This afternoon the Council adopted eight amendments to its proposed income tax on residents with earnings over $250,000. Most were cosmetic; a few make substantive changes.
The notable amendments are:
- one offered by Council member Johnson to require the city’s Finance Director to submit a report to the Council by November 15, 2018 summarizing the administrative rules adopted by FAS for implementing and enforcing the income tax. Since collection isn’t expected to start until April 15, that would give the Council five months to review and weigh in on those rules.
- one clarifying that all future changes in the permitted uses of the income tax revenues must be approved by the City Council.
- one raising the income tax rate from 2% to 2.25%, which would raise projected revenues by an additional $15 million. Council member Johnson proposed this, after discussions with community members, because of concerns that Congress will severely cut Medicaid. He and his staff estimate that there is around $10 million of critical funding at risk, so he is asking for $15 million to play it safe. Given that none of the original $125 million in projected income tax revenues had been specifically allocated, it seems strange to be adding more money to the pool also without a plan. Nevertheless, the Council members present (Burgess, Johnson, Sawant, Herbold, Bagshaw and O’Brien) all voted to adopt this amendment.
- one by Burgess that specifically calls out the Seattle Preschool Program and the 13th Year Promise Scholarship program as currently underfunded. These are two worthy programs among a long list of important, underfunded ones, but this amendment is noteworthy because the Seattle Preschool Program is Burgess’s pet cause, and the 13th Year Promise Scholarship program is Harrell’s.
- a rewriting of the permitted uses of the income tax revenues, adding in “addressing the homelessness crisis,” removing the generic and vague “public services” but adding in as a last-minute amendment by Bagshaw “funding for mental health and public health services.”
All of these amendments were adopted by unanimous vote.
Another proposed amendment from Council member Gonzalez that would have added “civil legal aid for immigration proceedings” to the list of permitted uses (one of her pet causes) was withdrawn from consideration — perhaps because Gonzalez was not present today (we might see it return next week).
Council staff will incorporate all of these amendments into a cleaned up version that will be offered up next Wednesday in the next committee meeting, at which point the Council is expected to vote it out of committee. It will then come before the full Council on Monday, July 10, for final adoption.
The ease with which the Council jacked up the tax rate today without any actual plan for how either the original $125 million or the additional $15 million would be used, as well as their new requirement that the city actually tell them how it’s going to work in practice five months before they start collecting taxes, reinforces that the details are unimportant to the Council at this time. Their priority is adopting an ordinance that will be the vehicle for challenging in court the state’s prohibitions on income taxes. Nevertheless, Council members have worked hard to load it up with personal favorite programs:
- Seattle Preschool Program (Burgess)
- 13th Year Promise Scholarship Program (Harrell)
- Mental health services (Bagshaw)
- Legal aid for immigrants (Gonzalez)
- Green jobs and carbon reduction (O’Brien)
All this on top of the two original goals for the bill that Herbold and Sawant (and the Trump-proof Seattle Coalition) proposed: offsetting more regressive taxes, and protecting Seattle from Trump’s proposed steep cuts to federal funding.
It’s ironic, but not entirely surprising, that today’s amendments focused on how the money can be spent and not on how the tax will be implemented, given that the bill has a long, difficult road ahead of it before either will actually matter. It’s hard to argue against any individual proposal the Council members are putting forward, as they are all worthy causes, but it would be nice to see them put as much effort into ensuring the tax will be implemented well as they are into what to do with the windfall of new revenues.