Spotlight — City Proposes New Tax to Solve Homelessness Crisis
More than two years ago, Seattle and King County declared a state of emergency due to increasing rates of homelessness. Since then, not much has been accomplished in the effort to reduce these rates, largely because response to the crisis remains fragmented. All Home is an organization in King County theoretically in charge of coordinating services, yet it has no control over how public money is allocated. Without a central authority, little progress has been made, which prompted the mayor of Seattle and the human services director of King County to call for more central authority. Moreover, All Home expressed frustration over its apparent impotence.
Meanwhile, the number of people experiencing homelessness in King County has doubled over the past four years, and many people are anxious about the need for change. Recently, the Seattle City Council announced a new proposal to impose a 3 percent tax on the city’s businesses earning the most money. The proposal replaces City Councilor Mike O’Brien’s suggestion to create an employee head tax to create an increased budget for housing and supportive services. While this suggestion failed, the city council passed a resolution to create funding another way and established a Progressive Revenue Task Force to figure out a solution.
The New Homelessness Tax Proposal in Seattle
The new proposal is backed by O’Brien and several other city councilors, as well as housing advocacy groups pressuring local government to find a solution. Under this proposal, any business making more than $20 million annually in taxable income would pay 26 cents per hour for each person employed in Seattle or $500 per employee per year. The new tax would begin in 2019 and end in 2021, replaced by a flat 0.7 percent tax on the entire payroll, which means companies pay more for people making a higher salary.
The new tax has some benefits over the old proposal. Many smaller companies claiming such a tax would severely cut into profits will no longer be affected. In total, only about 500 businesses in Seattle meet the minimum income threshold to be taxed. The newest proposal doubles the threshold from the original $10 million to about $20 million. While relatively few companies would be impacted, the tax is expected to provide the city with about $75 million a year in additional income to drive solutions for the homelessness emergency.
The Plan for Using Tax Money to Address the Homelessness Crisis
According to the city’s plans, about 75 percent of this money would go directly toward construction of affordable housing. An additional 20 percent would fund the Housing and Human Services department to create additional outreach programs, such as emergency shelters and tiny house programs. Public health and workplace stability are also key focus areas for this spending. In addition, more than $3 million is intended to provide black water removal, temporary bathrooms and garbage disposal for the tent communities around Seattle.
According to current plans, the new tax would fund construction of more than 2,000 new affordable housing apartments, provide support for multiple encampments, create hundreds of new shelter beds and bankroll 100 tiny homes. In addition, the money would fund five hygiene centers and a mobile health van.
A Growing Need for More Centralized Homelessness Strategies
The Seattle Metropolitan Chamber of Commerce, which is skeptical of the tax, has called into question the City Council’s accountability when it comes to services for the city’s homeless population. This sort of criticism is not unexpected given the lack of centralized authority in establishing services in the past few years. Before raising more money, however, it may make sense to create a coordinated approach to ending homelessness.
With the possibility of an additional $75 million funneling into the government to address the issue of homelessness, All Home called a two-day discussion with various political leaders throughout King County to discuss streamlining the authority to use this money. The conversation focused largely on the challenges involved with taking such a fragmented approach to ending homelessness with an emphasis on the progress already made and the shifts that would be possible with a more coordinated approach.
Another complicating factor is a task force created by Seattle’s mayor and other local officials to formulate recommendations for addressing the causes of the current crisis. While the task force report may help create a centralized approach to ending homelessness, it highlights the existing fragmentation since the report was completed independent of All Home’s work and the plan regarding how to use the money raised by the new tax.
