A proposed tax on businesses to help address homelessness in Washington state was passed out of committee, moving it closer to a full floor vote.
HB 2907 would allow counties with a population of at least 2 million to levy up to a 0.2 percent tax on the payrolls of businesses that pay their employees more than $150,000. King County is the only county in the state that meets the population requirement. If approved by the Legislature, the King County Council would still need to approve such a tax.
King County Executive Dow Constantine said the legislation could generate some $121 million annually for housing, homelessness, public safety and behavioral health services. If approved, the tax would last 25 years.
The House bill was debated last week at hearings of the Finance Committee. The bill’s prime sponsor is Rep. Nicole Macri (D-Seattle).
“This bill represents a regional approach necessary to address homelessness in King County, the county that is experiencing the worst crisis around homelessness,” Macri said Feb. 4.
Macri said the bill represented a step in the right direction. The bill was ultimately passed with a do-pass recommendation Feb. 7 with an 8-4 vote along party lines.
Rep. Drew Stokesbary (R-Auburn) questioned why the bill would only affect King County. Macri said the bill could be replicated and scaled to other areas of the state.
Before the vote Feb. 7, Stokesbary proposed several amendments, which were all rejected. They included provisions that would ban supervised drug consumption sites and camping within 500 feet of schools and parks, along with restrictions on how money could be spent. Democrats on the committee said those details should be worked out as part of the negotiation process.
Republicans said they were additionally concerned about what they viewed as stakeholders having influence on the process.
“We should not cede our authority as legislators to those stakeholders. We should not let them negotiate with each other and tell us what to pass,” Stokesbary said. “We should negotiate with each other in consultation with them, and tell them what we’re going to pass.”
Rep. Noel Frame (D-Seattle) disagreed, saying the Legislature frequently consults with stakeholders before drafting legislation.
However, at the Feb. 4 public hearing, it appeared at least some stakeholders had been left out. The mayors of Auburn and Kent both testified, saying they learned about the bill through the news. Kent Mayor Dana Ralph said she was feeling “frustration. There’s a lot of words that we can use about where we’re at today.”
Ralph said she hoped cities in King County would be included in the process moving forward. King County Councilmember Reagan Dunn also penned a statement against the proposal.
“Punishing local workers and employers for their talent and success is destructive for our entire region and fundamentally un-American. We’ve seen this type of money grab fail before and it should fail again,” Dunn said.
In 2018, the city of Seattle approved and then repealed a similar head tax within a month. It would have levied a $275-per-employee tax on businesses grossing more than $20 million annually. It would have generated $47 million annually.
However, some businesses that would have presumably been taxed under the state’s proposal did show up to support the head tax. During the public hearing, Expedia Group’s Government Affairs Manager Richard de Sam Lazaro said the company approved the bill. The Seattle Times reported other large corporations like Amazon, Alaska Airlines, Costco, Microsoft and Starbucks had also been receptive to the bill.
Additionally, Samantha Conley of SEIU 199NW said their union was in support of the bill.
A report released last month by consulting firm McKinsey and Company states that the county should be spending between $450 million and $1.1 billion each year for 10 years to fully address the homelessness crisis.
“We need more housing now, and we need more services for people in crisis,” Macri said.
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