Also this morning, the city council voted to repeal the employee hours tax, a $25-per-employee tax, paid by employers, that exempts employees who don’t drive to work alone. The tax pays for transportation projects; businesses and council members like Tim Burgess opposed it because, they said, it’s incredibly complicated to administer (not true) and sends a message to businesses that they aren’t wanted in Seattle (doubtful: Russell Investments brought its 1,100 employees to Seattle while the tax was still in effect).
Friends of Seattle sent a last-minute letter to the council earlier this week, pleading with council members to either vote against the repeal or to amend the law to merely suspend the tax temporarily and to track the economic impact of the repeal for a year.
The vote to repeal the tax was 8-1. Budget committee chair Jean Godden “held her nose” and voted for it, according to her office, in the interest of supporting a budget that the entire council worked together to pass. McIver, playing the crotchety realist until the end (his replacement, Mike O’Brien, starts in January) was the only vote against repeal.
McIver says he supports the tax because “it raises $4.5 million a year, we’ve got a $72 million deficit and we could use the income we already have. To be getting rid of income while we have a budget deficit is just digging a deeper hole. That just doesn’t make a lot of sense to me.”
Mayor-elect Mike McGinn has not yet returned a call for comment on the repeal, which he (along with Mike O’Brien) opposed.
Technically, the repeal won’t be law until the full council passes the budget on November 23; it will go into effect on January 1, 2010.
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Just another sign that our city council can be swayed by biz interests and thinks they can ignore the environmental and urbanist communities, even when the price tag ($91/year on average for businesses) is next to nothing…AND when we’re facing a huge budget deficit that could have been helped by keeping that $4.7M.
Council FAIL.
It’s not the form that’s complicated, it’s the accountability of tracking who is doing it and making sure that whoever you say is doing it is actually doing it.
And the definition of what defines ‘not driving to work alone’ gets pretty fuzzy. Does this count people who don’t drive in once a week? Do people who drive in once a week count? Someone may carpool part time… are they eligible? Who is and who isn’t? An HR department has enough to worry about without trying to figure out who they can claim for an exemption on a head tax.
Also, the boost in City Light power rates is going to deal a hit to businesses, so relieving business of a large, gratuitous expense is also a favor in return for spiking their utility costs.
@2: The more pressing point is that the $ is so low that many businesses don’t count or get caught up in details, they just pay it.
In reality, the $ amount should have been higher, so that more attention is paid to getting your employees to not drive alone to work.
Fix it, make it easier, make it more $, but don’t throw the tax mechanism out with the bathwater.
The two candidates who most campaigned on repealing the head tax — Rosencrantz & Mallahan — were defeated. And this is the follow through?
Wow, I’m so much happier doing business in Seattle now. NOT.
If the Council wants to help small businesses, get rid of the cumbersome regulations put on us by the DPD, etc, etc. But then, this has nothing to do with small business support, this is a handout to big business.
2010 City Council Scorecard:
Progressives – 1 (Mike O’Brien)
Conservatives – 8
It would be hard enough for McGinn to get things done if everyone had progressive values. Imagine if Obama had to deal with an 89% conservative legislature?
This tax is stupid.
They did the right thing.
If they want to fix the budget they can get rid of “waste of money” social programs and art funding.
1. Let the OPM staff burrow into the departments.
2. Sign an agreement with the state about DBT in the middle of a mayoral campaign that’s got DBT as the major issue.
3. Repeal a head tax — actually, it’s a SOV commuter tax — that was a central issue in the campaign and is part of the entire thrust of McGinn’s vision — and do it AFTER the voters chose McGinn and O’Brien.
Too bad Conlin and the others don’t show these kind of balls for progressive things.
This is why we need McGinn volunteers to create a permanent organization to work these issues and put the pressure on. McGinn and O’Brien can’t fight the downtown car lover establishment alone!
@7:
Arts funding is “waste money”? Are you daft? Seattle routinely triples (or better) it’s investment in arts funding. From a Stranger article a few weeks ago:
The tax is not stupid. It raises money for Bridging the Gap projects, which, by the way, means jobs for Seattle.
3. Tracking it was still a pain in the ass, and the formula for tracking it did need to be fixed. But really, there has to be better ways to bring in revenue and get people to bus in or carpool. The head tax didn’t really accomplish either.
@ 6. misha
Oh, when did Nick Licata become a conservative?
Tim Burgess, yes, but Nick Licata? Lefty Nick?
Right, or rather, wrong.
Publicola should be called !Fox network, where liberals who aren’t liberal enough are called conservatives. Just like the battle for the 23rd in
NY. Unbelievable.
Come on this is great news. McGinn’s selling point was that he will “fight against the Seattle establishment” for the regular guy. McGinns got his first potential fight on his hands. I wonder though how Nick Licata feels about being part of the Seattle establishment. Sweet – four more years of battles between the executive and legislative. Consider Mike McGinn as Greg Nickels repackaged.
Head tax revenue is not part of the general fund. Thus, the $70 million general fund deficit is not affected one way or the other. Head tax revenue is dedicated to transportation capital projects. These projects, however, will not be affected since revenue from the commercial parking tax far exceeds estimates. The combination of the head tax, higher commercial parking taxes and property tax increases passed as “Bridging the Gap” taxed many businesses three times for a government transportation service enjoyed by all. Elimination of the head tax in a very small way redresses a bit of that inequity at no cost to the general fund and no diminishment of “Bridging the Gap” transportation promises
I’m curious like @12 how McGinn will respond to what has to be construed as a provocation. Will he demur and say, a la Obama, “We only have one mayor at a time and it’s not for me to comment yet”? (Ha.) Will he publically turn the other cheek, forgiving but not forgetting? Will he demonstrate preturnatural political foresight and unleash a response tailor-made for this scenario, bloodying the bully’s lip on the first day of school?
Fixing a martini and kicking back to see what transpires.
Glad to hear the council has some common sense.
Russell Investments got a big tax break to entice them to move here. This is not a very good example to use in making your point.
McGinn is not the mayor yet, does not matter what he says, and he should expect more of the same when he is.
@8 – RE: the “downtown car loving establishment”
it will come as a surprise to you that Downtown property owners actually fund (100k per year plus money from the city and Metro) an organization that works to promote alternatives to commuting by SOV into the Center City. http://www.commuteseattle.org.
It may be convenient for you to assume all Downtown property owners are promoting SOV travel into the Center City, but your assumptions are divorced from reality.
I am so happy to see this repealed. I’m not against taxes. But this tax was stupidly administered. Once upon a time, city tax forms were a breeze to fill out. No longer. This head tax didn’t apply to me (I work alone, at home), but the bend over backwards formulae I had to complete to not pay it drove me nuts. Obviously, idiots who don’t run a business wrote this thing–I found myself talking like a Republican for the first time in my life.
I don’t mind paying taxes. Just make it easy for me to do it.
Repealing the head tax was the right thing to do, and I’m glad that the vote was so decisively in favor of it. We will still have 8-1 against with the new council.
The head tax debate is an example of a situation of ideology versus practical results. I, along with much more than 11.1% of the city, share in the goal of reducing traffic. But the question shouldn’t be whether a particular program fits into the anti-car point of view; it should be whether the program actually works, or whether the benefits justify the administrative costs imposed on businesses. Unfortunately, the issue has been turned into something of a litmus test. One’s position on the issue tells us whether one is a man/woman of the people, or part of the ephemeral “establishment”.
I’m glad to see that the Council is not simply repealing the tax, but looking to see what other revenue options there are for our transportation needs. I would also like to see the Council come back and write another tax that has the same objective as the head tax, but is better implemented.
@18 commuteseattle.org is so effective that the website doesn’t need to exist
“But the question shouldn’t be whether a particular program fits into the (desired) point of view; it should be whether the program actually works” is an excellent statement that should be cross-applied to every policy the urbanists propose.
Urbanists have great general ideas, but many of their specific ideas to move those general ideas forward miss the mark while being unnecessarily restrictive.
@2: The more pressing point is that the $ is so low that many businesses don't count or get caught up in details, they just pay it.
In reality, the $ amount should have been higher, so that more attention is paid to getting your employees to not drive alone to work.
Fix it, make it easier, make it more $, but don't throw the tax mechanism out with the bathwater.