Weighing options in Seattle: City’s not sure how to spend the money; others want to repeal the tax.

Five days after the Seattle City Council adopted the $275 per employee head tax, plans for spending the money are uncertain. And, if opponents get their way, voters will repeal the tax before it raises any money. At least that’s how it looks now.

KUOW reports that Mayor Jenny Durkan, who brokered and signed the head tax deal, does not endorse the council’s spending plan for the new money.

Seattle Mayor Jenny Durkan didn’t veto the head tax passed by the Seattle City Council earlier this week, but in a letter to council members last night, she criticized the council’s spending plan for the new tax.

Durkan said she predicts there could be fewer shelter beds than there are now — and far fewer permanent housing units than the council claims there would be.

Sent after Durkan signed the ordinance yesterday evening, the mayor took issue with how council members planned to spend the estimated $237.1 million in head tax revenue over five years.  

According to KOMO News,

That means the city has a huge new tax stream that takes effect in January, with no set guidelines on what it will pay for. For a public already nervous on how money is spent, this could add fuel to the fire.

“I think that says everything about how dysfunctional this has been, and it’s why folks across this city are frustrated when it comes to this council and this issue of homelessness,” said Jon Scholes, president and CEO of the Downtown Seattle Association.

That frustration continues to fuel discussion of a voter veto of the new tax. In the Seattle Times, an op-ed by KVI radio personality John Carlson urges voters to repeal the tax. He says Seattle has become 

A city with a deep divide — between City Hall and the increasingly angry majority of Seattle residents.

What can the people do? Fight back. Repeal the Deal. A recent poll showed that even a lower head tax than the one passed by the council this week was opposed by 58 percent of Seattle voters.

Seattle has an initiative and referendum process that exists for moments like this. A referendum to strike down an ordinance passed by the council requires less than 17,700 signatures of registered voters.

An initiative, which is the creation of a new law (perhaps a ban on head taxes, period) requires more signatures, almost 22,000 but six months to collect them. Once validated, the measure goes to the City Council, which can pass the measure into law (it won’t), reject it (likely), do nothing (a possibility), or offer an alternative (highly doubtful). If the council does one of the last three, the measure goes on the ballot “at the next regularly scheduled election.” At that point voters have the final word.

Carlson argues the signatures would be easily gathered. The Puget Sound Business Journal (behind a paywall) reports some business groups are considering the referendum route. KING 5 reports that the head tax debate has attracted the attention of key state legislators

Bloomberg’s Sustainable Business Summit brought together dozens of business leaders for an afternoon of discussion. Former Vice President Al Gore was the headliner, joined by Microsoft President Brad Smith. It was a day marked for talk about carbon taxes, not head taxes — but out in the hallway, State Senator Reuven Carlyle wanted to discuss the business climate change that has dominated discussions, and been red hot this week.

“I’m still a bit uncomfortable with it,” said the Seattle Democrat about the employee hours tax passed by the Council and Mayor this week. He says he’s been a staunch opponent of the proposal, which this week was approved in compromise form.

Preemption remains on the agenda.

Senate Minority Leader Mark Schoesler, (R) Ritzville, has said he will present legislation to ban the head tax in Olympia in January, just as the new law is set to take effect. Carlyle says he won’t go there, but acknowledges that further vetting is needed of the spending plan. “Prior to any kind of withdraw or any kind of preemption or anything like that – we need an investment plan that makes much more sense,” he said outside the conference.

Seattle Times business columnist Jon Talton also weighs in on the controversy.

Last Sunday, I wrote that a jobs tax on large employers would both put Seattle’s competitiveness at risk and potentially hurt the income stream that allowed City Hall to spend ever-growing amounts on social services.

He suspects the effects of the adopted tax will be realized slowly at first, then accelerate.

One thing is clear. The tax will not be paid by Jeff Bezos, the world’s richest person, or any other real or imagined toffs running the targeted companies. It will be “paid” by hiring fewer people here, making fewer investments, thus perhaps reducing overall taxes to the city. This is not sticking it to The Man.

No. And the debate continues. We should know soon whether it’s headed to the ballot.