News reports clarify background and next steps for Seattle head tax. Mayor signs bill. Opponents consider repeal measures.

Controversy clings to the Seattle head tax. Even as Mayor Jenny Durkan signs the bill into law, there are reasons to question how long the tax will be around. Here’s a rundown of stories shedding light on the sausage-making and possible unmaking.

Seattle Times reporter Daniel Beekman reports on the maneuvering in the days before Monday’s crucial vote.

Wrestling with Councilmember M. Lorena González over the size of the tax, the mayor insisted on a tax no larger than $250 per employee, per year because that was the most Amazon representatives had told her they would accept, González recalled…

“There was a white board,” González said, describing a three-hour meeting Saturday afternoon in Durkan’s office on the seventh floor of City Hall. “There was a council option and a mayor’s option, and the mayor’s option was consistently $250.”

Durkan told a similar story, though her office stressed she pushed Amazon up to that number from zero and spoke to many other businesses about the tax.

After a lot of wrangling, it came to this:

By Monday, all nine council members had thrown their support behind a tax of $275 per employee — agreeing to a compromise between social-justice activists and business leaders that pleased Durkan, only somewhat appeased Amazon and left González wondering whether she should have held out for more.

But, as Beekman reports, that may not be the end of the saga.

Not everyone is ready to move on, however.

Big-business leaders not placated by the last-minute reduction in the size of the tax are “doing their homework” on the city’s referendum process, said Jon Scholes, president of the Downtown Seattle Association.

“We haven’t foreclosed on any options,” Scholes said, pointing to a recent poll of registered voters by KIRO-TV in which 54 percent of respondents said they opposed the head tax.

KIRO7 reports that others are also looking at repeal strategies.

Separately, marketing consultant Saul Spady said he’s planning to file a referendum to repeal the head tax.

“For an issue that (is) this hot, that had people walking into City Hall and chanting ‘no head tax,’ to have a 9-0 vote and a statement that we got a grand compromise that literally is six time larger than the nearest head tax in the country, that’s not a compromise at all.”

Spady’s grandfather founded the Dick’s restaurant chain which opposes the head tax. Spady himself, though, is not part of the restaurant company.

In addition to a referendum, Saul Spady is thinking about a voter initiative creating incentives for private businesses to help the homeless.

Former Attorney General Rob McKenna points to a path to repeal that goes through Olympia. He tells MyNorthwest.com,

“The City of Seattle would rely on its general taxing authority over businesses to impose this tax; it’s a kind of excise tax,” former state Attorney General Rob McKenna told KIRO Radio’s Dave Ross. “They probably have authority to impose it under that general taxing authority related to their police power to license businesses. It’s something they have tried to bring their income tax under, but it really fails for the income tax. It probably works for the head tax.”

“However, the Legislature could take it away from them by specifically prohibiting certain kinds of taxes, like a head tax if it chooses to do so,” he added.

That’s what State Senator Mark Schoesler aims to do. He believes that state law can be clarified within the next legislative session to prevent Seattle from imposing its head tax. He has already drafted a bill.

“The city’s taxing authority, as Senator Schoesler observes, all comes from the state,” McKenna said. “The state can taketh away just as it giveth.”

Former Gov. Christine Gregoire spoke out strongly against the head tax at an event Thursday morning. Geek Wire’s Monica Nickelsburg reports, 

Christine Gregoire didn’t mince words when asked about Seattle’s controversial new head tax at the Museum of History and Industry’s Innovation Breakfast on Thursday. The former governor of Washington and CEO of Challenge Seattle said she is categorically against the legislation, passed by the Seattle City Council and signed into law this week.

“I object to the policy of a head tax,” Gregoire said during an on-stage discussion with MOHAI Executive Director Leonard Garfield. “I firmly believe it is a tax on jobs. I firmly believe it undermines our international and national reputation.”

The article carries more of her statement. We recommend it. 

We think there are still more chapters of this story to be written. Stay tuned.