The members of the city-appointed Pedestrian Master Plan Advisory Group, along with the advocacy director of the Cascade Bicycle Club, the head of Great City, and the president of Friends of Seattle, just sent a letter to Mayor Greg Nickels and all nine members of the city council opposing a proposed (and probably inevitable) repeal of the employee hours tax, AKA the “head tax.” The tax is a $25-per-employee charge paid by employers, which includes an exemption for any employees who don’t drive to work alone.
The letter reads, in part:
TweetFunding from the Head Tax (also called the Business Transportation Tax), a tax which is relatively insignificant for individual business, is an important source of funding for transportation improvements that help to promote more responsible forms of transportation, such as biking and walking. While $4.7 million is not much of SDOT’s budget, it makes up a large percentage of total funding for pedestrian and bicycling projects in Seattle. Because of the incredible infrastructure deficit, especially in the Southeast and North parts of the city, and the fact that a prioritized project list has been identified through the draft Pedestrian Master Plan, it seems clear that there is a use and a specific need for these funds. [...]
The Head Tax is one tool this city has to reduce [vehicle miles traveled, i.e. driving] by creating an incentive for people who work downtown to use alternative modes of transportation to get to work and creating a revenue source for pedestrian improvements. The Head Tax prices parking appropriately and creates funding for responsible forms of transportation. It is good policy to support a sustainable transportation policy for Seattle.
We recognize your interest in making a statement that supports businesses as they struggle in these difficult economic times. But this is not a symbolic gesture. It has serious consequences for the broader agenda of making our city more sustainable.
It is for these reasons – the tax’s use as a VMT-reduction tool, the fact that the tax is not a financial burden on businesses, and the funding for responsible forms of transportation that will be lacking – that we do not support the proposal to repeal the Business Transportation Tax.
Repealing the head tax is almost criminally irresponsible. It will make absolutely no difference to any job location decisions — $25 a YEAR means nothing, even to an employer with 1,000+ employees — and it cuts money that will help keep Seattle from falling further behind the curve on transportation. Tax sources are limited. To cut one that doesn’t do any harm, and does some reasonable good, is crazy.
I can’t believe this has become an issue. Idiotic, even by the standards of our lame local debate.
So far, only one mayoral candidate has shown any kind of leadership or responsibility on this “issue.” From the start, Mike McGinn has opposed a had tax repeal. Nickels oposed it to, but flip-flopped once Mallahan started trying to make an issue out of it.
My 2¢.
I don’t understand. Any candidate should understand that supporting a repeal of this tax will lose them the environmental vote. Is supporting this how Nickels proposes we reach our Kyoto goals? To top it all off this is financially irresponsible as well! Sometimes I hate politics.
If it’s not a burden on businesses then it’s really not much of a VMT reduction tool now is it?
If it is such a non-issue financially for businesses, then how does it create an incentive?
What is CBC going to do about it? Rescind its endorsement? Otherwise, its name is all over his lit no matter what they say.
@4
By paying for the pedestrian master plan for one…
@6: That’s all well and good, but you did not address my point — the tax cannot be an incentive while not impacting businesses enough to cause that incentive.
If it is purely a revenue stream then so be it — people should come out and say that instead of trying to add additional pretty “reasons” why the tax is so great.
You sound like a candidate for office — don’t have an answer so just ignore the question and move on to something else….
@ 7 – It would be more of an incentive if the tax could be increased from a meager $25 to say $100/$200 per employee per year. Pedestrian advocates asked Council to do this last year, but they do not have the political will to do so.
Agree with Good Grief that the head tax can’t be an incentive if it’s also not a burden. But it is a revenue stream, and that’s plenty valuable.
And frankly, the entire notion that tax policy ought to be all about incentives & disincentives is a broken concept of policymaking. Use taxes to collect revenue. Use regulation & policy to impact behavior. It’s always going to be more expensive & convoluted to “incentivize” (profit included!) than to just pass a freaking regulation. (Look at housing policy for a prime example.)
So no, the head tax doesn’t incentivize anything. And it doesn’t burden anything. But it collects significant revenue for good policy goals. And that’s more than enough to ask of a tax.
The head-tax program IS an incentive insofar as employers don’t have to pay the head tax for employees who use alternative transportation modes. Sure, a $25 tax exemption is a very small incentive, but it’s something.
Incentive/Reward? Actually I see the $25/employee in an SOV as the fee/tax for commute planning/implementation. The ability of employers to not pay the tax as employees move to commuting rather than SOV use is more of a reward and a recognition that at some point, the tax/fee goes down to next to nothing which would mean success. So it also acts as a measurement of success of the use of alternate transportation. And measurements of success are usually met with applause…kinda like cigarette taxes revenue falling as smokers quit.
Fat-tailed @ 9 – Tax is all about incentives and disincentives. Seriously. It would be nice to have it be something pure and unpolitical. But it never has been and never will be.
My former employer tripled the size of their employee bike cage, and I have to believe that was partly incentivized by the $25 tax. Cascade’s endorsement of Nickels is a joke.
Yes, Redmond imposes a higher head tax. The main funding for TriMet is a similar tax. For Seattle, the primary issue is the lost revenue. The secondary issue is the disincentives it provides to either employ more workers or have them use alternative commute modes. Note that Nickels/Drago would have the city cover $930 million of AWV related costs. The deep bore legislation also asked “Seattle area property tax payers to cover “cost over runs”. What taxes will be raised to cover those costs and how related to transport will they be?
Hmmmmm… did Transportation Choices Coalition sign on to the letter?? Seems suspicious to me if they did not.