Seattle business leaders prepare for key city council hearing on jobs tax; Mayor Durkan lays out her thoughts on the tax

Seattle businesses leaders plan to make their case against the city’s proposed jobs tax at a critical city council hearing next Monday. (Some background here.) On the Metropolitan Seattle Chamber of Commerce website the priority is clear, as is the call to members:

The Chamber continues to stand with member companies and partners to voice strong opposition to the Seattle City Council’s pursuit of a misguided tax on jobs…

Here’s how you can get involved:

Join us at a hearing at City Hall on April 23 on the proposed legislation. The hearing starts at 5:30 p.m., but those wishing to testify will need to arrive early and add their name to a list. Even if you aren’t interested in testifying, it is critical that we show up and show support for our businesses.

The Chamber lays out its concerns:

  • There is no plan, beyond the very broad proposal that 80% of the money will go to affordable housing and 20% will go to homelessness services.
  • Past Council action on homelessness does not inspire confidence that they would use new revenue wisely and with accountability measures that track outcomes.
  • A tax on jobs is not the answer—instead, we urge the Council to take a regional approach to this regional challenge and coordinate its work with the One Table effort.

Seattle Mayor Jenny Durkan also has concerns. The Seattle Times reports,

Seattle Mayor Jenny Durkan is willing to work with City Council members on a new tax on businesses to help address homelessness, but she wants them to consider her views as they craft a measure that could raise tens of millions of dollars a year.

Small businesses should be wholly exempted, the tax money should be spent in line with a regional plan on homelessness and an independent board should provide oversight, she wrote in a letter to the council’s nine members Tuesday, making her most specific comments to date on the issue.

The letter should be read in its entirety. The Times writes,

Some business people were alarmed when the task force suggested the council might want to impose a flat “skin in the game” tax of a few hundred dollars on small companies, rather than completely exempting them.

The council should reject that option and should also exempt nonprofits, member organizations and health-care providers, Durkan wrote.

There should be tax breaks for companies that make private investments in homeless services and affordable housing, and a board appointed by the council and mayor should oversee how the money is spent, she added.

MyNorthwest reports small business owners remain on high alert.

If there was one cohesive message from Seattle businesses to the city council, it’s that they want to be part of homelessness solutions. They have little, if anything, left to give the city, however.

…The city is currently considering a head tax on employers, among other revenue options. All the businesses at a council committee meeting Wednesday argued a similar point: taxes and regulations in Seattle have become so steep, they are struggling to survive. Many conveyed that they believe the head tax is already a “done deal.”

The MyNorthwest story has several telling anecdotes and testimony. We thought Steve Hooper with Kigo Kitchens made an effective point.

He points to an infamous study out of the University of Washington. That study found Seattle’s rising minimum wage resulted in fewer hours and jobs for employees. It is sometimes referred to as the “Jacob Vigdor study” after one of the researchers.

“We’re living the Jacob Vigdor study in our restaurant chain,” Hooper said. “When we started four years ago, we had 13 people working lunch. Today we have nine. That is the Vigdor study. What was 60 hours of work to serve 250 people is now 45 hours of work … It’s because we’re business people and we solve problems. And one of the problems that you presented us with is ‘do more with less.’ So we’ve done that.”

“This is straws on the camel’s back,” he said. “Will this be the straw that knocks over my business? Probably not. Maybe for Destiny [owner of another small business testifying] and maybe for other small businesses like ours. The question is really one of threshold. You continue to layer things on and it gets harder and harder to make the whole thing make sense.”