Statewide discussion of Seattle head tax continues, as new poll shows tax fatigue afflicts city’s residents. Tipping point?

In a recent column, AWB president Kris Johnson writes of how the Seattle head tax has garnered statewide attention.

As Seattle moves ahead with a plan to tax employers $275 per year per employee, the rest of the state is watching with a mix of disbelief, unease and even a little opportunism.

The disbelief comes out during conversations I’ve had with employers statewide and often comes back to a single question: What are they thinking?

As petitioners press on with efforts to force a referendum on the tax, a Seattle City Councilmember agrees that the issue has assumed outsize importance. Geek Wire reports,

…for Seattle City Councilmember Lorena González, one of the sponsors of the head tax legislation, the implications are much bigger.

Speaking at Seattle City Club’s Civic Cocktail on Wednesday alongside Seattle Chamber of Commerce CEO Marilyn Strickland, González said she believes the head tax debate is the first step in a larger discussion about social issues like income inequality and systemic racism not just in Seattle, but also across the state and the nation.

…She continued, “And I think it’s fair to say that this is a redefining moment in the city of Seattle…”

Probably little disagreement on that. In his column, Johnson points out other cities in the state are targeting recruiting efforts at Seattle businesses, as are cities across the country

And in the Legislature, Sen. Mark Schoesler, R-Ritzville, is proposing a bill banning cities from imposing a tax based on employee head count, wages or hours worked. Sen. Mark Mullet, D-Issaquah, said he plans to introduce legislation that would stop cities from implementing both a head tax and a business and occupation tax.

Bill Virgin writes in Seattle business about how the high cost of doing business King County is impacting business decisions now.

Shape Technologies, the private-equity owner of Kent-based Flow International, is moving Flow’s manufacturing operation to Kansas, resulting in the loss of 110 jobs locally.

“The cost of doing business in the Seattle area has changed dramatically over the last few years, and the cost of manufacturing in the region continues to climb,” Shape President and CEO David Savage said in a statement. “As we look into the future, we expect these operating challenges to continue to increase, and we are taking the step now to combine operations in order to remain competitive in our marketplace.”

In a column for Bloomberg News, Joni Balter writes,

The Seattle area has the third highest homeless population in the country. More money is spent each year as the problem deepens.

“We are already spending millions of dollars and so people lack confidence that these dollars are going to play a meaningful, incremental role,” said state Senator Reuven Carlyle, a Seattle Democrat who opposed the tax. “It comes at a big cost without buying us a big impact.”

…When Amazon makes its HQ2 announcement, which is expected soon, some psychological pressure on Seattle will ease. Another place will become the “it” city, with the prospect of thousands of new high-paying jobs stimulating the local economy.

Maybe then, Seattle and its smug City Council will pause, reflect and devise a better strategy for relating to the businesses that fill its tax coffers and fuel its prosperity.

Carlyle’s “big cost without buying us a big impact” line of reasoning appears to have caught on with Seattle voters. Crosscut report David Kroman writes about a poll showing an unusually skeptical Seattle electorate.

Seattle residents are not only deeply dissatisfied with how the Seattle City Council has addressed homelessness, but also less willing than they used to be to sign off on new taxes to address the problem, according to a poll of 800 likely voters conducted in March that Crosscut has obtained.

Those familiar with the results, who requested anonymity to discuss private polling, were stunned: It’s the first time anyone can recall the usually generous Seattle voters being overwhelmingly skeptical of additional taxation. 

Moreover, this is a shift from just 18 months prior, when voters responded more positively to the idea of increasing spending on homelessness, according to a separate poll conducted in late 2016 and published here for the first time. Crosscut was looking into the unpublished 2016 results when it learned of the new poll.

Key takeaways:

The results do not look great for the Seattle City Council, with strong dissatisfaction on how the elected officials have dealt with homelessness, taxes and housing: 

  • 80 percent were very or somewhat dissatisfied with how the council has addressed the rising cost of housing.
  • 61 percent were dissatisfied with progress on income inequality.
  • 55 percent were unhappy with what they perceived as high taxes.  
  • 83 percent were dissatisfied with how the Council has addressed homelessness, with a majority, 51 percent, responding “very dissatisfied.” 

With that dissatisfaction may come consequences. A slim 29 percent believed city government needs more taxes to address homelessness, while 63 percent believe it already has enough and can solve the problem with more effective spending. 

There’s more, but taken with the KIRO poll showing 54 percent opposition to the head tax, the folks gathering signatures must feel very encouraged. 

Johnson offers an alternative to Seattle policymakers.

There are challenges that need addressing in Seattle and throughout the state. But with tax revenue growing at the current rate, it’s doubtful that more taxes will solve them. The better solution is to grow the economy and encourage job creation, which will continue expanding the tax base.

Makes sense.