This morning the Progressive Revenue Task Force held its first meeting, and mostly just decided what its other meetings will be about.
The task force was created by resolution of the City Council after it voted down a proposal to institute an employee hours tax (or “head tax”) on large businesses in Seattle. Last month it announced the members of the task force, after an application process concluded.
The original remit for the task force, as per the resolution, required it to deliver recommendations to the Council by February 26. Task force co-chair Lisa Herbold began by noting that they have already recognized that is not enough time, and the work plan has the group finishing its recommendations by March 1st. But that date may also be in jeopardy: as the task force discussed the work plan, it became clear that they needed to get educated on several topics and issues before they can proceed, including:
- the revenue growth trend of the business community;
- where the problem of homelessness is coming from and how to address it in an equitable way;
- demographic issues: who is moving into and out of the city, and what their income levels are;
- how the changes in the recently-passed federal “tax reform” bill affect local businesses and their tax burdens;
- administrative challenges with previously-imposed employee hours taxes;
- a comparison with other cities, both with and without employee-hours taxes;
- a primer on various forms of taxation and levy structures, how “progressive” or “regressive” they are, and how one determines whether a tax is progressive or regressive. Council staff did distribute copies of this white paper from the Center for American Progress that lays out several potential progressive revenue sources for municipal governments — as well as several regressive ones to avoid.
Given the enormous amount of work to do over the next two months, Herbold suggested creating two working groups: one focused on the revenue sources, and one on the spending plan. On that note, task force member Lisa Daugaard pointed out that the draft work plan called for working on the revenue plan before discussing the prioritization of needs; she saw that as backwards, and noted that clarity on the “why” of the proposal would likely make it more palatable to members of the business community. The task force agreed to adjust the plan so that the needs are discussed at every meeting rather than being saved for the end.
Task force member Dan Malone of DESC also pointed out that they need a plan for interacting with the county-wide “One Table” group of governments looking to coordinate response to the homeless crisis.
There were two surprises at the meeting. The first was that despite agreement that decision-making, including approving the final report, will be by a majority vote (though there can also be minority reports), there was no discussion of how to handle the obvious conflicts of interest of the vast majority on the task force. Several members represent non-profit service providers that stand to gain considerable funding from a new tax, and a few members (three by show of hands) represent businesses that would likely pay an employee-hours tax as it was originally proposed.
The second surprise was that all pretense was dropped that the task force is actually open to alternatives to a head tax. Co-chair Lorena Gonzalez said explicitly that she sees other revenue proposals as “additive” rather than a potential replacement. We may get other taxes as well, but we’re certainly getting a head tax.
The next task force meeting is January 18, 9-11am, in Seattle Municipal Tower room 1756. The two work groups may meet before then, but meetings have not yet been announced (to be fair, the work groups were just formed this morning).
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