The “Amazon Tax” bill is designed to be immune to referendum

In all the pomp and circumstance that Council member Sawant orchestrated for the rollout of her “Amazon Tax” bill, she neglected to mention one important point: it was specifically written so that it would not be subject to referendum. And Sawant invoked the COVID-19 emergency to do it.

The City Charter lays out the power of referendum reserved for the people, and the cases where it may not be invoked (emphasis mine):

The second power reserved by the people is the simple referendum, and it may be exercised and ordered (except as to ordinances necessary for the immediate preservation of the public peace, health or safety, or providing for the approval of local improvement assessment rolls, or for the issuance of local improvement bonds), as to any ordinance which has passed the City Council and Mayor (acting in their usual prescribed manner as the ordinary legislative authority of the City), either upon a petition signed by a number of registered voters equal to not less than eight (8) percent of the total number of votes cast for the office of Mayor at the last preceding municipal election, or by the City Council itself without petition.

This makes sense. In an emergency, we want elected officials to be able to take decisive action. The check on the Mayor’s emergency powers is the City Council, which can accept, reject, or modify her emergency proclamations. And the check on the Council’s power to pass emergency legislation is the Mayor’s veto pen.  Subjecting either of those to long, drawn out election processes is not in the city’s best interest during emergencies.

On March 3, Mayor Durkan issued a Proclamation of Emergency, which says:

I have done so to such an extent as to require me to exercise the authority assumed in Section 1 and to take the extraordinary measures in Section 3 in order to prevent death or injury of persons, and to protect the public peace, safety and welfare, and to alleviate damage, loss, hardship or suffering.

Now here’s the text of Sawant’s proposed payroll tax bill.

First, it specifically cites the Mayor’s emergency declaration. “On March 3, 2020, the Mayor proclaimed that a civil emergency exists in the City of Seattle related to the COVID-19 virus.”

Second, it specifically declares that the bill is emergency legislation for the protection of the public health, safety and welfare: (emphasis mine)

Section 15. Based on the findings of fact set forth in Section 1 of this ordinance, the Council finds and declares that this ordinance is a public emergency ordinance, which shall take effect immediately and is necessary for the protection of the public health, safety, and welfare.
Section 16. By reason of the findings set out in Section 1, and the emergency that is hereby declared to exist, this ordinance shall become effective immediately upon its passage by a 3/4 vote of the Council and its approval by the Mayor, as provided by Article IV, subsection 1.l of the Charter of the City.

By the terms of the Charter, this makes it immune from a potential referendum.

In fact, the bill gives away the game in an earlier section dealing with the fact that Sawant and Morales want to borrow $200 million from other city coffers to spend this year, and pay it back next year with revenues from the new tax — which would be impossible if a referendum were successful:

O. The interfund loan contemplated in CB 119773 is necessary to provide the immediate cash assistance through CB 119774 and is dependent on the tax authorized by this bill going into effect immediately and not being overturned by referendum.

P. As a result of the City having already fully committed the City’s General Fund through the 2020 Adopted Budget and of the anticipated decrease in General Fund revenues, other means of repaying the interfund loans authorized by CB 119773 would not be feasible if the tax authorized by this bill were overturned by referendum.

The bill authorizing the interfund loans has identical language and also would be referendum-proof.

You could make a decent argument for this, if the bill only imposed a new tax to raise necessary revenues for the COVID-19 crisis. At the very least, we could have a robust policy discussion as to whether it makes sense as a source of emergency funding. But the bill doesn’t do that; it creates a new $500 million payroll tax in perpetuity, of which only the first $200 million raised in the first year will go to COVID-19. This is a brazen political move: leveraging a public health crisis to protect her highly controversial “Amazon tax” from the will of the voters — and not being upfront that she’s doing it.

Two years ago, the City Council passed the infamous “head tax,” then quickly repealed it after polling showed that a voter referendum effort on the tax would likely succeed. So it should not be surprising that her new tax proposal is structured to avoid meeting the same fate.

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One comment

  1. I believe that I have read some other examples where a government was using the COVID 19 as a cover for new laws. Maybe this is not the same level so it is not a fair comparison (at least for folks that support the tax), however, for some of us that support good governance, it does highlight some issues that worry me.

    The nationalist government in Hungary passed a law Monday granting sweeping emergency powers that Prime Minister Viktor Orban says are necessary to fight the coronavirus pandemic.
    Those powers include sidelining parliament and giving Orban the power to rule by decree indefinitely. The law would punish those who spread false information about the pandemic with up to five years in prison.

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