Seattle’s head tax repealed, legality of vote challenged

On May 14, the Seattle City Council unanimously passed a tax of $275 per full-time equivalent employee for companies with gross receipts of $20 million or more that would raise an estimated $48 million per year for housing and homeless services. Shortly after, a coalition of businesses formed the No Tax on Jobs campaign and worked to gather signatures to have a referendum on the November ballot to overturn the tax.

Some 17,600 signatures were needed by the June 14 deadline to get the referendum onto this year’s general election ballot. By June 11, the campaign had gathered nearly 46,000 signatures. Seattle King County REALTORS® contributed $2,500 from its local issues fund to support the campaign and sent official petitions to all Seattle REALTOR® offices.

Overcome by the outcry of public disapproval, the Seattle City Council repealed the head tax on June 12 by a vote of 7 to 2. While the repeal was a win for opponents of the tax, the battle may not be over.

“There is no question that rapid job growth has sharply increased the demand for housing at every price point and has complicated the solutions available to aid the homeless,” said Seattle King County REALTORS® President Shane Davies. “However, the root cause is not job creation, but a failure to enable an adequate supply of housing – ownership and rental – to accommodate the new jobs.”

Shortly after the repeal, three local attorneys filed a lawsuit in King County Superior Court claiming that the Seattle City Council repeatedly violated the state’s Open Public Meetings Act in its haste to repeal the head tax. The suit claims that, in violation of the law’s requirements, the City Council did not give the required 24 hours’ notice before announcing its intention to conduct a repeal vote. Also, the claim alleges that there were discussions among council members and the mayor about repealing the head tax ordinance without public debate.

A second lawsuit filed on the same day also contends that the city broke the law by holding secret meetings to discuss repealing the tax. Unlike the first lawsuit, it wants the city to admit that it broke the law and a court to invalidate the council’s repeal vote.

These lawsuits open the door to the possibility that the repeal was illegal and so could be overturned. To ensure that head tax repeal referendum will still go to a vote of the people in the event the City Council’s repeal is overturned, the No Tax on Jobs campaign submitted the signatures to the city clerk. Most recently, Seattle City Attorney Pete Holmes offered to settle the lawsuit. If not settled, the trial date is set for June 2019.