-Gilman Trail, and downtown Seattle, the bikes are also more popular than expected in the Rainier Valley and Georgetown, two neighborhoods that weren’t included at all in the city’s original Pronto bikeshare system, which required users to return their bikes to designated parking spaces. (Unlike traditional bikeshare systems, “dockless” bikes can be left on the nearest bike rack or parking strip when a rider ends their trip.) People of color were just as likely to use the program as white users, and while just 24 percent of riders reported using helmets, the bikes did not seem to contribute to higher crash or head injury rates, adding another data point to the mounting evidence that the county’s mandatory helmet law does little to protect rider safety. While very few people (just 7 percent) used bikesharing only for recreational use, a huge percentage used the bikes to get to work or to access transit (75 percent), an indication that bikesharing may be able extend the “walkshed” for transit much further than the standard quarter-mile.

The news wasn’t all positive. The vast majority of bikeshare riders—68 percent—were male, a statistic that lines up with the skewed demographics of cycling in general. About four percent of bikes were parked in a way that fully blocked pedestrian or sidewalk access—a number that Seattle Department of Transportation bike share project manager Joel Miller noted might seem small, but “four percent of 10,000 bikes is certainly a lot of bikes and a lot of obstructions out there.” Perhaps predictably, 85 percent of the calls and emails the city has received about bikesharing have been negative, with most people complaining about bikes they believe were parked improperly, people who fail to wear helmets, and that the bikes themselves are ugly. The city can’t do much for people who are offended by the colors orange, yellow, and green, but they have set up designated bikeshare parking spots in Ballard on a pilot basis, and plan to expand that pilot project around the city.

People who consider bikes (or any form of transportation other than cars) to be “clutter” can rest easy on one count—transportation committee chair Rob Johnson said he has no interest in allowing electric scooters, which have caused  intense civic handwringing from Austin to San Francisco, on Seattle sidewalks any time soon. “I’ve started to watch a couple of the companies, particularly Lime (green) and Spin (orange), work with other cities on electric scooters, and I think that for us as a city to stay focused on bikes and make sure that this program goes from a successful pilot to a successful permanent program is the right progression for us, as opposed to something that could lead to the rollout of a scooter system,” Johnson said.

SDOT will present a new proposed permit plan for the post-pilot dockless bikeshare system to the transportation committee on June 19.

2. A new poll is testing campaign messages for and against a proposed referendum to repeal the $275-per-employee business tax that Mayor Jenny Durkan signed into law last month. Amazon, Starbucks, Kroger, and other large corporations have pledged hundreds of thousands of dollars to overturn the law, which would impact about 585 companies with revenues above $20 million a year. Much of that money is currently being spent on paid signature gatherers, who have been parked outside grocery stores across Seattle and have reportedly clashed with pro-tax organizers who are encouraging voters to “decline to sign”; those organizers, meanwhile, have accused signature gatherers of misleading voters about what the tax will do, falsely implying that it is a tax on groceries or that it will come directly out of workers’ paychecks.

The poll asks whether the following messages, among others, would make the respondent more or less likely to vote to repeal the head tax:

• What Seattle has already tried to do to fix homelessness hasn’t worked, and it seems like homelessness has been normalized. The city need to stop enabling those who refuse services, camp illegally, and dump trash like used needles and condoms in our public spaces.

• Homeless sweeps don’t work. They just shuffle people around. Most people want to come inside but there aren’t enough options. We need to have compassion and fund housing, treatment for addiction, and behavioral health services.

• The city of Seattle is wasting hard-earned tax dollars by spending tens of millions on the homeless and super expensive bike lanes. The city keeps promising big results and not delivering. Without a comprehensive plan for homelessness, we shouldn’t give them another cent.

• Complaints about government waste are a smokescreen and an attempt to distract. Homelessness is complex and will take time to fix. Big corporations are shamelessly and purposely spreading confusion to avoid paying a tax that they can afford to pay.

• City Hall is dominated by loud and demanding extremists led by demagogues like Kshama Sawant.

• The homelessness crisis isn’t going to get better without more housing and services. If big corporations don’t chip in, that means more property or sales taxes. The head tax isn’t perfect, but at least it’s not regressive.

• With rents up an average of $600 a year, low-income people can’t afford to have their jobs endangered by this tax.

• Amazon’s construction halt was a selfish attempt to hold the city hostage. We need to call Jeff Bezo’s bluff, overturn his effort to repeal the tax, and show that Seattle will make sure that megacorporations like Amazon help solve problem they’re creating.

• The city keeps asking taxpayers for money for homelessness, but they don’t have a plan. The city has spend over $60 million a year in the past five years and homelessness has only gotten worse. Our tax dollars are being wasted on things that don’t work.

• The mayor and city council and nonprofit providers are moving forward with a plan that is starting to  work. It got 8,000 families into housing last year. But the city needs an additional $410 million a year to tackle homelessness, and this tax will help.

• Low-margin, high-volume businesses will have to pass the tax on to consumers, meaning higher bills for food. We don’t need another back-door tax on food.

The poll also asks about a number of potential replacements for the head tax, including a “surcharge” on companies whose CEO makes 100 or more times what the average worker makes; a larger head tax; a tax that “only applies to employers who pay wages so low their employees qualify for public assistance”; and a business tax based on how much square footage a company occupies in the city rather than the number of people they employ.

If you enjoy the work I do here at The C Is for Crank, please consider becoming a sustaining supporter of the site or making a one-time contribution! For just $5, $10, or $20 a month (or whatever you can give), you can help keep this site going, and help me continue to dedicate the many hours it takes to bring you stories like this one every week. This site is funded entirely by contributions from readers, which pay for the time I put into reporting and writing for this blog and on social media, as well as reporting-related and office expenses. Thank you for reading, and I’m truly grateful for your support.

 

 

So Much for Compromise: Amazon-Backed Business Coalition Invests Big to Kill Head Tax

Remember when, just a couple of weeks ago, Amazon held the whole city hostage by halting plans to build one 17-story tower and threatening to sublease space it had planned to rent in another? The issue was the size of the proposed head tax to fund housing and services for some of the thousands of people living homeless in Seattle: A majority of the city council wanted the tax to be $500 per employee on every business with gross revenues of more than $20 million a year (Amazon plus nearly 600 other companies); Amazon said it couldn’t go a cent higher than $250. Over a weekend of frenzied negotiations, in which Mayor Jenny Durkan reportedly served as the conduit between Amazon and the city council, that five-member majority evaporated, and on Monday, the council voted unanimously to approve the $275 tax that Amazon supposedly wanted. Amazon resumed construction, everybody breathed a sigh of relief, and the council prepared for the next battle—a debate over how to spend the money, about $47 million a year, that the hard-won head tax would generate.

Fast forward a couple of weeks, and it looks like Durkan—and the council—were in over their heads. Amazon may still be building in Seattle, but they have one foot out the door, and last week, they made their first pledge—$25,000—to the “No Tax On Jobs” referendum campaign. The campaign enjoys the backing of not just other corporate behemoths (Kroger, Starbucks, Centurylink) but a who’s who of local developers, hotel industry players, and maritime and industrial businesses. So far, the anti-tax campaign has brought in more than $352,000 in financial pledges—and that doesn’t count the free labor the companies’ anti-tax messaging has received from regular citizens who are mad at the city’s response to homelessness, who are cheerfully gathering signatures at farmers’ markets and community meetings around the city. (The dubious connection between a tax on the largest corporations and ordinary taxpayers is that if companies like Amazon are required to pay additional taxes, they will leave the city, taking all those high-paying jobs with them. The irony that many of the people who are freaked out by this scenario are the same people who stridently oppose the increased traffic and population density that all those “jobs” produce appears to be lost on many head tax proponents.)

It’s hardly surprising that Amazon is looking out for its bottom line. What is a bit surprising is that Durkan seems to have believed that her half-measure “compromise,” which was focused on Amazon and not the rest of Seattle’s politically active business community, would quell a rebellion. When former mayor Ed Murray (who resigned in disgrace after allegations that he sexually abused minors decades ago) wanted to make sure that the $15 minimum wage proposal would stick, he created an unprecedented business- and labor-led advisory committee that included representatives from the Seattle Hospitality Association, the Chamber of Commerce, and local businesses like Ivar’s and Nucor Steel along with labor and social-justice groups. Over five months, that group hammered out a deal that phased the $15 minimum wage in slowly, over seven years, with extra concessions for the small businesses that would be most impacted by the increase. By next year, workers at all but the smallest businesses in Seattle will be making a minimum of $15 an hour.

Four years ago, Seattle Hospitality Group founder Howard Wright stood beside the mayor for a photo op as he signed the legislation making $15 the law of the land. This week, he donated $25,000 to the effort to kill the head tax.

Maybe compromise is harder than it looks.

If you enjoy the work I do here at The C Is for Crank, please consider becoming a sustaining supporter of the site or making a one-time contribution! For just $5, $10, or $20 a month (or whatever you can give), you can help keep this site going, and help me continue to dedicate the many hours it takes to bring you stories like this one every week. This site is funded entirely by contributions from readers, which pay for the time I put into reporting and writing for this blog and on social media, as well as reporting-related and office expenses. Thank you for reading, and I’m truly grateful for your support.

Sawant’s City Printer Usage: 26 Hours, One “Tax Amazon” Rally, 4,000 Copies

A little over a week ago, during the council debate over the head tax, council member Sally Bagshaw called out her colleague, council member Kshama Sawant, for using the legislative department’s shared printer to print out a huge number of bright red posters advertising a rally Sawant was holding over the weekend to protest Amazon and create public pressure on the council to support the highest possible tax. “I just don’t think it is right for us to be using city resources or the copy machines to promote something that not all of us agree to,” Bagshaw said.

I wondered just what kind of resources Bagshaw was talking about, so I filed a records request to find out how Sawant’s printer usage compared to other council offices’. (Each office has its own printer, but big jobs—like, say, 11-by-17 color posters for political rallies—must be done on a large color printer in the second-floor printer room).

Unfortunately, the city wasn’t able to provide the most recent month’s invoice to its printer company, Ricoh, because that invoice wasn’t available yet. Printer costs have accelerated steadily through the year, however, growing from $493.86 in January to $1,231.46 in February to about $1,300 in March (the exact total is hard to extrapolate because the March bill includes rent for the copier itself, plus various taxes whose rates are unspecified).

Fortunately, the printer itself does save records for the most recent several days, broken down by document name and the name of the staffer requesting the print job. I made my request on May 14, the day  Bagshaw chided Sawant for using the council’s shared, city-funded printer to create her rally posters, and got records showing all print jobs between 11:02 am on May 10 and 10:19 am on May 14. (According to the council’s public disclosure officer, the printer does not store print records long-term.) Sawant’s “Tax Amazon” rally was on Saturday, May 12.

The documents show that Sawant’s office—specifically, her legislative assistants Ted Virdone and Adam Ziemkowski—printed several thousand posters and other documents related to the rally, including hundreds of chant sheets to guide rally participants during the “March on Amazon.” The printing jobs dwarf other council office’s print requests; moreover, the council offices that did relatively large print jobs during the time when Sawant’s office was using the city printer to produce her rally posters were printing presentations, copies of studies, and agendas for council meetings—not posters for weekend demonstrations against Amazon aimed at pressuring council members to adopt a larger tax.

Between around 2:00 in the afternoon on May 10 and 4:00 in the afternoon on May 11, the day before the rally, Sawant’s office printed:

  • 1,004 copies of a document called “March On Amazon.doc.”
  • 50 copies of a document called “fight bezos bullying.pdf”
  • 75 copies of a document called “tax amazon, no loopholes, no sunset.pdf”
  • 50 copies of a document called “tax amazon – fund housing and services.pdf”
  • 50 copies of a document called “tax amazon, 75 million, no extortion2.pdf”
  • 50 copies of a document called “150m EHT.pdf” (Sawant was pushing for a head tax, or Employee Hours Tax, that would raise $150 million a year)
  • 50 copies of a document called “tax amazon, no bezos durkan deal.pdf”
  • 400 copies of a document called “Tax Amazon chantsheet2.doc”
  • 2,198 copies of a document called “may 11 (two sided).pdf.

It’s unclear, given the limited period of time the records cover, whether Sawant’s office printed other posters and rally-related before 11am on May 10, the earliest time for which printer records are available. It’s unclear from the records which documents were large 11-by-17 posters and which were in full color. However, demonstrators at last Monday’s council meetings on the head tax held signs bearing the same slogans as those in the file names Sawant’s office printed out the previous Friday, and Sawant herself defended her use of the city’s official printer to produce anti-Amazon materials, telling Bagshaw, “You can choose not to use your office for really fighting for the interests of working people and to build movements. I strongly believe that council resources absolutely should be used to further social movements and not for the protection of the interests of the chamber of commerce.”

Overall, Sawant’s office printed out more than 4,000 copies in the approximately 24 hours between the afternoon of May 10 and the afternoon of May 11. (After the rally, their printing needs returned to a normal level—about 40 pages between May 12 and May 14).  No other office came close. Council member Rob Johnson’s office was in second place, with just over 600 copies in the same period (none of them posters), but that was skewed by a single 465-page printout—copies of a PowerPoint presentation on the Families and Education Levy for council members.

Seattle Ethics and Elections Commission director Wayne Barnett told me that he considered Sawant’s use of the city’s printer to produce her rally signs acceptable under city ethics rules, because she was using the posters “to pass legislation.”

If you enjoy the work I do here at The C Is for Crank, please consider becoming a sustaining supporter of the site or making a one-time contribution! For just $5, $10, or $20 a month (or whatever you can give), you can help keep this site going, and help me continue to dedicate the many hours it takes to bring you stories like this one every week. This site is funded entirely by contributions from readers, which pay for the time I put into reporting and writing for this blog and on social media, as well as reporting-related and office expenses. Thank you for reading, and I’m truly grateful for your support.

Six Things to Think About When Thinking About the Head Tax

This story originally appeared in the South Seattle Emerald.

Weeks of tense negotiations, heated yelling sessions, and a high-stakes game of chicken between the biggest employer in the city and the city council culminated in a unanimous city council vote to approve a $275-per-employee “head tax” on Monday afternoon. But what does the vote mean? Is Amazon’s threat to abandon the city off the table? And where does Seattle go from here?

We’ve put together a handy primer to answer these and other pressing questions about this latest effort to address the growing homelessness crisis in Seattle.

1. The $275-per-head tax the council passed Monday was not the tax a majority of the council wanted to pass. Last Friday, in fact, the council’s finance and neighborhoods committee (made up, on this occasion, of all nine council members) approved a much larger tax of $500 per employee, which would have raised around $75 million a year. That vote, however, was too narrow (at 5-4) to withstand a likely veto by Mayor Jenny Durkan, who offered up a $250 version of the tax as a counterproposal last week. The “compromise” most council members agreed to over the weekend raised the total size of the tax by just $25 per employee, enough for Durkan to cheerfully declare victory on Monday evening and for council members who wanted a larger tax, such as council member Mike O’Brien, to say that they had done everything they could.

2. The original $500 tax proposal didn’t come out of nowhere—it was recommended by the city’s Progressive Revenue Task Force, a group that was established after a group of council members failed to pass a smaller, but similar, business tax during the city council’s 2017 budget process. The task force was charged with coming up with a tax that would produce between $25 million and $75 million in revenues; they ended up proposing a $500-per-employee tax on businesses with more than $20 million in gross revenues after considering, and rejecting, lower tax levels that would apply to a larger number of businesses. By targeting the tax at businesses at the very top of the city’s revenue scale, the task force was attempting to respond to objections by smaller businesses (those with more than $5 million but less than $20 million in gross revenues) operate on narrow profit margins and shouldn’t really count as “big businesses.” The more businesses the task force exempted from the tax, the larger the tax had to be to yield the same revenues, which is how the task force arrived at $500

3. The head tax isn’t enough to address the problem. The tax, which sunsets after five years, would raise about $47 million a year for new housing, rental subsidies, and supportive services. Under the spending plan adopted by the council, that would be enough to build about 591 units of housing—288 for low-income people making between 30 and 60 percent of Seattle’s area median income and 303 permanent supportive housing units for formerly homeless people making between 0 and 30 percent of median.  The plan also includes rental subsidies to get homeless people into “immediate housing,” funding for a total of about 250 new shelter beds and authorized encampments, and more money for safe parking lots and sanitation stations.

A few hundred housing units is obviously far from adequate to house the more than 8,500 people who were homeless in Seattle at the beginning of 2017, when All Home did its most recent homeless census—a number that has likely only grown since then. In fact, a report commissioned by the Seattle Metropolitan Chamber of Commerce, by the consulting firm McKinsey & Co., concluded that the county needs an additional 14,000 units of affordable just to address the current needs of people experiencing homelessness in King County. Building that much housing and addressing the other needs of King County’s homeless population would cost the public and private sectors $410 million a year, the independent report concluded, and that’s only if the annual rate of people falling into homelessness does not increase. King County would need to spend between $164 million and $215 million a year to pay its “share” of that $410 million total.

Michael Maddux, a staffer for council member Teresa Mosqueda’s office, crunched the numbers in the report and determined that Seattle’s “share” of that countywide total would be somewhere between $59 million and $79 million. The $47 million in annual spending that the $275 head tax would provide falls short of the bottom end of that range.

4. The tax that passed Monday is just the beginning of the story. Although the national news crews packed up their cameras and left before the council could begin discussing how to spend the new revenues on Monday, the spending plan is in many ways more critical than the size of the tax. The plan Durkan proposed for her $250 tax would have focused the vast majority of its spending on emergency shelter, encampment removals, and other stopgap solutions, rather than housing, building just 250 units of new affordable housing over five years.

On Monday, the council approved a spending plan that took the opposite approach, emphasizing housing over temporary shelter. However, the real debate will come later this year, when Durkan proposes an implementation plan for the tax as part of the city’s annual budget process. (The spending plan adopted this week sets the council’s priorities, but is itself a nonbinding resolution.) That plan, and the budget process, will give proponents of the Durkan spending model another opportunity to attempt to recalibrate the spending balance in the tax proposal.

The city’s adopted Pathways Home plan, which directs the city to focus its homeless service spending on programs that get people off the streets and into “permanent housing” as quickly as possible, recommends that the city do the exact opposite of what Durkan recommended in her original spending plan. Last year, the city adopted a spending plan for homeless service providers that actually eliminated funding for a large number of basic shelter beds, on the grounds that those shelter providers failed to demonstrate that they could move their clients into permanent housing quickly. Pathways Home is controversial, in part, because it penalizes nonprofits that serve the hardest to house, but the “housing first” principles that underlie it are right in line with the McKinsey report that suggested a lack of housing is the fundamental problem underlying Seattle’s homelessness crisis.

5. Seattle has continued to insist that it won’t continue to “go it alone” on funding for homelessness, but King County has yet to step up and propose its own tax plan to supplement Seattle’s. Although Durkan announced Monday that King County will provide $5.7 million in one-time funding to help keep shelters and authorized encampments open in 2018, the county has been noticeably quiet about what it will do to fund housing and services on an ongoing basis. One Table,” a regional task force made up of elected officials, advocates, and business leaders from across King County, began meeting in January. So far, they have announced that Pearl Jam will hold two concerts in Seattle to raise at least $1 million for homelessness—and not much else. The group’s last two public meetings were canceled with minimal public notice, and the closest they have gotten to a set of recommendations is nine-page document, released quietly last month, that includes no cost estimates, no funding proposals, and no timeline for implementing any of the ideas on the list. That document no longer appears to be available on King County’s website.

6. Finally, the passage of the head tax is unlikely to end the vitriol that has accompanied the debate over homelessness in the past few months, exemplified by a recent town hall meeting at a church in Ballard where homeowners shouted down a panel of elected leaders and progressive revenue task force members with bellows of “BULLSHIT!” “FUCK YOU!” and “RESIGN NOW!”  The problem with any spending plan that fails to house enough people to make an appreciable dent in homelessness is that it leaves too many people on the streets, opening the city up to the predictable objection that “no matter how much money we give them, the problem keeps getting worse”  and the problem with any spending plan that takes a large number of people off the streets and stuffs them into new “tiny house” camps and shelters is that those people have nowhere to go and shelter becomes a way of warehousing people indefinitely.

Meanwhile, the problem with spending the amount that experts consider “enough” is that it tends to inspire fierce pushback from the business community. (According to Maddux’s report, a thorough response may require about $69 million per year from Seattle and $120 million from the rest of the county.)  Amazon threatened to stop construction on one of its downtown projects over the original $75 million head tax proposal, and said on Monday that the adopted $47 million tax “causes us to question our growth here” in Seattle. That kind of talk tends to send those who have benefited from the recent Amazon-fueled boom, such as homeowners who have seen the value of their properties skyrocket to an average of $820,000 over the last few years, into a tizzy. Amazon may not leave Seattle, or even slow its growth here—Fast Company, the business magazine, called the company’s latest statement “passive-aggressive and vaguely threatening”—but the possibility that the company, which just reported $1.6 billion in quarterly profits, might retaliate against the city remains a guillotine that the company is more than happy to hold over the heads of those who have benefited from its success.

Controversial Head Tax Passes After Weeks of Bruising Debate

After a weekend of negotiations between city council members and Mayor Jenny Durkan (and, according to council president Bruce Harrell, “conversations with Amazon, big business, small business, [and] homeless advocates”) the city council unanimously approved a new version of the controversial employee hours tax today, imposing a $275-per-employee tax on about 585 businesses with gross receipts of more than $20 million a year.  The $275 figure was a  “compromise” between the $500 tax passed out of committee last week by a slim majority of council members and the $250 tax proposed by Harrell and Durkan, which emphasized short-term shelter and garbage cleanup over permanent housing, and would have built just 250 new units of housing over five years. Durkan had threatened to veto the larger tax proposal, and as several council members noted on the dais this afternoon, the council majority was unable to convince one of their colleagues (such as council member Rob Johnson) to switch sides and give them a veto-proof majority. The $500 head tax proposal was the result of months of work by the city’s progressive revenue task force, which was appointed after a last year’s budget process and charged with coming up with a proposal to tax businesses to pay for homeless services and affordable housing. (Johnson, who was seen as a potential swing vote, cited the need for a process like the one the task force went through in voting against an early head tax proposal last year.) The task force issued their report in March.

The tax, which sunsets after five years (and which will no longer be replaced, as in previous versions of the legislation, with a business payroll tax), would raise about $47 million a year for new housing, rental subsidies, and supportive services. According to the spending plan the council also adopted this afternoon, that would be enough to build about 591 units of housing—288 for low-income people making between 30 and 60 percent of Seattle’s area median income and 303 permanent supportive housing units for formerly homeless people making between 0 and 30 percent of median. (The full spending plan is available here.) The plan also includes rental subsidies to get homeless people into “immediate housing,” funding for a total of about 250 new shelter beds and authorized encampments, more parking lots for people living in their cars, and sanitation facilities. The adopted spending plan, which allocates about two-thirds of the head tax revenues to housing, reverses the priorities in the spending plan proposed last week by Mayor Jenny Durkan and council president Bruce Harrell, which would have spent 70 percent of the revenues from the head tax in years 1 and 2 (and 60 percent in years 3 through 5) on short-term emergency shelter, garbage cleanup, and a new Navigation Team to coordinate the removal of unauthorized encampments and the people in them.

Prior to their vote for the tax, several council members expressed regret that they failed to come up with a compromise that could convince at least one of their colleagues to join them in a veto-proof majority in favor of a larger tax, such as the $350 compromise council member Lisa Herbold floated Friday. Council member Lorena Gonzalez, who was one of the co-chairs, along with Herbold, on the progressive revenue task force, said, “While I’m excited that we will be taking this vote… to reestablish a head tax… it’s regrettable that we were unable to find a path amongst our colleagues and with the mayor that they would be willing to support a higher taxation rate than $275.” Council member Mike O’Brien, who recently weathered hours of verbal abuse at an out-of-control forum on the head tax in Ballard, sounded grim as he conceded, “I’m settling for this level of service.”

Business leaders continued to grumble about the tax. The Downtown Seattle Association issued a statement decrying the tax as “bad economic policy [that] will negatively impact Seattle’s economy and city tax revenues,” and Amazon said in a statement that the “tax on jobs” makes the company “very apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses, which forces us to question our growth here.”

The next battle for homeless advocates at city hall will be over the spending plan for the tax—a component of the plan that is in many ways more critical than the amount of money the tax produces. Durkan’s proposed spending plan, with its emphasis on emergency shelter, encampment removals, and tiny houses, would have largely backfilled spending on programs for which funding is about to run out (the plan contained a $15 million-$16 million annual line item to “continu[e] programs which had one-time funding in the 2018 budget, or insufficient funding, plus unspecified “new emergency, temporary, and enhanced shelters, navigation centers… and/or service and safe parking for vehicular living”), reducing the impact of the new revenues to whatever is left over once all the programs that are running out of money are funded. Although the council adopted the spending plan, that vote was narrow (5-4, along the same lines as Friday’s vote) and the actual implementation plan will have to be proposed by Durkan and adopted by the council as part of this year’s budget process.

Before the vote, council member Teresa Mosqueda said the new revenues from the head tax “are supposed to be in addition to” existing spending, not a replacement for it. Asked specifically about this concern at a press conference after the vote, Durkan pivoted to talking about the need to examine the council’s proposed spending plan itself, which she said would fund “a number of programs, such as shelter and supportive housing,” for which long-term funding is not secure. She did not answer the question about whether she would push for a spending plan that used new dollars to pay for existing funding commitments.

The insistence on funding existing shelter beds, from some of the four-member council minority as well as Mayor Durkan, is somewhat ironic. After all, it was the city council itself (with then-mayor Tim Burgess’ support) who adopted a spending plan for homeless service providers last year that eliminated funding for many basic shelters, on the grounds that they failed to demonstrate that they could move their clients into permanent housing quickly. The new standards for shelter providers, for example, withhold funding if those shelters fail to move 40 percent of their clients into housing within three months, a standard that few emergency shelters can meet, particularly those serving the clients who are hardest to house.

The emphasis in the Durkan/Harrell plan on funding shelters rather than housing also flies in the face of what virtually every expert, from the city’s homelessness consultant Barb Poppe to the city’s Human Services Department to a Seattle Metropolitan Chamber of Commerce-commissioned report to former All Home King County director Mark Putnam, which is that a solution to homelessness requires getting people into housing, not tents and “tiny houses” (which Putnam recently referred to as “glorified garden sheds.”) Asked why she supported a split that favored spending on shelters over housing, Durkan responded, “because I think the people of Seattle think that we’ve got to make a difference in homelessness tomorrow. We need to get  people off the streets and get them a safe place to live. None of this housing will come online for years.”

Mosqueda told me before the vote that she was “not interested” in a spending plan that funds temporary shelter “that evicts people in five years and fails to build the housing we need.” The problem in Seattle, Mosqueda argued, is not so much lack of mats on the floor as a lack of affordable housing, and providing more temporary shelter beds is only a “Band-Aid” that fails to address the larger affordability problem at the root of Seattle’s inability to move people from shelter to housing. In a memo released earlier today, Mosqueda staffer Michael Maddux wrote that in the Durkan/Harrell plan, “There does not seem to be increased capacity in funding to support short-term enhanced shelter, and with the draconian cuts to the housing component, no plan appears in place to provide permanent housing for people moved into the few new beds created (about 1,000) by the Mayor’s plan.”

One thing everyone on both sides agreed on is that homelessness is a regional, not a Seattle-only, problem. “Seattle can’t go it alone,” Durkan said during her press conference. “This is a regional crisis that demands a regional response.” That quote might have been lifted verbatim from any other number of press conferences by any number of Seattle officials, past or present. Seattle officials routinely implore “the region,” usually meaning King County, to step up and pay their fair share to address every challenging problem, whether it’s inadequate transit or inadequate funds for housing.  Whether that additional funding will materialize is uncertain. Durkan announced this morning that the state has come up with an additional $40 million for behavioral health services in 2018, and $18 million to $20 million a year after that, and that King County has said it will provide the city with $5.7 million to expand shelter and “safe alternatives for people living outdoors” in 2018. Little is currently known about what strings are attached to this funding or how it can be spent.

Beyond the $5.7 million announced this morning, the county has been parsimonious with its funding to address the crisis. (It did adopt a resolution today declaring May 14-20 “Affordable Housing Week” in King County,  “all county residents” are encouraged “to embrace affordable housing opportunities in their communities.”) Last week, King County Executive Dow Constantine suggested last week that the city needs to slow down and work on a regional approach through the massive “One Table” task force, which began meeting back in January. One Table was supposed to have finished up its meetings and announced its recommendations for a regional approach to addressing homelessness by now; instead, they have canceled their past two meetings and have been very quiet since April. One Table may ultimately come back with a recommendation for a countywide levy, or a sales tax to pay for housing and services (two of the only options available to local governments in Washington State), or it may not. Either way, Seattle is moving forward with what is at least an attempt to address the crisis of homelessness within its borders. Whether the scaled-back proposal adopted today makes a perceptible, measurable dent in homelessness, or whether it merely provides more fodder for anti-tax activists who insist that the city is wasting its money because the problem isn’t getting any better, will be clear soon enough.

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Employee Hours Tax Passes Over Durkan, Amazon Objections, But Veto Looms

This story originally appeared at Seattle magazine.

With the city council poised to pass a proposed $500-per-employee “head tax” on Seattle’s 600 largest businesses, and Mayor Jenny Durkan equally prepared to veto the proposal in its current form, the question now is: What’s next?

With council members heading into a weekend of negotiations, it’s possible that both sides could emerge on Monday with a compromise solution that splits the difference between the tax that passed on Friday and the “compromise” version that Durkan and council president Bruce Harrell support, which would cut the council’s proposal in half. However, if the two sides fail to reach a compromise, the larger version of the head tax will almost certainly pass on Monday by a 5-4 majority, which is one vote shy of the 6-3 margin supporters need to override a mayoral veto.

In a statement Friday afternoon, Durkan made it clear that she would veto the tax in its current form, but said she still held out hope that the council “will pass a bill that I can sign.” However, Durkan’s ally Harrell, also made it clear on Friday that he would not support a compromise floated by council member Lisa Herbold to lower the tax to $350 per employee, indicating that he and Durkan may not be open to a proposal that merely closes the gap between what Durkan and the council majority want. It’s possible, in other words, that when Durkan says “a bill that I can sign,” she merely means a bill that cuts the tax to $250 per employee—the amount Amazon, which has threatened to stop construction on its Seattle headquarters if the tax passes in its original form, has said they are willing to accept. Amazon contributed $350,000 to a pro-Durkan PAC in last year’s mayoral election.

A quick backgrounder on the tax: Last year, at the end of its annual budget process, the council formed a task force to come up with a progressive tax to pay for housing and services for Seattle’s homeless population. After several months of meetings, and numerous compromises in response to objections from small and low-margin businesses, the task force came up with a plan that would generate about $75 million a year—a $500-per-employee annual tax on businesses with gross revenues above $20 million, a threshold that excludes companies with high gross revenues but tight margins, such as restaurants. The proposal also came with a spending plan that emphasized long-term affordable housing over short-term emergency shelter services, and a provision that would convert the head tax into a business payroll tax starting in 2021, with no sunset date.

On Thursday night, Mayor Durkan released her own “compromise” head-tax proposal, which would cut the recommended head tax in half, to $250 per employee, ditch the provision transitioning the head tax into a business payroll tax, and sunset the whole thing in five years unless the council voted proactively to renew it. On Friday, Harrell introduced a proposal identical to the Durkan plan, along with a spending plan that emphasizes shelter over permanent housing and would pay for just 250 new rental units over five years. The Durkan/Harrell plan also includes a four percent wage increase for social service workers (many of whom make just over $15 an hour) and funding for a second Navigation Team to remove tent encampments and refer their residents to services.

When a council vote is 5 to 4 and a veto hangs in the balance, talk inevitably turns to “swing votes”—that is, who can be swayed to join the council majority to make the bill veto-proof?

Right now, it appears unlikely that anyone in the council’s four-person minority will budge over the weekend to support the full $500 tax, or even Lisa Herbold’s proffered $350 compromise, but a lot can change in the course of two days. So perhaps there will be a compromise that convinces one of the council members who opposes the larger tax to join the council majority. (The opposite scenario—that one of the five members who voted for the original $500 tax will join the four-member minority that wants to cut it in half—seems highly unlikely, since all five council members have consistently supported the proposal that came out of the task force, and since they stand to gain more, politically speaking, by forcing Durkan into a veto fight than by switching sides and handing the mayor a bloodless victory.)

However: If, as seems more likely as of Friday afternoon, the vote remains 5-4, the question becomes what will happen in the 30 days after Durkan vetoes it.

Judging from council members’ past positions and their comments Friday, the most likely “swing vote” when the decision comes down to passing something or doing nothing appears to be council member Rob Johnson, who seemed more tentative in his position than either Debora Juarez (“If we tax jobs to build houses and the jobs leave because of the tax, then no houses get built”) or Sally Bagshaw, who said virtually nothing at Friday’s meeting but is typically not the first council member to make dramatic vote switches.

Last year, when the council was debating whether to include the head tax in the budget, Johnson argued that proponents needed to come up with a more detailed spending plan to justify such a substantial tax. They did exactly that—and Johnson voted instead for a hastily sketched-out proposal that some council members didn’t see for the first time until this morning. On Friday, the most enthusiastic comment Johnson managed to muster about Durkan’s proposal was that it “allows for us to continue that pay-as-you-go process that has been a hallmark of most of the affordable housing investments that we’ve made as a city.”  If tax proponents are looking for a swing vote to help them override Durkan’s veto (and there is precedent for this kind of vote-switching), Johnson may be their best bet.

The council will be in discussions all this weekend, and will meet again on Monday morning to discuss the proposal (and any compromises reached over the next two days). A final vote on the head tax is scheduled for 2:00 Monday in council chambers.