Committee rejects Seattle mayor's plan for smaller head tax

SEATTLE — A Seattle City Council committee has rejected a substitute amendment that would have slashed the proposed head tax in half and voted 5-4 for the original head tax to now move forward to the full city council.

>>RELATED: Seattle homeless and the head tax proposal: A timeline of the city's response

On Thursday, Seattle Mayor Jenny Durkan had proposed a smaller plan for the tax on large employers.

Rather than impose a so-called head tax of about $500 per employee, per year on for-profit companies that gross at least $20 million per year in Seattle, Durkan's proposal, amendment 17, would have charged $250 per head.

Rather than be replaced by a 0.7 percent payroll tax in 2021, Durkan's tax would remain unchanged for five years and then would need to be renewed.

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The amended plan would have raised just over $40 million a year for affordable housing, homeless shelters and waste removal.  The original plan would raise $76 million.

Durkan's compromise had the support of council members Sally Bagshaw, Bruce Harrell, Rob Johnson and Debora Juarez, but the five other council members -- Mike O’Brien, Lorena González, Lisa Herbold, Teresa Mosqueda and Kshama Sawant -- voted against it, so the original plan with the $500 per employee head remains on the table.

The opposing council members said Durkan's proposal provided too little money for affordable housing.

The committee then voted -- again, 5-4 -- to approve the original head tax plan. It will now move forward to the full city council for a vote that will reject it or pass it into law.  That vote is expected on Monday afternoon.

In that vote, the proposal could pass or fail with a majority of five votes, but in that case, the mayor has the option of a veto. But if six council members vote in favor of the head tax, a veto would not be possible.

In reaction to the proposed head tax, Amazon said it stopped construction planning for a new building at Seventh and Blanchard and is exploring options to sublease a space to another company in a tower being built at Rainier Square that the company planned to occupy itself. The spaces were for 7,000 new Amazon jobs.

Cox Media Group