Lawmakers in Olympia continue to work on legislation that would give King County enhanced taxing authority to fund housing, social services and public safety programs, a regional package related to the challenges of a growing crisis of homelessness. The House Finance Committee advanced SHB 2907 February 7. Negotiations continue. Here’s a portion of the House Bill Report describing the tax:
A county with a population of at least 2 million persons may impose an annual payroll expense tax on employers engaging in business in the county. The tax must be enacted by ordinance by the county’s legislative authority.
The tax rate must be at least 0.1 percent, but no more than 0.2 percent, of the employer’s payroll expense to the tax year attributable to work performed or services rendered by an employer’s employees in the county. The tax rate must be the same for all businesses; however, the county may impose a graduated rate that increases based on employee compensation. Payroll expense includes compensation, including net distributions and incentive payment.
Deductions from the payroll expense base are allowed for any payroll attributable to an employee with annual compensation of less than $150,000 and any payroll attributable to a grocery worker.
As we wrote earlier, the regional approach has garnered the support of some of the major businesses that would be affected. Whether or not the final legislation preempts the ability of local governments in the county (including the county) to impose additional taxes remains an unresolved issue. Negotiations continue in Olympia.
Meanwhile, members of the Seattle City Council have urged lawmakers not to preempt additional local taxes. Seattle City Councilmember Kshama Sawant has unveiled what most likely represents the high-water mark for any such additional city tax. The Seattle Times reports,
Seattle City Councilmember Kshama Sawant outlined her new proposal Wednesday for a tax on big businesses such as Amazon, saying she intends to introduce legislation for council consideration that would impose a payroll tax of 1.7% on the largest 3% of Seattle corporations, as measured by payroll in the city.
The tax would apply to about 825 companies (those with at least $7 million in annual payroll) and would raise $300 million a year, Sawant said. Supermarkets would be exempted. She said her plan would direct 75% of the money raised by the tax to build affordable housing and 25% to convert Seattle homes from gas and oil to electric systems.
This may be significant.
Sawant unveiled the proposal at a City Hall news conference. The actual legislation has yet to be written, and no other council members joined her Wednesday.
And, MyNorthwest reports on the opposition to the plan from a key regional politician.
Mayor Durkan, while noting that she does support the idea of a big business tax, said that she doesn’t see Sawant’s plan as a viable solution.
“I believe that big businesses can and should pay more to address our challenges, but this proposal that is six times bigger than the failed Council head tax proposal is not a plan that I can support,” she said Wednesday, predicting a “failed, divisive fight” should Sawant’s proposal move forward.
Geek Wire reporter Monica Nickelsburg writes that Sawant’s proposal is seen as unhelpful. Unsurprisingly.
The proposal, which hasn’t been written yet, complicates a plan to tax large companies’ payroll at the county level to fund housing and homeless services. That proposal has the support of Amazon, Microsoft, and other businesses, as well as Seattle Mayor Jenny Durkan.
The Washington Post noticed.
Today is Day 32 of the scheduled 60-day session. Things begin to move swiftly now.