Washington Business Summer 2018 | Washington Business

eye on business A Taxing Debate Kris Johnson, AWB President The Seattle City Council reversed course this spring and abandoned its plan to tax employers $275 per employee to help address the city’s growing homeless crisis. But the debate over the homeless problem — and the conversation about the controversial head tax — are far from over. The issue of homelessness still looms large in Seattle and many cities throughout the country. We need smart, engaged leaders who are committed to finding thoughtful solutions. Simply imposing another tax without thinking through the larger strategy was not the right approach, and the 48,000-plus voters who signed a petition against the tax obviously understood this. Hopefully, the council’s reversal will allow everyone involved to move forward and use their energy working on real solutions for Seattle and King County. Even though council members abandoned the misguided tax after they realized that public sentiment was largely against it, there will be lasting implications and lessons to be learned from this chapter in the city’s history. Weeks after the council voted to repeal the tax, it remained a topic of conversation with virtually everyone I talked with in Seattle and elsewhere. Employers throughout the state watched the issue unfold with a mix of disbelief — and even a little opportunism. The idea that council members would even consider levying this kind of tax on job creation seemed so obviously counterproductive that it left observers shaking their heads and asking the question: What are they thinking? Don’t they realize the employers they were going to tax are the same employers that have fueled Seattle’s economic growth? In other parts of the state, where the economy continues to underperform the Puget Sound region, local leaders would be pleased to see even a portion of Seattle’s growth. They’re looking for ways to encourage economic growth, not penalize it. There was also a sense of unease and concern. If this could happen in Seattle, could it spread to other communities? Ideas that start in Seattle sometimes make their way to the rest of the state. Or even other states. At the same time Seattle’s leaders were adopting and then repealing a head tax, several California cities were considering similar taxes. In Cupertino, home to Apple, the city council decided to delay the issue until next year. Mountain View, home to Google, was considering putting the issue to a vote in November. Seattle’s about-face may cause others to think twice, but this probably isn’t the last time the issue comes up for debate. Maybe the most optimistic response to the Seattle head tax came from places like Tacoma and Spokane, which responded by launching campaigns aimed at attracting business to their communities. Shortly after Seattle approved its head tax, the Tacoma- Pierce County Chamber released a video announcing, “No Head Tax Here.” The video fit into the broader “The Place for Jobs” campaign aimed at attracting good-paying jobs to Pierce County. In Spokane, Mayor David Condon said his city is contributing to a marketing campaign aimed at attracting businesses and professionals. If Seattle has tax fatigue, let’s hope that employers looking for a new home will find one within the state of Washington, rather than somewhere else in the country — or world. Better yet, let’s hope that Seattle leaders begin to work with employers to solve the challenges we all face. Helping employers grow, rather than penalizing them when they do, leads to job creation. And job creation ultimately leads to a growing tax base, prosperous communities and stronger families. summer 2018 15

Washington Business Summer 2018 | Washington Business | Page 15