Seattle City Council Budget Committee 712020 Session I

This is Elizabeth.

Just to let you know, we are ready to go when you are.

Wonderful.

Good morning, everyone.

Today is July 1st, 2020, and the Select Budget Committee, welcome to order.

It is 10.01 a.m., and I'm Teresa Mosqueda, chair of the Select Budget Committee.

Will the clerk please call the roll?

Strauss.

Council President Gonzalez.

Eric.

Council Member Juarez.

Here.

Lewis.

Present.

Morales.

Here.

Peterson.

Here.

Sawant.

Here.

Chair Mosqueda.

Here.

And I believe back to Council Member Strauss.

Council Member Strauss.

Present.

Thank you.

Abe present.

Thank you, Madam Clerk.

Colleagues, we have a long agenda today.

Again, this is Session 1 at 10 a.m.

Session 2 starts at 2 p.m.

Session 1 is devoted to the conversation around progressive revenue, and in the afternoon, Session 2 will be devoted to the 2020 rebalancing package.

As you all have seen the agenda, it is quite lengthy, and we are going to get through as much as we can to make sure that folks also have a short window for a lunch.

I want to make sure that we are taking care of ourselves as we're also trying to take care of the city.

If there's no objection, today's agenda will be adopted.

Hearing no objection, the agenda is adopted.

Colleagues, we have a number of folks signed up to testify.

As we mentioned at the beginning on every meeting, we will have public testimony.

Unfortunately, we are probably not going to be able to get through everyone.

So I want to thank everyone in advance who has called in to testify.

If we are not able to get to you, there is another opportunity to testify at 2 p.m.

And we encourage you to do so or send us your written comments.

We do receive those.

directly from our clerk, and we really appreciate those.

On today's agenda, we will have the opportunity to hear from folks for the next 25 minutes and encourage folks to try to wrap up.

When you hear the chime, there will be a 10-second chimer to let you know that your minute time period is running up.

We are continuing to try to make sure that everyone gets a chance to speak, and in doing so, we have tried to divide our public testimony into two parts.

at the beginning at the 10 a.m.

session and the beginning of the 2 p.m.

session.

Again, the 2 p.m.

session sign up starts at 12 noon if you would like to sign up for that or if you didn't get a chance to talk today.

I will call on the speakers at one at a time, I'm sorry, three speakers at a time in the order which they've registered and hearing from Seattle residents will be our priority and then if time permits we will hear from the remaining speakers.

If you get to the end of your time and you have not had a, if you get to the end of your time, please do hang up and call back in to the listen in line or listen in at Seattle Channel or on the online streaming options.

You will hear you've been unmuted from our IT folks.

That's your cue to start speaking.

Thanks so much for all of your time and for weighing in via this electronic opportunity so that we can hear from as many people as possible in the public as we also keep our social distancing practices in place to protect folks from contracting COVID unintentionally.

So here we go.

We have the first three speakers that are present are Daniel Cavanaugh, Sean Butterfield, and Dawn Blakeney.

Daniel, good morning.

Hey, my name's Dan.

I'm a nursing student and a renter in the Central District, and I'm here to urge the City Council to pass a strong Amazon tax and to vote yes on the amendments from council members who want to strengthen it.

You know, we're facing down the barrel of a gun, of a major economic crisis, right?

We just had the largest wave of layoffs in U.S. history and a massive wave of foreclosures and evictions is on its way.

and you know people are already feeling the pain.

I've talked to thousands of people in my neighborhood and at protests and the support in Seattle for a big business tax is overwhelming.

Overwhelming.

We've collected 27,000 signatures in just a few weeks to take back to Amazon to the ballot.

People are already feeling the pain and if anything people feel like 500 million dollars is not enough.

So you know No sunset clause, add the green new deal, fully fund 500 million, no excuses, pass a strong Arizona tax.

Thank you very much.

Sean Butterfield, welcome.

There's three in the members.

Do you mind starting over Sean?

Hi, my name Absolutely.

My name is Sean, and I'm a home care aide in District 3 and a member of Socialist Alternative.

I'll tell you, when you're out collecting signatures in the wealthier part of Seattle, you get a few people who like to say, no, thank you.

I'm OK.

And after a while, that really gets to me, this parade of comfortable older white men telling me how OK they are.

Yesterday, I finally said, listen, sir, I know you're okay.

I'm not worried about you.

I'm worried about the working class people of color struggling to afford the rent at one of the properties you own.

I'm worried about my friends' kids who are switching schools every year while their parents find a place they can afford to live.

This isn't about you.

So please take a moment to think of someone other than yourself and sign this petition." Well, of course, he didn't and walked away in a grieved huff, but the QFC employee standing nearby appreciated my words and they signed. And I'll tell you what, we've got about 27,000 signatures like hers and counting. And far more often the criticism I hear is that this is not enough, that it doesn't match the scale of the problem we're facing. And they're right, of course, but it's a big first step. The rightness of this movement of taxing big business to pay for the needs of our communities, especially in this time of crisis, is obvious to anybody who will stop to think about it.

Thank you very much, Sean.

Don, good morning.

My name is Don.

Good morning, council members.

My name is Don Blakely, and I'm speaking today on behalf of a coalition of Seattle business organizations who represent thousands of companies and hundreds of thousands of jobs in the city of Seattle.

Earlier this morning we submitted a letter for your consideration that outlined a strong opposition to the legislation before you today.

Seattle's current unemployment rate is approaching 14 percent.

80,000 jobs have been lost in the city of Seattle since March compared with just 5,000 over the two years during the Great Recession.

We urge you to utilize the rainy day fund to sustain basic city services and not fund new programs.

Seattle faces its worst economic conditions in nearly 100 years and together we must focus on recovery and not taxing the very jobs that are evaporating.

Thank you.

Thank you very much, Don.

The next three speakers are Alicia Lewis, Will Toastburn, and Katie Garrow.

Welcome, Alicia.

Hi, my name's Alicia Lewis.

I'm active in the TaxAmazon movement, and while I'm excited this legislation to tax Amazon's being reviewed, we should be honest that the only reason this has been brought forward is because of the pressure of our movement, which has collected 27,000 ballot petition signatures in the last month to tax Amazon for affordable housing and to create a major jobs program.

Since January, thousands have participated in our action conferences, marches, and protests, and over 500 have volunteered with our campaign to phone banks, deliver ballot petitions to their neighbors, and canvass in front of grocery stores.

I urge the city council to stand with our movement and approve all of council members who want amendments for a strong Amazon tax with no corporate loopholes.

If you fail to do so, our movement is prepared to submit our signatures and bring our tax to the ballot.

We'll be holding a mass action conference next Wednesday, July 8th.

to assess what the council decides and vote on whether to bring our initiative to the ballot.

I urge everyone listening to join.

Thank you.

Thank you.

Our next person is Will.

Welcome, Will.

Hi, thank you, Council.

My name is Will Toastburn, and I'm here to speak on behalf of Solid Ground.

We're supporting the Jump Start Seattle Plan and additional efforts to maximize progressive revenue for human services and housing.

These efforts are a key step in helping Seattle recover and rebuild from a global pandemic ongoing housing crisis, and embedded systems of racism that continue to destabilize and oppress Seattle communities.

Solid Ground's mission, including as an affordable housing provider, is to end poverty, undo racism, and other forms of oppression that cause it.

To make sustainable progress in this work, the communities and providers we work in solidarity with must have a significant increase in public resources.

Further, the way we raise those resources must come from progressive sources.

Otherwise, we can further the oppression we are aiming to undo.

Don't Start Seattle moves us in the right direction.

Further, we reject any measures to delay the passage of this plan, including requiring a popular vote.

The correct time to increase progressive revenue for housing and human services was years ago.

You can continue.

It is time for us, for you all as the elected leaders of this city, to take meaningful action that will result in change and progress for Seattle's most vulnerable.

Thank you.

Hey, thank you so much, Will.

Katie Giro, welcome.

Hi good morning council members.

Katie Garrow I'm the Deputy Director at MLK Labor.

Our organization represents more than 100,000 workers in 150 affiliate unions here in King County.

I'm also a member of Labor's Local 242 construction union and both my individual union and the Labor Council have endorsed Jump Start Seattle.

And I'm here today to express our overwhelming support for this policy.

More than 80 percent of affiliate unions voted yes to endorse Jump Start.

The labor movement is unified in our support for this policy.

It's important that our council and our city does not lead with austerity in the face of an economic recession.

I want to thank Council Member Mosqueda for her deep stakeholdering work that she and her chief of staff, Sejal Parikh, did, and urge immediate passage of Jump Start.

Thank you.

Thank you very much, Katie.

and thanks to MLK, Joseph Sergei, Summer Stinson, and Robert Krushak.

Joseph, welcome and good morning.

Hey, can you hear me?

Yes, thank you.

Go ahead.

Okay, my name is Joe.

I'm a member of District 6. As a union member and a teacher, I stand here alongside thousands of my union siblings, brothers, and sisters.

And as a teacher, I stand here alongside thousands of teachers and school faculty, counselors, custodians, paras, to demand voting today on a strong big business tax of $500 million per year that goes into effect immediately, which is really only a drop in the bucket for these corporations, but would increase the quality of life for working people, especially Black people in this city.

You know, the movement is tired of performative speeches at BLM rallies with no substance, no concrete demands as how you will help Black lives.

But today, you have an opportunity to actually vote on a strong Amazon tax to help the people of Seattle.

The movement demands that this bill be passed with the amendment put forward by Shama Sawant to raise $50 million to build at least 1,000 homes in the Central District to combat racist gentrification.

And that is a concrete way to say Black Lives Matter.

In addition to that, the Sunset Clause has to go.

And by saying that this bill would expire in 2030.

Thank you so much, Summer.

Welcome.

Good morning.

Good morning.

My name is Summer Stinson.

I'm a homeowner in D6.

Seattle faces a huge health and economic crisis in COVID and due to the gaping wealth divide and systemic racism.

The Seattle City Council must pass progressive new revenue and not pass the buck to voters.

Pass jumpstart Seattle with no sunset clause, double the revenue.

Pass tax Amazon and pass the capital gains.

Seattle can also increase investment in BIPOC and underserved communities by defunding Seattle Police Department by 50%.

Because Mayor Durkan has shown she won't support progressive new revenue, I urge the council to remove Mayor Durkan.

Thank you.

Thank you, Summer.

Robert, welcome.

I'm a homeowner in Greenwood.

My name is Robert Kirkshank, and I'm a homeowner in Greenwood in District 6. I'm speaking to you to urge you to pass strong, bold progressive tax revenues that are essential to our community in this moment of crisis.

Austerity will just add to the harm and devastation our community feel.

This is the right time to raise taxes on the richest members of our community, especially given the lead time required to get these revenues collected.

We need to be bold here.

That means passing amendments to raise the rates.

That means passing amendments that eliminate a sunset clause.

Being bold means rejecting amendments that would send this to the ballot box.

In a crisis as serious as this, it would be inappropriate for the council to abandon its leadership role like that.

Being bold means rejecting amendments that exempt nonprofits.

Being bold means ensuring some of the funding goes to Black Lives Matter and the Green New Deal by adopting the amendments proposed by Councilmember Sawant.

I also urge you all to at some point pass the capital gains tax that Councilmember Lewis has proposed.

Finally, please defund SPD by at least 50% and impeach Jenny Durkan, a mayor who not only ignores the community, but retaliates with violence and harassment against those who criticize her.

Thank you.

Thank you.

I see we've been joined by Daniel Swanson who was previous.

Daniel, you're welcome to speak.

Hi, my name is Daniel Swanson and I'm a worker and renter in District 4. I'm calling today in support of passing the strongest possible Amazon tax with absolutely no watering down of the current proposed legislation.

I believe the tax must raise 500 million rather than the 174 million that is proposed in the jumpstart bill.

This should not even be a question when we are talking about building 10,000 homes with $500 million versus $3,000 with the proposed bill.

Seattle has been in a housing crisis that will only be exacerbated by the coronavirus pandemic.

Choosing an option to build less affordable housing would be a slap in the face to your constituents who struggle to stay housed.

The proposed bill must also raise at least $50 million to support Green New Deal jobs program.

We need to start enacting Seattle's Green New Deal referendum and now could not be a more urgent time with record unemployment across the country.

We need jobs to improve Seattle's green housing infrastructure.

The legislation must also be enacted immediately and done so with no sunset clause.

We have been needing affordable housing investments in the city, and we need them now more than ever in the face of the pandemic and its repercussions.

We don't need a sunset clause on affordable housing.

We need a sunset on Durkin's austerity budgeting.

Thank you so much.

The next two are Angie Cassie and Josh Castle.

Good morning, Council.

For the record, my name is Angela Hicks-Maxey, the CEO of Tiny Top Development Center and a member of Kids First Washington.

I'm here in support of Jump Start Seattle because we need grants.

Since COVID-19 arrived, our sanitation costs have skyrocketed.

We now have smaller class sizes, which means payroll costs are up and revenue is down.

A class that used to have 20 children and two staff now has eight children and three staff.

One staff person in each class is constantly cleaning.

I've reduced the hours teachers work, but I pay them the same.

This is one way I can recognize the essential and stressful work they are doing for their families and our families.

We do everything possible to keep the children and staff safe and healthy, but this is expensive and not sustainable.

Every grant helps.

Please vote yes to Jump Start Seattle.

These direct grants to child care will help us stay in business.

Thank you so much.

Josh Castle.

Just checking.

Josh Castle will be followed by Ava Mintz and Matthew Ling.

Do we have Josh with us?

Oops.

Sorry.

Looks like Josh is not here.

Ava, welcome back, and then Matthew Lang and Emily MacArthur.

Hi, my name is Ava Metz, and I'm a member of Socialist Alternative.

As others have said, it's because of our movement that City Council Democrats are putting forward this watered-down version of our movement's legislation.

And City Council absolutely owes it to working people to follow through, vote today with no delay and no more watering down.

But we need more.

It's been five years of a homeless state of emergency, so why are Democrats proposing to build a third of the homes that our movement is demanding?

Council pledged last year to fund a Green New Deal, so why are Democrats failing to include funds for Green New Deal programs and green jobs we desperately need?

There's been a historic uprising for racial justice, put substance behind the slogan Black Lives Matter, stand with the 220 interfaith clergy who signed on to support and dedicate funding to stop racist gentrification, remove the sunset clause, raise the tax of $500 million, At an absolute minimum, support council members who want amendments to fund $50 million each for Green New Deal program and to fund at least 1,000 new affordable homes in the Central District.

Our movement is watching.

Thank you.

Thank you.

Matthew, welcome.

Hi there.

My name is Matthew Lang.

I'm lead organizer at the Transit Riders Union and a small business owner in Seattle.

I have been able to scrape some relief together on my own, and that is in no small part due to my privileges as a white man.

But let's talk about the needs that are in front of us.

Let's talk about the independent artists and sex workers that have been left out of grant programs.

Let's talk about the immigrants and refugees who have been struggling to put food on their tables for years.

Black and brown people, workers, who are being extorted back into work by predatory employers without child care in place.

We need progressive revenue now.

So no sunset clause.

Raise the effective tax rate.

Bring it up to August 1st and do not kick it to the ballot because people needed this relief yesterday.

Thank you.

Thank you Matthew.

Emily MacArthur.

Hi my name is Emily MacArthur.

I'm a renter in District 2. And I'm calling to say to pass a strong Amazon tax today.

I think this has already been a vote that's been too long delayed, and as MLK said, justice delayed is justice denied.

I demand that you vote yes for $50 million, both for the Green New Deal funding and for the 1,000 homes, which are just absolutely cannot wait, urgent priorities for our community that you have voted time and time again in hollow resolutions to say that you support.

Now is the time to put your money where the mouth is.

We need action, not just hollow resolutions.

I also want to say shame on Mayor Durkin for her attack on our movement.

This absurd letter that she issued yesterday calling on the council to attack council members to want in the midst of a pandemic and a budget crisis, she wants the council to waste time reinvestigating what the independent SDEC already investigated.

And she wants the whole city to proclaim that someone did a graffiti in her neighborhood.

She calls endangerment while she doesn't take ownership for tear gassing an entire city blocks of her residence.

She hasn't explained why it was okay to mace an eight-year-old girl.

Jenny's.

The next three speakers are Gabe Pelley, Jessica Scoslow, and Joan Simmons.

My name is Gabe Pelley.

I'm a volunteer on the Tax Amazon campaign and a renter in District 4. Unfortunately, my council member Alex Peterson has made abundantly clear he intends to do anything in his power to undermine our movement for an Amazon tax.

He's now disingenuously supporting an amendment to put the Amazon tax on the ballot.

Council member Peterson is aware we already have the signatures to take to voters if the council fails to act.

Instead, his amendment is designed to pump the brakes on our remarkable momentum and allow for a big business to millions on a misinformation campaign.

as Amazon did last year to get him elected.

Our movement will accept no more delays.

The climate crisis won't wait.

The affordable housing and homelessness crisis won't wait.

The pandemic won't wait.

Hold the vote today.

Heed our movement's demands to cut the Sunset Clause, fund the Green New Deal, and 1,000 homes in the Central District.

Thank you.

Next is Jessica Scoslow.

Hi, thank you council members for letting me speak.

My name is Jessica Scalzo and I am a District 3 resident and I am calling to encourage the council to vote for the original Sawant and Morales Amazon and big business tax.

We don't need a sunset clause.

We absolutely need Green New Deal provisions.

And we need to add 50 million more dollars to it to make sure we are prioritizing 1,000 new affordable homes in the central district to start to tip away at the racist gentrification.

I think much more will be needed, but that is a good start.

And also I have been collecting signatures on the past few weekends and people are excited about this tax.

They think it is necessary.

And so I would definitely encourage you all to vote for it today without delay.

Thank you for taking my message.

Hey, thank you so much.

Okay.

We have about 10 minutes left for public comment.

Um, I am going to ask the IT folks to give us 30 seconds on the timer so we can try and get as many people in as possible.

I've seen other councils do 30 seconds, not ideal, but would love to hear from as many people as possible.

Josh Castle, Joe Simmons and Rosie Daniel.

Josh, welcome.

Hi, my name is Josh Castle with Lehigh.

We urge council to reject austerity and budget cuts with progressive taxation that can bring in $200 to $500 million and reallocating the bloated SBD budget that takes up 25% of the city budget.

We can, in fact, fully fund the things we need to bring more people inside, protect more people from COVID, and reverse the severe effects of lack of affordable housing, gentrification, and displacement.

Please support the Central Area Housing Plan.

Please support I would like to thank all of the speakers so far for their good points.

I am urging Seattle city

the crisis that Seattle, this country, and this world are experiencing cuts deeper than any one movement could possibly account for.

And I would like to urge Seattle City Council to think big.

Thank you so much.

IT, if you could give them 35 seconds to wrap up their comments so that they can hear the chime at 30 seconds, that would be great.

Rosy Daniels, followed by Hannah Swabda, and then Rachel Brooks.

Hi, my name is Rosy Daniels.

I'm a D3 renter.

Just real quick, this council wouldn't be considering this tax were it not for our strength as a movement for the Amazon tax and the fact that we're fully prepared to take it all the way to November's ballot.

I fully support Councilmember Sawant's amendments, but I specifically want to hear the council members who support a sunset clause explain to us What value does that have for Seattle working people?

When you're unable to do that, I will just remind you that we won't forget that you betrayed us and we'll keep going.

We are demanding that you vote, that you remove the insulting sunset clause and that you vote today because we need an Amazon tax yesterday and we need it 20 years from now, too.

Thank you.

Hannah, welcome.

Hi, I'm calling in today to urge the Council to vote today with no delay to tax big business.

The City Council is only discussing this Amazon tax because of the immense pressure that working people have created, and we should see this as a victory for a movement that a progressive revenue tax is being discussed.

The Democrats' Amazon tax proposal is watered down from the start, and it is wholly inadequate.

We need as strong of a tax as possible to make a real impact.

The movement is demanding $500 million a year, not $174 million.

We should not have a sunset clause.

We need an extra $50 million to fund Green New Deal programs, an extra $50 million to fund 1,000 affordable homes.

Thank you.

Amanda?

Oops, I'm sorry.

Rachel Brooks, welcome.

Hello my name is Rachel Brooks President of ProTech 17 which represents approximately 2,600 City of Seattle employees as well as being a resident of District 3 and I'm speaking in favor of Jump Start Seattle.

This is an important step to help Seattleites to continue to struggle due to COVID-19 and to help us on a path to an inclusive recovery both economically and emotionally.

The very slight financial impact to our largest corporations is nothing compared to the devastation our workers have faced.

It is crucial that this bill be passed in this council with no delay and no sunset clause, as our communities need aid and improved services immediately and continuously.

Thank you so much for your testimony.

The next three are Amanda Sorrell, Scott Bertrani, and Dale Bright.

Welcome, Amanda.

Hi, thank you.

My name is Amanda, and I'm an organizer with 350 Seattle, and I'm calling today to support this progressive taxation.

Thank you for considering it.

I also want to support the amendments that would make it stronger specifically Council Member Sawant's amendments one of which would direct $50 million in funding toward a Green New Deal.

A year ago the entire Seattle City Council passed a resolution in support.

Now you all have a chance to follow up on that promise by supporting the Green New Deal in name and in actual legislation and funds.

We have an opportunity to address this head on which ultimately will be less expensive than waiting until it's too late.

Thank you.

Scott welcome.

I am Scott Bertani and I'm the policy director for Lifelong AIDS Alliance.

As one of the largest and oldest community based medical case management housing and food providers under the umbrella of Chicken Soup Brigade serving high acuity populations throughout Seattle in King County.

We're here to speak up for council member Mosqueda's Jumpstart Seattle legislation.

Members, our agency was formed by the health crises of our day, not unlike the public health disparities and inequities this legislation is proposing to ameliorate.

And for those who live at the margins, in the margins, we realize how important and vital it is to underpin people's lives in permanent supportive and nurturing environments.

We support.

Thank you very much.

The next three people are Dale Bright, Alice Lockhart, and Molly Moon, NYSL.

I'm Bill Bright.

I'm speaking on behalf of the 5,500 men and women of Labor's Local 242, many of whom live or work in Seattle.

We encourage the city of Seattle to pass Jump Start Seattle, include the Central Area Plan and expansion of tiny house villages.

And the rush to build housing, we must remember the workers.

Building these publicly funded projects should be paid the area standard wage with benefits.

And these projects need to include training.

We've seen success on housing projects and delivering wages and a couple of careers in the building trades.

Now is not the time to compound the crisis by allowing these projects to be built without these standards.

Thank you.

Thank you, Dale.

Alice, welcome.

Hi, I'm Alice Lockhart speaking with 350 Seattle.

We strongly support all the Savant amendments and strongly oppose the so-called level playing field amendments that tilt the playing field by capping taxes on big business, but not on working people.

And please don't wait for a ballot measure or a sunset jumpstart.

We need progressive revenue now, and we'll still need it later.

Thank you.

Thank you.

Molly Moon, welcome.

I live in District.

Hi my name is Molly Moon Neitzel.

I live in District 3. I own Molly Moon's Homemade Ice Cream and feel very responsible for our 90 employees and their livelihoods and health.

I urge all of you to vote yes on Jump Start Seattle.

I have been very thankful for all of the outreach and work that's been that has gone into.

a bill that makes sense for our whole community.

I want to particularly thank you for the child care component and the small business support.

Thank you so much, Molly.

Anna Bolina followed by Barbara Finney and Ellen Anderson.

Anna Bolina.

Good afternoon.

My name is Anna Bolina and I'm with Enterprise Community Partners.

here today to ask you to vote yes on the Jump Start Seattle bill and on the amendments that strengthen and clarify the intent and effectiveness of the bill.

Funding for small businesses housing immigrant and refugees is critical to our equitable recovery.

Moreover now more than ever we can't afford not to invest in housing.

If the past few months have shown us anything it's that affordable housing is not only our moral and social responsibility but a critical strategy to safeguard the health of individuals and the public and the solutions to racial inequities.

I urge the Council to act today.

Thank you so much.

Barbara Finney?

I live in District...

My name is Barbara Finney.

I live in District 5. I'm speaking for the Amazon tax, which you need to vote on today.

No delays, no watering down.

We need $50 million for 1,000 homes in the CD.

quality new affordable homes to allow African-American households to return to the neighborhoods.

Tax Amazon.

Thank you.

And Richard Voget.

Hi my name's Richard Voget.

I'm in District Number 4. I believe it's City should take care of its weakest members.

A city cannot call itself civilized when its children, disabled, sick, and elderly are neglected.

I don't believe there is any scenario in which preventable suffering is an acceptable outcome as long as money is saved.

So we need to do progressive taxation now, fully fund the Seattle Green New Deal, get used to the idea of clawing back money from wealthy to help the marginalized.

Thank you, Richard.

The last four speakers are the Reverend Angela Ying, Ellen Anderson, Uma Ravanaut, and S.

Khurshila.

Reverend Angela, welcome.

Yes, this is Reverend Angela Ying.

I am with over 200 faith leaders, 220 actually, who have signed a letter that you passed, not only to Amazon with that watering it down, but actually add an additional $50 million to fund 1,000 affordable homes in the Central District in support of our black families to live and return to their neighborhood to reverse racism.

Also, $50 million for funding the Green New Deal, including legislation for climate justice.

We want no sunset clause.

We want to make sure Black Lives Matter, and we ask you to vote now for the budget so that we, the people's movement, can...

Thank you.

Ellen, welcome.

Hi, my name is Ellen and I live in District 2. The City Council needs to pass the strongest 500 million a year with no sunset clause Amazon tax today.

I can't help but wonder how much city-owned housing we would have built today if the majority of the City Council hadn't repealed the movement's previous Amazon tax.

Please don't make the same mistake.

COVID-19 is not just a global health care pandemic, it's also an economic Seattleites have already blown through their savings, and we need this housing now.

This housing crisis doesn't care if there's a pandemic, do you?

And if so, how will you account for that?

I urge the city council to support our movement and the people.

Uma, welcome, Uma.

My name is Uma Raghavan.

Hello, my name is Uma Raghavan.

I'm a tech entrepreneur at Seattle District 7, and I'm not representing the board or the companies I advise, As a tech entrepreneur, I want the City Council to pass Savant Tax Amazon 100 million per year legislation with no sunset cost today and without further ado and without watering it down.

It would tax big business beginning immediately to fund COVID relief, affordable housing, and the Green New Deal.

I also want Mayor Jenny Durkan to resign.

She failed the people of Seattle with her horrific policies and violence.

She's unleashed over and over again.

Please resign, Mayor Durkan.

and please pass Savant's tax Amazon 500 million per year legislation.

And then S.

Karushila.

Sorry about the last name.

Welcome, S. Hi, my name is S.

Karushila.

I am a homeowner in District 5. I'm also an economist.

The current recession is being raised as a reason to avoid passing a robust, large tax on businesses which are large.

but the underlying issues the city faces are caused by structural inequality and taxation in order to fund spending on marginal people is not a problem that worsens recessions.

So we need large progressive sources of revenue which are long-term to address structural inequality and recessions are not a reason

Thank you so much for all of your comments today.

We really appreciate the folks who've signed in.

Please do email us your additional comments, and we really appreciate folks weighing in.

You can, again, testify today at 12 noon.

Council colleagues, that ends our public comment for this morning.

Again, we will pick that up at 2 p.m.

today.

You can sign up for public comment at 12 noon today or send us your comments via email at council at cl.gov.

Let's move on to other items of business.

Will the clerk please read item one into the record?

Agenda item one.

Council Bill 119810 related to taxation imposing a payroll expense tax on persons engaging in business in Seattle adding a new chapter 5.38 to the Seattle Mr. Code and amending sections 5.30.1 and 10.060, 5.55.010, 0.040, 0.060, 0.150, 0.165, 0.220, 0.230, and 6.208, 0.020 of the Seattle Municipal Code for a briefing, discussion, and possible vote.

Wonderful.

Thank you, Madam Clerk.

Council colleagues, I want to first say thank you to our central staff.

We have central staff Dan Eder, Tom Meisel, Ellie Panucci, and Tracy Durascliff here with us from central staff.

And the entire team at our central staff has really been working around the clock with the folks from IT and the clerk's office.

So huge amount of appreciation for all of the work that they've done throughout this time of COVID.

to make it possible for us to continue having robust discussions as council colleagues and engage directly with the public.

Especially today, as we think about going through the amendments that are in front of you today, the central staff has provided a comprehensive file for you.

So if you're like me and you prefer to have items in paper, sometimes working just electronically is a little challenging.

But what they've done for us is they have sent a zip drive with all of the amendments and all of the materials today.

All of those materials are labeled in chronological order, and you can see how they will be presented in the order that is presented in the file.

We have also the opportunity to hear from central staff who will be walking through a presentation of the various amendments.

Don't worry, there will be plenty of time to talk about each of the amendments.

We're going to discuss amendments as they are grouped in categories.

You will see that in the presentation that Central Staff will provide as well.

You have these materials electronically.

If you're like me and your computer starts to overheat when the screen is being shared, just know you can go to your email and find all of the amendments and the PowerPoint presentations in the materials that they have sent you.

Again, thank you for making this possible for us to have the materials clearly outlined in front of us.

So council colleagues, in order for us to begin this discussion today, I'm going to move to have item one before us, which would then allow for central staff to walk through each amendment presented on the agenda.

And then we will again have conversations by grouping of amendments to specific to theme.

I move the committee recommends passage of council bill 119810. Is there a second?

Second.

It's been moved and seconded to recommend passage of the bill.

Council members, now that the bill is before us, I'm gonna request that central staff walk through a number of amendments on the agenda.

In addition, central staff will be grouping this discussion where there may be conflicts that exist to allow the sponsors of the amendments an opportunity to address it before voting on those amendments.

So again, thank you to central staff for walking through the various amendments in front of us.

We have in front of you for the first part of this meeting, the basically the revenue bill, Council Bill 119810. We will then talk more after this presentation about the amendments here about the high level category spend bill, which we discussed on Monday.

and thanks to Allie Panucci and Tracy Ratzliff for their amendments on that.

And that is the majority of our meeting today, hoping to have a robust conversation.

And as always, do ping me if you'd like to say something, but we're going to ask central staff to get through as much as their presentation, and then we will begin the discussion.

Thank you, Dan.

I'll turn it over to you.

Okay.

Thank you, Council Member Mosqueda.

I'm Dan Eater, Deputy Director of Central Staff.

Tom Mikesell and I will walk you through the presentation that I hope you can now see on your screen.

Okay.

As you are well aware, during the past couple of months, the committee has been considering proposals for a new payroll tax on the city's largest businesses measured by their Seattle payroll.

Last week, the committee reviewed the policy choices included in what has been dubbed the Jumpstart Seattle Tax Bill.

And the committee discussed the similarities and the differences to what has been described as the Tax Amazon Bill.

So today, as I just mentioned, Tom Mikesell and I will walk through a number of amendments to the tax bill.

There are three categories of amendments.

We will take each of these separately.

There are technical amendments, there are tax structure and rate amendments, and then there is a catch-all category of all other amendments.

I'm going to orient you to the slides generally, and then I'm going to turn it over to Tom to walk you through the technical amendments first.

You're going to see a series of rows and grids.

We have attempted to identify when there are amendments that are effectively in competition, one with the next, which is to say that they are mutually exclusive, and if you adopt any one of them, you can't also adopt the other ones that have an X next to them.

So the first screen, I'm going to key it over to Tom to talk through, doesn't have any Xs.

And so these are not amendments that are in competition, but the next category will have some Xs next to it.

Unless there are any questions immediately, I'm going to turn it over to Tom.

Thank you, Dan.

Good morning.

Members of the Select Budget Committee, I'm Tom Mikesell, an analyst with central staff.

So you're now looking at the screen that Dan referenced and how we have organized it.

So the first amendment to the Johnstown proposal is a technical amendment.

It is a numbered amendment 21 for reference to the materials that were distributed.

for the agenda.

As you'll see, there are no checks, no Xs in any of the boxes along the row.

So none of the other amendments we'll be talking about this morning have a conflict with this.

In terms of the subject matter of this amendment, it was discovered during the process of reviewing amendments that the definition of compensation had lost some wording.

And that was not intentional, not at the intent of the sponsor.

and it was a purely drafting error.

So Amendment 21 essentially restores the language back to the introduced bill as the sponsor intended.

It essentially adds the following categories when they are earned for services rendered in business operations.

Net distributions that are payments to an owner, a partner, or an LLC member, stock grants, and bonuses.

So council colleagues, you have amendment 21. I'm not sure that it works well with the toggling back and forth between the PowerPoint presentations to share the screen, but it might be helpful as we do that in the future just to have the amendments ready to go if people want to see that effect statement.

Again, just reiterating what Tom has said, and Tom, I didn't cut you off, did I?

No, no.

Okay, just to reiterate what Tom has said, amendment 21 is technical in nature.

Appreciate you catching this, Tom.

and thank you for proactively working it here.

Seeing that there's no conflicts here, council colleagues, I want to move to amend council bill 119810 as presented on amendment 21. Is there a second?

It's been moved and seconded.

Thank you so much to all of the central staff presentations for what exactly is considered in this technical amendment.

Are there any additional comments or questions?

Hearing none, seeing none, just double-checking.

It's been moved and seconded that the council adopt Amendment 21 as presented on the agenda and described by central staff.

Hearing no additional comments or questions, will the clerk please call the roll on adoption of Amendment 21?

Strauss?

Council Member Strauss?

Council President Gonzalez?

Aye.

Herbold aye Juarez aye Lewis aye Morales aye Peterson aye Sawant aye Chair Mosqueda aye Eight in favor none opposed.

Madam Clerk, could you please go back to Council Member Strauss?

Yes, aye.

Thank you.

Nine in favor, nine opposed.

Thank you very much, Madam Clerk.

The motion carries and the amendment is adopted.

Council Staff, thank you so much for that overview.

Could you please continue on to the next group of amendments?

Chair Mosquitto, did I hear you ask if we could put the amendment itself up on the screen when we're discussing it?

I don't know if that's possible for you to do, but it might be helpful to have that effect statement ready to share with folks.

I think the slide you presented is good as kind of context if there is conflict, but if it's available at the ready to share the effect statement, that may be helpful for folks following along.

It is pushing into advanced screen sharing, and I will do my best to do that on the fly.

I'm not sure if I have the capacity, but I will try.

No pressure.

As a reminder to all of our council colleagues, You have each of these amendments and the effect statement if you need to crosswalk it.

The amendment number is listed on the subject title in the materials that we've received from central staff.

Okay, so council colleagues, we have in front of us a series of amendments that will be related to amendments 2011, 15 through 17. I'm going to ask central staff to go through their grid here.

And then for the purposes of discussion, I will be asking folks to entertain a motion to consider amendment number 20. So we can have a robust discussion on all of the amendments, including some that may be late breaking.

Dan or Tom, was that you who wanted to lead us through?

I apologize, Madam Chair.

Thank you.

First, let me just orient, since this particular matrix does have some conflicts identified, this series of amendments that we are going to be discussing include amendments that change and or the the tax structure and the amount of the rate.

So for example, Amendment 20, which I will lead into, has conflicts with Amendment 11, 15, 16, 17, and of course, itself.

So if Amendment 20 passes, then none of the other amendments can be reconciled against Amendment 20. So I'll launch now into the description of Amendment 20. What Amendment 20 does is, in reference to the introduced jumpstart bill, it adds a middle rate tier of total business payroll expense that includes total business payrolls of $100 million.

So just to give a point of reference, the bill is introduced had a tier of $7 million up to a billion dollars and a billion dollars and above.

So one functional change is that there is now, with amendment 20, an additional middle tier of business size.

An additional change in terms of structure is- Tom, may I interrupt you for just a second?

Dan, if it's possible to show the effect statement or page two of that amendment, that would be helpful.

I am going to try to do that.

I think what I need to do is stop sharing the PowerPoint and then try and switch to share the Word document.

You got it.

That's right.

And Tom, your audio sounds better today.

It sounds a little glitchy when you talk fast.

Just wanted to flag that for you.

Looks good, Dan.

Thank you very much.

Great.

So I covered the first bullet point with regards to the new total business payroll addition in terms of the tax structure.

The next key point is the introduced jumpstart plan had levels of compensation such that the payroll expense would would have different rates applied for $150,000 to $500,000 and $500,000 and above.

What Amendment 20 does with reference to the introduced bill is it revises the cutoff point from $500,000 to $100,000.

So next in line with regards to the effect, at those new payroll size tier and compensation amount tiers, the new rates are as shown in the effect statement.

I don't know if it would be helpful in the interest of time for me to read through those or not.

Each rate is new and there's an additional compensation tier.

So I will defer to the chair whether or not I should describe those further beyond what's stated on screen.

I'm happy to describe these.

I will note that this is a co-sponsored bill from Councilmember Morales and myself.

Tom, as we maybe talk about the tiers very briefly, just for technical purposes, again, colleagues, this is not intended to be a debate on this amendment, just as for technical purposes.

Tom, I may ask you to call in just because it is starting to glitch a little bit.

So if IT can look for Tom to call in.

and regarding the structure and the backbone of what the table looks like, I'm going to turn it over to Councilmember Morales, who had initially considered and briefly discussed last week this middle category.

Councilmember Morales, from a technical perspective, would you like to add anything to Council Central Staff's presentation?

Um, well, only that we, I do want to think central staff, my Tom in particular for working with me to find this middle territory.

And as he was saying, what we are trying to do here is amend by inserting a 3rd tier into the tax rates.

and this additional tier does allow us to raise an additional $35 million for the community.

So I do wanna thank Council Member Mosqueda for our conversation and your willingness to have this conversation so that we can move from the 175 to this 215 that we have in the amendment.

Wonderful.

I'll add to that, Tom, just a reminder as you dial in, make sure to mute your computer as well.

I will add to that that what you see in this amendment is the initial rates being kept stagnant for the incomes that are between $150,000 and $400,000.

So we have kept the same rate that most of these large companies would pay for those salaries over $150,000.

And as Tom mentioned, the upper tier salary, so folks who were previously making $500,000 and more, has been moved to $400,000.

And in this effort, as you can see, when we toggle up by 0.3% of the higher income category, and then again another 0.2% in the middle income, or in the Very large category, you got large, very large, and mega large.

In the very large category, that allows for the known total to be computed to $214.3 million.

So that brings up the total proposal by about $40 million while keeping that first tier to be assessed in the category between 150 and 400. That is just for additional technical feedback.

Councilmember Morales, anything else?

Councilmember Lewis, you had a question for Tom?

So the first one, the total $214 million tag based on the amendment and the addition of the middle tier, is that $214 million number still not inclusive of an estimate from the $1 billion payroll tier?

Is that still something where we're not completely clear on how much additional revenue that tier would bring in?

You're on mute there, Tom.

Sorry, Tom.

You're on mute on your computer.

I'm not on your computer.

I'm on your phone.

On both, it looks like.

Right.

Try to unmute your phone, if possible.

And just checking with IT that we have allowed Tom into the presentation.

If not, Tom, please go ahead with the computer.

Can you hear me now?

Yes, we can.

Outstanding.

OK.

I apologize for that.

So Council Member Lewis, with regards to your question, I guess there's two pieces.

One is that the calculation of the 214 million is the same base data as used for the original 173 and a half.

With regards to the billion plus payroll tier, The data that we have does include the billion plus.

It just doesn't provide the additional detail to figure out an incremental portion of the higher rate that is applied to those larger businesses if they exist in the data.

So that's just a detailed way of saying that there is a portion of the payroll and then the tax liability captured for those billion-plus corporations, though we don't have sufficient data to figure out the incremental piece over and above.

For example, the difference between 1.7% or 0.7% at the $150,000 to $399,000 level and 1.4%.

So it's essentially a 0.7% increment that is unknown for payroll expense, or $150,000 to $399,000, and a half a percent for compensation of $400,000 and above.

That piece is the piece that we cannot precisely estimate because data is not available.

Okay, thank you for clarifying that that was still the case.

That was my understanding, but I just wanted to make sure that that was still the case with this amendment.

Other question, just for the sake of the audience and all of us here on the council as well, just wanted to ask, since we're at the beginning of the rates conversation and that estimate, I have heard some concern from folks in the business community that we are perhaps with the base data that we have, underestimating the total revenue.

And I just wanted to give you the opportunity to publicly address the underlying methodology and the base data sets used to create the estimates just so we can for the people that are, you know, that are watching, and for us as council members, again, reiterate the, because I think you mentioned it when we had a meeting three weeks ago, but just to remind everybody again, the base data and the methodology used to develop the estimate.

Absolutely.

The base data came from a detailed request to the State Employment Security Department for essentially requesting detail arranged in a way that supported the compensation tiers as described.

So the $150,000 to, well, originally $500,000 and then $500,000 and above.

And then also we asked for for the payroll, the total payroll data of $7 million to a billion and a billion dollars and above.

The Employment Security Department is limited through confidentiality to disclose information that would otherwise describe either in a case where a business category in their data is descriptive of three or fewer employers or a case where one employer is such that they represent 80% or more of the total in the category.

So due to that restriction, the Employment Security Department was not able to disclose an additional cutoff identifying businesses as a billion dollars and above in that 2019 data.

So that gave us a significant amount of data to provide set-based estimates that we've described during the course of these meetings.

in terms of the large portion of the tiers and the payroll cutoff amounts.

But it doesn't allow us to determine the additional incremental piece for any businesses that are a billion dollars and above.

One additional point that I'll just add just by way of how the estimate was derived.

We used the 2019 data and then we inflated that to a 2021 value.

using the CBO's regional forecast for the Puget Sound region for wage and salary disbursement growth.

So, I mean, that was the essence of how the forecast or how the estimate was derived and the limitations of the data with regards to that billion plus payroll tier.

I think that is very important.

Tom, Dan, thank you for the numbers you have crunched.

I want to take a quick second to thank the folks at ESD as well.

The folks that have been working with our team to provide that data have been very gracious to share their time and to provide that information.

I want to publicly thank them at the employment security department for all they are doing in the midst of the big crunch on the need to get checks out for I think that's all I have to say.

Thank you for that technical question.

Before we move on, any additional technical questions?

Remember, we will have time to discuss each of the amendments here, but I want to have folks have a chance to hear any questions.

there's amendments related to some exemptions to the base bill that we'll be considering later on.

So I just want to make sure that I understand that this particular amendment does not include any categorical exemptions beyond those that were either included or included in the base bill.

That is, Council President Gonzalez, that is correct.

This is merely a structural change to the payroll tiers and the compensation tiers.

It doesn't touch any of the exemptions or sunsets or start dates, which Dan will cover in the second half of the presentation.

Thank you, Tom, for that clarification.

And thank you, Chair Mosqueda, for allowing me the opportunity to get that clarification.

I'm going to pass it over to councilmember Herbold.

Councilmember Herbold, question from you.

if we have that information.

Council Member Herbold, the estimate that staff has provided is $173.5 million for 2021 in the base legislation, which dovetails with the Council Bill 119811, I believe, or 812, the amount actually spent.

We have not provided a 2022 estimate.

other than what would be assumed in terms of inflation from the $173.5 million amount.

I think Council Member Herbold is referring to the inflation assumption that gets us to $203 million.

I saw Ali come off a video, just wanted to see as it relates to the spend plan since you were using some of those numbers.

Ali, could you comment on Council Member Herbold's question?

I will pass it over to councilmember Herbold.

million about assumed in 2020 was the revenue goal.

It is not based on an estimate.

But at the request of the sponsor, we use the goal assuming that there is some difference between the estimate and the data that's not available to provide it.

So the spending plan was using the revenue goal rather than an estimate for 2022 and beyond.

I'm going to go ahead and move on to the next item.

multiplier effect of having that third category for the mega companies, that is not factored in to 214. If I, as an individual, were to be making assumptions about how that would potentially be added, you could assume that that would potentially bring us up to more of like the $240 million threshold, but we will, that is part of the assumptions.

I think the the benefit of having these numbers in front of you is that these are the known dollars.

So you could compare 214.3 compared to 173.5.

Thank you, Council Member Herbold.

Please continue.

Thank you.

So let me try asking the question a little differently.

So that if under the base legislation, the spend goal for 2022 was $200 million.

If this amendment passes, what would be the 2022 spend goal?

I will pass it over to councilmember Herbold.

Councilmember Herbold, you sort of landed on the challenge here of trying to sort out the very detailed spending plan while the conversations about what the rate is and how much revenue is estimated to come in.

plan is, that's why we don't have those details developed yet.

What I have assumed, if I reran the housing model, for example, using the new estimates with this adjusted rate, I just assumed that a small inflationary adjustment to the $214 million would be applied.

So for example, one way to think about this is if we assume the spending plan stays the same as the bill as introduced, that 65% of the money would go to housing.

In 2022, starting with housing investments in 2022, I would assume that about 3,400 units would be developed over the 10 years, whereas the bill as introduced had an estimate of about 3,200 units.

I didn't reapply a goal versus an estimate.

I just used the 2021 estimate and then adjusted it slightly for inflation.

I see Councilmember Peterson has his hand up.

Councilmember Herbold, I think the way, the simple math that I have been using is to basically add about 30 to 35 million as an assumed amount to the total that you see that is known.

That helps.

Councilmember Peterson.

Thank you, Chair Mosqueda, and thanks to central staff for putting all this together for us.

We know there have been lots of amendments, so thank you for organizing them for everybody here today.

And my question is, getting back to Councilmember Lewis's question, I just wanted to make sure I understood the response on the $1 billion and more payroll tier.

So that $214.3 million, that is, all those dollar amounts for the $1 billion payroll tier and above, all those are known, or are they not known because employment and security department was not able to disclose that?

I was just a little bit unclear on that.

Yes, Council Member Peterson, that's a good question.

It's deep into the description of how the rate model works.

We do have data for the entire payroll amounts that are collected by the employment security department for all sizes of businesses above $7 million.

And so when running the model to determine amounts of estimable revenue, we can apply the, so for the example of this particular amendment, the 0.7% rate to all businesses that are $100 million and above, which will include businesses of $1 billion and above, just by virtue of the assumption that anything over $100 million includes $1 billion and above.

And also, similarly, we can assume that since the data includes all business data, that The rate tier of 1.9%, which is applied to compensation of $400,000 and above for the $100 million to $1,999 category can also be applied to the businesses that are $1 billion and above.

So that's a really detailed way of saying that for businesses of $1 billion and above, we have the data to calculate the 0.7% for the payroll expense for $150,000 to $399,000.

And we have the data to calculate the payroll expense for compensation of $400,000 and above at 1.9%.

What we can't do is figure out the incremental portion, so the difference between 1.4% and 0.7% for $150,000 to $400,000, and the difference between 2.4% and 1.9% for compensation of $400,000 and above.

That's the concept that the estimates do not include.

And that's OK.

I don't need that dollar amount broken down.

I guess what I need is to know whether the $214 million is underestimating what we might be able to obtain.

Commissioner Peterson, in discussions with the Employment Security Department, we did attempt to determine whether or not there is any payroll expense at a billion dollars and above.

And they were unable, through confidentiality, to disclose whether there is or is not data in that category.

So it would be an assumption that one could make that there is additional revenue that is not being described by the estimates that we are giving, though we don't have the data to confirm that assumption.

And the reason I ask this question is, I have a question for you.

Council President Gonzalez had a really good question about does this include any exemptions, the 214 million?

The answer is no.

I guess I'm trying to get at maybe this is underestimating, the 214 million is maybe underestimating what the potential revenue is which would then make room potentially for exemptions that we are about to debate later.

If you don't mind me jumping in, I think it's important to put on the other side of the ledger some of the uncertainties that may make our revenue estimate too high.

So you have been discussing the differential for the businesses that are above a billion dollars.

If there are businesses that have more than a billion dollars of payroll, and I think it's, my assumption is that they are, but I don't have data to demonstrate that, and that would add to the revenue estimate as you have described.

The revenue estimate has some significant uncertainties to it.

We are using 2019 data from before when the COVID emergency started, and we've made some assumptions to dampen the expected 2021 revenue.

but those are assumptions that we can't know if they're right or not.

So it is possible that our base estimate is too low because we're not capturing the incremental tax revenue from the higher rates for the billion dollars and above.

It's also possible that our estimate is too high because we have too rosy a picture of what's going to happen in 2021 and beyond with the COVID emergency affecting payroll effectively.

And so how those two balance each other out is unknowable at this point.

Great questions, points for all taken.

Council Member Peterson, any follow up?

No, thank you.

It may just point to when we do the spending plan, providing some flexibility.

So if this tax is adopted, that there's I think it's important to have flexibility if the revenue amounts come in higher or lower than expected, then there's some sort of automatic way that adjustments are made.

Doing things based on a percentage basis rather than for the different spending buckets, doing it based on percentages rather than based on dollar amounts or something to provide flexibility.

Just on that, I assume, just want to remind folks, that's a great reminder for us as well that this is part of the reason that we are interested in having a week break next week so that we can continue to get feedback on the amount that is raised from this potential tax and then plug that into the spend plan throughout next week so that you will then have that text in front of you for consideration on the 15th.

Ali, would you like to add anything to that?

Thank you, Chair Mosqueda.

Thank you.

I wouldn't add much.

You essentially said what I was going to say.

The only thing I would add is just to note that ultimately when the council adopts a spending plan, typically it would be percentage based.

And then that gets formalized through the annual budget adoption process through specific appropriations where you're actually allocating, authorizing spending of dollars.

And so there's a, it gets sort of refined through the annual budget adoption process.

I think that is all I have to say.

Thank you for that reminder.

Councilmember Lewis?

I don't know if this is a question for Dan or if it is a question for Tom.

I want to throw out there to central staff.

probably not a whole bunch of companies, probably just one or two.

I wonder if we have estimates of what the base is for the $100 million to $999.9 million tier, and if we have a good idea of the universe of companies that that would impact, and how confident we are of the estimates, too, within the middle tier.

Thank you, Council Member Lewis.

I can take that question.

We did, in the original data exploration with ESD, trying to identify at what point they could disclose data, that point was indeed $100 million.

So they did provide the detail.

I believe there were approximately 32 companies that were in the $100 million and above.

For both the, well, for the amendment that we're discussing right now, we made an additional request of ESD to define the $400,000 and above employee expense, payroll expense tier, and so we have that data as well.

I don't, off the top of my head, know how many employees that covers, but we do, you know, there was data to enable us to set the rates at these tiers as described.

Tom, excuse me.

Oh, sorry.

Go ahead.

Go ahead, Dan.

Well, I was just going to ask a clarification on your behalf.

Maybe you were going to ask it.

Tom, I think Council Member Lewis was asking specifically about the tier between 100 million and 1 billion, and I think you were answering above 100 million inclusive, is that correct?

That's correct.

Yeah, and actually, Dan, you did sort of preempt my follow up, because that was how I took Tom's response as well.

And so just to clarify then, like we have a pretty good data picture for the number of companies that are above 100 million.

But above that, we don't really have a great idea of like how many of those are above like a quarter billion, half billion, 1 billion.

We just know that there's 32 companies above 100 million.

Is that a good read of that?

That's correct.

Okay, great.

Thank you.

Great.

Thank you so much.

And I would encourage central staff to continue with your presentation.

Again, just for the process that we're engaged in here, we're hearing all of the amendments in this first category that central staff provided on the slide that we were looking at.

So we are going to hear about right now, amendment number 20, then 11, 15, 16, and 17. And then we will get into the discussion and possible actions.

So just reminding folks, we're still in the overview section here.

and Dan, please continue.

There's no additional questions on that.

Seeing none, please continue.

Thank you.

Thank you, Chair Mosqueda.

So I will now talk about Amendment 11. So Amendment 11, essentially, so this gets into referring back to the matrix, the instance where it's a tax structure change, so that it conflicts with other subsequent amendments What this does is in order to generate a total of $500 million of annual estimated revenue, it essentially implements the tax Amazon tax approach.

So it removes the sunset provision, removes the level playing field provision, which is the instance where council will assess overlapping jurisdictions, progressive tax options and repeal the tax or visit amendments if necessary if there is an overlapping jurisdiction that passes such a tax.

It removes the payroll expense, the compensation tiers.

It removes the different gradations of total size of business payroll and replaces it with a single cutoff of $7 million and above in total expense.

It adds a single tax rate of 1.63% applied to all non-exempt payroll expense.

It adds an exemption for nonprofit business and home care agencies.

It adds a definition of an integrated business enterprise as a single business for the purpose of calculating the total payroll expense against the $7 million threshold.

It precludes downward adjustments in the CPI.

And then it changes the start date of the tax to August 1st, 2020.

Okay, colleagues, again, not for debate, but just for technical questions.

Council Member Sawant.

Thank you.

Just not a question, but just to reiterate something that Tom already mentioned, just to clarify, Amendment 11 is not in conflict with Amendment 20, as Tom just asserted.

That's because if this would pass, it would simply replace the Amendment 20 structure, so those two things are not in conflict.

Thank you, Council Member Sawant.

Okay, seeing no additional questions, let's go on to Amendment 15 for an overview.

Thank you, Chair Mosqueda.

So Amendment 15 does a few structural changes and then also changes the rates in the introduced legislation.

It removes the sunset provision, removes the level playing field, increases the total rates across all payroll expense and compensation tiers, precludes a downward inflationary adjustment into thresholds and exemption amounts.

and then it changes the tax start date to August 1st from January 1st of 2021. So the estimated portion of these changes results in a revised revenue estimate of $466.6 million in 2021 and 194.5 in 2020. This in essence brings in an additional $293 million in estimable revenue.

in 2021. And the intent, again, the tax bill does not do this, but as described by the sponsor of the amendment, the intent is for general fund revenue replacement in 2021.

Not for debate, but any questions?

Technical questions?

Council Member Slott?

Oh, sorry, I can't hear you.

If you can.

Sorry.

Thank you.

Just in relation to the amendment number 20 that we discussed the technical aspects of this, if, when we go back to considering amendment number 20 for a vote, then The number 15 will come as an amendment 20 a which is which would be an amendment to amendment.

20 because it would be under that tax structure that is being discussed under 20 so.

So just to explain that, it would be discussed as amendment A, and then number 16 that Tom will go to will be discussed in amendment 20B.

And then 17 would be discussed as amendment number 20C.

But they also appear as 15, 16, 17, because we had prepared them originally as standalone amendments.

But then when amendment 20 came, which amends the tax structure itself, then we had to bring these amendments in the context of that.

So it depends on which one, which way it's going to get considered.

Appreciate that.

And just to reiterate, A, B, and C as sent by your staff equal 15, 16, and 17 just for people following along.

Okay, hearing no additional questions, please continue.

Thank you, Chair Mosqueda.

Amendment 16, it merely makes changes to the tax rates in the introduced legislation.

to generate an additional $52 million in estimable revenue in 2021. And again, similarly, not included in the bill, in the amendment specifically, though the intent of the sponsor is that the newly generated revenues would be associated with an amendment to Council Bill 119911, or 811, to build 1,000 plus homes in the Central District for people 0% to 80% AMI, or Area Median Income.

Thank you, Tom.

Technical questions?

Hearing none, please continue.

Similarly, Amendment 17 changes, revises the rates in the introduced bill to generate $52 million in estimable revenue.

These revenues would be associated with a spending plan amendment for Green New Deal investments.

technical questions.

Okay, hearing none, does that conclude the summary of the tax structure and rate amendments?

Madam Chair, yes, it does.

So I want to thank you guys for all of the work that you have done and the entire central staff team for working around the clock and for making the review of this very easy to follow.

Tom, thank you for the walkthrough.

Dan, thank you for being flexible with the screen that you were sharing, because I think that that helped.

It may help as we continue to have discussions to have those effect statements listed as well.

For the purposes of discussions, council colleagues, I move to amend Council Bill 119810 as presented on Amendment 20. Is there a second?

Second.

It's been moved and seconded to adopt Amendment 20 as presented on the agenda and described by central staff.

First, I want to turn to Council Member Morales as co-sponsor of this legislation.

to tee up the discussion on the amendment in front of us.

Yes, I am.

Thank you.

Thanks, everyone.

I do want to, as we begin this conversation, I do want to thank Council Member Sawant for introducing the Progressive Revenue Bill this year.

I think it's important to acknowledge that without her urging this body to consider the idea over and over again, it is likely that it may not have come up.

The majority of this council was here in 2018 when the employee hours tax was repealed.

And I know there was real trepidation about revisiting the topic, understandably so.

So I do want to thank council members a lot.

Today, we are voting on a major structural change in how we finance public services.

And throughout this renewed budget discussion, I've been voicing my strong desire to see a sizable progressive revenue package that really begins to address the enormity of the issues that we face.

And I didn't realize when I co-sponsored the original bill that we would be staring down a $300 million budget shortfall or that we'd be faced with a public health and a financial crisis, both of which have really laid bare the devastating impact of the layers of inequity in our society.

This amendment, as we've been saying, inserts a third tier into the tax rates.

So I want to thank Tom again for working with me to determine where that third rate should go, where that third tier should go, and for helping us get to an additional $35 million for the community.

And as I said, I want to thank Council Member Mosqueda for our conversations around how we get here.

so that we can get additional revenue for our community.

I do think it's a testament to the power of collaborative governance that we produce good outcomes for our community, especially now when there are so many challenges that our city is facing.

And I'm proud to be co-sponsoring this with her.

councilmember Morales.

I appreciate your comments and all of your work as well.

I will make a few comments as well and turn it over for folks to discuss.

First I want to echo appreciation for the ongoing push to have progressive revenue passed.

Councilmember Morales, I think your introduction of your first bill in January got the ball rolling in I think that that also initiated some incredibly productive conversations at the state level to keep the pressure on.

I want to thank the work that you did to introduce your first bills, which I think prompted folks to advocate in Olympia, thank Council, I'm sorry, thank Council, geez, I keep saying Council, Representative Macri for the bill that she introduced as well.

Even though that bill didn't move forward, I think it continued to show that the people and community are calling for us to right size up this upside down tax system.

And we know that this bill alone will not close the gap that we need.

and that we also need to continue to couple city resources with regional, state, and federal dollars to respond to the COVID crisis.

But in working with all of you and following the lead of the model that Councilmember Morales discussed last week, I think that this proposal in front of us brings up the known dollar amount by $40 million.

and I want to thank Council Member Morales for the creative solutions to help move the dial to continue to explore ways for us to push and do better by communities who don't typically have a seat at the table.

This amendment does just that by adding approximately $40 million in revenue collected, known revenue collected.

We can both invest this year in immediate COVID needs and in the out years in additional affordable housing and homelessness crisis.

Colleagues, again, as a reminder, we will continue to have conversations about how to move those dials and percentages in the spend plan as we reconvene again on the 15th, but the proposal in front of us would reflect that many in the community, including labor and business and advocates, small businesses and community advocates who've been engaged in the conversation, also would like us to dial up the dollar amount to the degree possible.

This allows us, I believe, to keep the initial that.

We want to make sure that we keep the percentage point constant as we introduced it, but also recognize that the higher salaries could absorb potentially more of an assessment and we can bring that assessment up and really make some incredible progress this year.

Again, thanks to everybody who provided feedback on this and to councilmember Morales for your co-sponsorship and your leadership on this structure that is in front of us.

Thank you.

I will be supporting this amendment.

I just want to signal that we're just trying to work through these amendments with everybody else so that we're sort of narrowing down as a group what the ultimate bill will be.

It doesn't necessarily signal my support one way or the other for the final package, since we don't know what the final package is yet.

But I will be supporting this amendment.

Thank you.

Thank you, Council Member Peterson.

And I believe I saw another hand.

Is that Council Member Strauss?

Okay.

Okay.

Council Member Sawant.

Thank you.

I will, of course, and this should come as no surprise to anybody, but I am absolutely for any and all measures that will raise more progressive revenues and specifically by taxing the wealthiest corporations and the wealthiest people.

in our society to fund working people's needs.

So this measure that would bring an estimated $40 million per year more is something that I will support, although I will say that this is still not enough in terms of making the whole package of the Amazon tax commensurate with the scale of the crisis.

And that's why I have the other amendment to I would like to take the whole amount that is raised per year up to $500 million.

And then also, I would like to know when I can move my amendments to this amendment.

I'm not clear which point you would like me to come in, but just wanted to flag that.

Okay.

Thank you, Council Member Sawant, for your comments.

Did I see another hand?

Okay.

Before we consider, it's been moved and seconded for this amendment, amendment number 20. consider voting on Amendment 20. Council Member Swann, I'll come back to you if there's not additional comments on Amendment 20. Council Colleagues, any comments on Amendment 20?

Okay, Council Member Swann, I'm not seeing additional comments.

If you would like to move any of your amendments, either A, B, or C, I believe now is the time to consider that.

Thank you.

First, I move to amend Amendment 20 as presented on Amendment 20A.

Sorry, that's a sentence with lots of amendments, but I move to amend I move to amend amendment 20 as presented on amendment 20A.

My office circulated a copy of this earlier this morning.

As I said before, this amendment simply takes the place of amendment 15, which was presented by my office as a standalone amendment before amendment 20 came into existence, and this amendment would raise an additional $293 million per year to the progressive revenues by raising the tax rate.

And the reason is that the mayor has just announced an austerity budget.

She has announced that there would be the city of Seattle.

The city of Seattle is currently facing at least $293 million of cuts.

I believe that is only the first round of cuts.

There will be more budget cuts coming.

Budget cuts means all the burden is placed on social programs that the most marginalized in our communities of color rely on.

Also, it means mandatory furloughs and loss of jobs entirely for our city of Seattle employees.

I would urge the council to adopt a budget in the coming weeks that is a zero cuts budget.

Lastly, I will say that the mayor has said that the budget cuts are unavoidable.

That is absolutely dishonest and unconscionable.

There is no excuse for the cost of the recession to be forced on working people and those in most need of public services.

Thank you, Council Member Swann.

It's been moved.

Is there a second?

Hearing no second, the motion fails.

Council Member Swann, do you want to move to your next amendment?

Yes, thank you.

I move to amend Amendment 20 as presented on Amendment 20B.

Again, this is a replica of Amendment 16, which we have adopted to fit into the structure of Amendment 20. And this amendment would put an additional $50 million, which is, you know, $50 odd million.

Tom had the exact figure.

$50 million to the revenues by raising the tax rate and put those funds into building 1,000 homes in the central district to begin to reverse racist gentrification.

As Reverend Carrie Anderson, pastor of Seattle's first African Methodist Episcopal Church, said earlier this month at the press conference that we had unveiling this call for 1,000 new affordable homes in the Central District for the Black community.

To quote him, he said, simply put, if Black lives matter, then affordable housing for Black families in the Central Area should matter.

The Central District used to be greater than 70% African-American some decades ago, and now it is less than 18% African-American because first there was racist gentrification, and now there's economic gentrification, and of course, that hits communities of color and particularly the black community and the native community, the hardest with private developers, gentrifying with active support from the political establishment, blocking rent control, underfunding affordable housing and taking land from churches.

I would underscore that this amendment has powerful support through the letter signed by 220 faith leaders and activists that all council members have received.

And I want to make it clear that These, that we are talking about additional dollars because we don't want communities of color and the marginalized to be pitted against each other in a robbing Peter to pay Paul kind of scenario where there's very limited funds from progressive revenues.

And then we have to struggle to prioritize all the needs what we're talking about is prioritizing 1000 homes for black families in the central district.

in addition to building affordable housing throughout the city for all our needy communities.

And so I just want to clarify that these homes are not already included in the Democrats' Amazon tax legislation.

According to central staff, the Democrats' legislation would build about 2,300 permanent supportive housing units and 900 units at 30 to 50 area median income over the next 10 years, even with the slight increase in revenue under amendment 20 there is no way that the democratic legislation will fund a thousand homes in the central district the math unfortunately is unforgiving so I would urge a second to this amendment and also a vote for passage of this amendment.

Thank you council member Sawant.

It's been moved.

Is there a second?

Hearing none, the motion fails.

Council members, please go ahead with your next amendment, and we can come back to some of these items as we do additional debate, but I want to make sure you get to that item C.

I move to amend Amendment 20 as presented on Amendment 20C.

Again, this is the same as Amendment 17, restructured for fitting into Amendment 20. And it would add $50 million to the revenues by raising the tax rate to fund the Green New Deal projects and job creation.

I would start by making the same argument that I made earlier, that we're not talking about restructuring a limited pie, but actually increasing the amounts of revenue so that we can build affordable housing for black families in the central district, affordable housing throughout the city, and expand Green New Deal programs.

Last year, the city council voted for the Green New Deal resolution and declared a commitment, quote, to fund and establish dedicated progressive revenue sources for its Green New Deal, unquote.

This amendment would do just that, and I wanted to paraphrase Amanda Sorrell, who spoke on behalf of 350 Seattle, which is We have a partner organization in the tax Amazon coordinating committee who said that we want action to represent the real commitment to the Green New Deal.

This would invest in the Green New Deal, energy efficiency upgrades to homes, investment in renewables, and predominantly, that's most important because it's also a climate justice question, it will create or support over 20,000 jobs which would greatly benefit marginalized communities.

I really thank I want to thank all of you for your support.

I want to thank all of you for your support.

I want to thank all of you for your support.

I want to thank all of you for your support.

I want to thank all of you for your support.

I want to thank all of you for your support.

I want to thank all of you for your support.

I want to thank all of you for your support.

I want to thank all of you for your support.

I want to thank all of you for your support.

I want to thank all of you for your support.

I want to thank all of you for your support.

I want to thank all of you for your support.

I want to thank all of you for your support.

funding for the Green New Deal.

And even if there may be some funds here or there, it's not enough money overall.

Ultimately, as I said, the mathematics of dollars that are available to ordinary people, poor people, for the fight for climate justice, those dollars have an unforgiving mathematics.

And if we don't put dollars on the table that are commensurate with the crisis, then That would come, you know, one thing would come at the expense of something else.

So if you're going to fund Green New Deal with limited funds, that would come at the expense of COVID relief, homes and services.

If you fund homes, it would come at the expense of Green New Deal services and COVID relief.

So it's just moving the pieces around.

I don't agree with that.

I think that would be wrong on our part.

And that's why we need to raise the tax so that there's sufficient funds.

And these are bare minimum sufficient funds.

I wouldn't say that they're sufficient even with the summit.

Thank you very much, Councilmember Swamp, for the overview.

It's been moved.

Is there a second?

Second.

It's been seconded.

Councilmembers, we have in front of us amendment number 17, is that correct, which is now C?

Yes.

Okay, great.

Councilmembers, we have amendment 17, which is in front of us, which is a relabeled amendment 20C.

Madam Chair, if I could, it's actually technically Amendment 20C.

So it's Amendment C to Amendment 20. Amendment 17 is actually a standalone amendment.

OK.

Just on a technical basis.

Yeah, I think that's what she meant.

Sorry.

Sorry for that.

Because that's what you meant.

That's why I said yes.

That's OK.

So yeah, the content of original Amendment 17 is now in front of us, retitled Amendment C to Amendment 20, just for the purpose of clarification.

So colleagues, if you would like to look at the effect statement, Tom, I'm sorry, Dan, if you don't mind, since the effect statement, if I'm correct, is the same in amendment C.

Could you please pull up the effect statement for us so that we can look at that?

Okay, it's been moved and seconded.

We will entertain comments and questions on this item.

I am not seeing any hands.

Council Member Juarez, did you have something you'd like to say?

I did.

Thank you.

Thank you, Madam Chair.

I just wanted to follow up with and ask Council Member Sawant a question because you did allude to it, Council Member Sawant, and I know we've had discussions.

I want to thank you for your advocacy on the climate change issue, that you believe that the base legislation and some of the amendments don't adequately address the legislation that we passed in support of climate change and the money that we've dedicated to this effort.

So I gave you the second because I wanted to hear more why you felt that it was deficient in addressing the climate change issue and the needed funds to promote that purpose.

Thank you.

Council Member Sawant.

I'm sorry, you may be frozen or on mute.

Did you want to respond to Councilmember Juarez's question?

Sorry, yes, I was struggling to find the mute button.

I can accept that there is nothing new that I can add beyond what I've already said.

So basically, I would be reiterating what I've said.

I appreciate your question, Councilmember Juarez.

The one problem is that in the base legislation that's under consideration from the Democrats on the city council, there is actually no dedicated money for the kind of projects we are talking about, which is Green New Deal, retrofitting of massive numbers of homes.

And these would be, you know, residential places for working class and middle class and poor people.

And this would actually, you know, directly address the question of climate justice and also the question of carbon emissions, because building emissions are one of the biggest sources of emissions of of harm that we see in terms of if you want to actually reach the zero carbon goal that Seattle has.

So in that sense, it's an unfunded mandate in the existing legislation.

But I think fundamentally what needs to be taken into account is the other point I made, which is that most of the things that are under consideration in the base legislation in the democrats amazon tax i strongly support as i've you know i've made it very abundantly clear that i support any dollar that we can win through progressive revenues for any of these funds whether it's covid relief whether it's direct assistance to immigrant families whether it is affordable housing or green new deal We are committed to each.

Each of them is going to get very little funding and each of them is going to struggle against the other.

Rather than pitting all of these social needs which are equally urgent, we should make more revenues possible.

It is just a simple, as I said, mathematics.

that is the most important point under consideration.

Thank you budget chair Mosqueda and thank you to the sponsor of this amendment and council member Juarez for having discussion on this amendment.

I think that the spending priorities on this amendment are right and correct.

I am still interested in maintaining the rates that the budget chair has I wanted to ask the question, I know that we will be getting to the spending plan at a later portion of this committee hearing.

I want to just double check that there is an opportunity to fund Green New Deal and weatherization programs later today.

I guess it will be this afternoon, shortly later this afternoon.

Thank you, Councilmember Strauss.

You led into my comments.

I will make some comments about that.

Just as a reminder to folks, we are going to get into the details of the spend plan allocations in the discussion that will come up on the 17th.

If you're asking if the categories of spending include Green New Deal type efforts, I think that is correct.

I see Allie nodding to allow for the central staff to provide you with the official answer.

I wonder, Allie, if you'd like to take yourself off of mute to comment on the categories of spend and how that will tee us up for potential conversation in addition to this discussion in the July 15th meeting.

Thank you, Chair Mosqueda, Councilmembers.

The proposed substitute to the spending plan bill includes a specific category for Green New Deal investment.

So it would allow for use of the tax proceeds for specific to Green New Deal or to fall under other categories.

So as Chair Mosqueda said, it would be authorized category of spending that would be included in the initial spending plan, Council Bill 119811, and then could get further detailed in terms of the specific that we have in front of us.

I would like to know if you have any comments on the allocation of funds for that category and any programmatic details you wanted to provide through the resolution that would be discussed later in July.

Council colleagues, I will provide a few comments on this.

Thank you for bringing million dollars and we will have the opportunity to have a robust discussion about the spend allocation on the July 15th meeting.

I know that making sure that the Green New Deal and energy efficiency elements, including weatherization for not just existing buildings, but used as a way to prevent displacement is a really important issue for this council and a number of council members.

I would like to signal that I am going to vote no on this amendment.

However, I think that there is a lot of shared interest in making sure that we elevate elements of the Green New Deal in the final spend plan.

I look forward to working with you all on amendments that would complement the funding that is already included in the Jump Start spend plan for deep green affordable housing.

That includes retrofitting and construction and strong labor standards included in the plan, and would require deep green building standards on new affordable housing created through this existing plan.

Creating green affordable housing near transit, as this plan already discusses with strong labor standards, is one of the best ways that we can make sure that we combat climate change.

But in addition to that, I think the call from both the sponsor of this amendment and other members of the council, in addition to the community, have underscored the importance for us to explore other ways to focus on anti-displacement investments on existing low-income homeowners and we need to make sure that we are using other energy efficiency strategies to assist with renewable energy sources and creating the retrofits needed for our community to address the deal.

I am voting no on this amendment, but I am signaling to you that I think this is an important discussion that we will have in the spend plan discussion and amendments on the 15th.

And and again adding 40 million to the base amount that is known plus the additional amount over 1 billion Will make sure that there's additional dollars to go around I understand your point that there needs to be direct dollars allocated to additional green new deal elements I don't want to I don't want to miss that point that you said.

I appreciate that.

And I see your hand up.

So we'll come back to you before we close out.

But I do think that there is ample time to have a conversation about how much dollars go into each categories when we have that spend plan detailed discussion on the 15th.

So for that reason today, I'll be voting no on this amendment, but support the ongoing conversation and allocations through discussion and amendments on the 15th.

Any additional comments?

Okay, Council Member Swatt, do you want to close us out on this item?

I just wanted to say, of course, we are going to come back to the spend allocation, as it's called, but for just for people who are watching this, what that means is basically the council will be coming back in a few days to discuss how much, if and when we vote on an Amazon tax today, which I hope we do.

We will then discuss how much of those dollars should go to each of the programs that council members have declared their interest in.

And as I've said before, my office, Socialist Alternative, our movement supports all of those categories.

That's what we've been fighting for, which is the reason we are even here today with the council.

I agree that there is ample time to discuss how much for each category, but just one point I would reiterate is that today we are talking about how much we are going to raise as total revenues, and as I said, I'm going to support the amendment to raise the additional $40 million, but even that won't the $50 million of the basic funding that we're talking about for Green New Deal additionally, in addition to also funding COVID relief, direct assistance to households, and affordable housing.

And not to mention, we don't have money allocated for the housing for African-American households to come back to the central district, because if all of it is struggling against each other, then only some will be funded.

I'm in complete agreement with the language that we have all used about how we are committed to all of this, but if you don't have the money, then you don't have the money to fund actual things.

And as I said, we are not talking about moving around the funds, we're talking about additional funds, and that's why I would urge a yes vote on this amendment.

Thank you.

Any additional comments?

Okay, hearing no additional comments, again, Council Member Swann, thank you for your comments.

We will provide ample time for this discussion if this amendment does not pass for the 15th.

And I think it would be helpful as just a nod to central staff, Ali, if we can continue to work with you to identify what is in the current allocation for the spend plan as we think about layering additional pieces that are Green New Deal complements in the future.

Okay.

Will the clerk please call the roll on Amendment C to Amendment 20?

Strauss?

Aye.

Council President Gonzalez?

Aye.

Nay.

Nay.

I'm sorry.

All right.

Council Member Herbold?

No.

Juarez?

No.

Lewis?

No.

Morales?

Peterson?

No.

Sawant?

Aye.

Chair Mosqueda?

No.

One in favor, eight opposed.

Thank you, Madam Clerk.

On the motion for C, the amendment fails.

Are there any additional amendments to Amendment 20 that folks would like to discuss?

I have not seen any, but I wanted to just double check.

Okay, Council Colleagues, we have in front of us Amendment 20. It has been described by central staff and Council Member Morales and I as the co-sponsors of this amendment.

Are there other conversations, is there any other debate that people would like to have or items that they'd like to say about this before we consider Amendment 20?

Please go ahead, Council Member Sawant.

Thank you.

I just wanted to make one clarifying point for the activists and community members who are watching this, that for the amendments that the community and the movement is strongly fighting for that don't win today, just wanted to remind everybody that we will be building a real campaign around the people's budget and that we should continue pushing for the things that we believe our community needs and that we should continue the conversation after today.

Thank you Council Member Sawant.

Council Member Morales, as co-sponsor, would you like to say any closing comments before the final vote?

Thank you, Councilmember Morales.

No, that's me.

Councilmember Mosqueda.

I just want to thank everybody.

I do want to thank central staff in particular, Allie, Tom, Mike, Tracy, sorry, Dan and Tracy for the incredible work that you have done.

I know that you've been working hours and hours, your dedication to public service is commendable and you have been working tirelessly for families in our city while sacrificing time with your own families.

And we know that you haven't had a break since the beginning of the year.

So I want to thank you for your time and your talent and your acumen and your intellect.

And I do hope that you get some respite this holiday weekend.

Um, and I just want to thank colleagues for, um, for this consideration.

We have a, um, We have a real opportunity to make an important structural change in our city.

And I know that this is going to be an important change in how we generate revenue in the city.

And this amendment can help us move dramatically toward providing opportunities to invest in our communities, to invest in housing.

And as we've been saying, once we have a chance to talk about the spend plan, to invest in building community wealth and in transitioning away from fossil fuels.

So this is a huge win for our community.

And I want to thank the advocates and the partners who have helped us get here.

Well said.

Thank you very much, Council Member Morales.

I also just want to say thank you.

Thank you to our entire council.

very helpful with thinking through ways for us to not only raise revenue with the initial proposals that were introduced, but how to continually push for that dollar amount to go up.

I really appreciate the amendments and the conversations we've had today.

These will not go away, as Councilmember Swamp mentioned.

We will have ongoing discussions over the next week and a half here about that dedicated I want to signalize my ongoing support for additional affordable housing and working with the council colleagues and community members.

I think we can potentially find ways to do the geographic specific locations for historically marginalized communities, specifically black homeowners and black and brown communities to have more affordable housing.

I look forward to working with you on that possible strategy.

Again, just echoing my interest We are also looking at anti-displacement investments for existing homeowners and assisting with conversion for more renewable energy sources and retrofits throughout the city.

Those conversations are ongoing.

Really excited about the proposal that is in front of us to continue to bring the known dollar amount up by $40 million.

to have the discussion here about the other components in the bill.

So this is not the end, but it does bring us to the end of the category, oh, not sorry, the end of A, B, and C discussion on Amendment 20. And if this passes right now, we will be able to know that we will have $214.3 million in hand to provide immediate relief for COVID-related issues, help we can address that.

We can stem the tide of cuts that will be coming next year with an all austerity budget by having revenue in hand.

We can address that.

And in the out years, really create a resilient community that's more equitable and provides affordable housing and the appropriate shelter for folks so that people can get off the street.

With that, Madam Clerk, will you please call the roll on amendment 20?

Herbold aye Juarez aye Lewis aye Morales aye Peterson aye Swann aye Chair Mosqueda aye.

Nine in favor.

None opposed.

Wonderful.

Thank you.

It is unanimous.

The motion carries and the amendment is adopted.

Before we leave the tax structure rate amendments, Council Member Sawant, you did have Amendment 11. Did you want to talk about that?

I'm not sure exactly what you'd like to do there, but I want to give you a chance to talk about that.

Yes, I would like to quickly talk about that and start by saying that this amendment, just again a technical clarification to reiterate it, is not in conflict with Amendment 20 as was asserted before.

For years, our movement has been demanding tax Amazon and other big businesses, tax on Amazon and other big businesses.

And the goal is to end the corporate tax haven and actually meet human needs.

And as many stated in public comment today and before, if we vote on an Amazon tax legislation today, it will be because of the movement and entirely because of the thousands of people who have been fighting on the front lines for this.

And that includes many who have been on the front lines for the Black Lives Matter movement and the movement against police violence and to end racism and oppression because they understand that it is connected to also ending racist gentrification and ending the criminal underfunding of public schools and all the other needs that we have in our society that hits, the underfunding hits the communities of color the hardest.

And as I said, It will be a moment of pride for the movement if we have the city council today pass an Amazon tax legislation.

But we also have to be sober about how much is accomplished at the same time.

So this amendment is to, once again, as I've said many times before, to provide enough revenues to be commensurate with the level of what's needed in terms of COVID relief, social housing, Green New Deal projects.

last but not least, living wage jobs, which is going to be an increasingly important criterion as we head deeper into this cruel jobless recession.

Restoring this funding level will build more than 10,000 social homes, retrofit tens of thousands of homes to Green New Deal standards, and create or support 34,000 jobs in the first decade alone.

Imagine what a transformation that would be In the context of the recession that we are facing, as Harvard economist Kenneth S. Rogoff has said, we might see the mother of all financial crises.

A report commissioned last year by the Seattle Metropolitan Chamber of Commerce, I don't think they like the conclusions of this study, but it found that $410 million need to be spent urgently in the greater Seattle area each year to address the housing crisis.

Earlier this year, the McKenzie study found that the region had lost 112,000 affordable homes since 2010. And that was, you know, that was all pre-COVID and pre-pandemic.

And so we now have, you know, triple crisis of COVID.

the pandemic, the housing unaffordability, and now joblessness.

If we don't raise the revenues commensurate with the crisis, we simply will not be able to accomplish what we say we want to accomplish.

And so I would urge a second for this amendment and a vote for this amendment.

Amendment number 11 has been moved.

Is there a second?

Hearing none, the motion fails.

Thank you very much to central staff for your work to get us through this.

I want to continue to move through the other amendments here, council colleagues, and we'll have some closing comments at the end as well if you would like to talk about the overall package, the amount that's been raised, and we have about another hour and a half here.

I'm hoping to give us at least a 20 or 30 minute break for lunch, but I think we can do it, guys.

Let's do this.

So let's move on to the next slide to get us into other amendments.

And if you could be so kind as we do discuss these once we've gone through the high level overview of where there may be conflicts, if you could put the effect statement on the screen as well.

Thank you very much.

Okay.

So the third category and last category of amendments that should be on your screen now are I divided in turn into three subgroups.

The first subgroup at the top of your screen are amendments that are freestanding and each can be considered on its own without affecting any other amendment.

So if you'll allow me a brief moment, I will bring up amendment number one, which is sponsored by council members Sawant and

her bold.

Okay.

This amendment would change the imposition date of the payroll tax from January 1st of 2021. It would move it forward in time so that the tax would begin to be imposed on August 1 of 2020. This would add approximately 74 and a half million dollars of additional revenue when the tax begins to be generated.

The 2021 tax bills would be due at the same time as the additional months in 2020, so that all of the first payments would be due on February 1 of 2022. The entire amount, approximately $173.5 million for 2021 collections, plus $74.5 million of 2020 collections would all be available for spending in the 2021 budget.

Thank you very much, Dan.

Why don't we go ahead and have you, if there's nothing in conflict with this, is this a standalone item?

Okay.

This is a standalone item.

Okay.

Council colleagues, this has been, I have a motion and a second.

I have a motion put forward to us from Councilmembers Sawant and Herbold.

Would you like to move Councilmember Herbold?

I move to amend Council Bill 119810 as presented on amendment one.

Councilmember Herbold and then Councilmember Solano.

Thank you.

So as mentioned by Council Central staff, this amendment would generate an additional $74.5 million in additional city revenue that would be collected on February 1st, 2022. It would be eligible for spending in 2021. I have heard some concerns that In order for it to be the imposition date to be in August 2020, the eligibility trigger has to be based on 2019 revenues.

I just want to remind folks that even though that is the case, the businesses will only be taxed for the number of jobs over the income thresholds in 2021. So for instance, if a business is deemed to be eligible based on 2029 revenues of more than $7 million.

But in 2020, that business's gross revenue, gross payroll, sorry, not gross revenues, gross payroll, if in 2021, I'm sorry, I'm getting my numbers mixed up.

If in 2019, the gross payroll is 7 million or more, that business is then eligible.

But if it turns out in 2020, that business's gross revenue has, or gross payroll has dropped to say $6 million, that business would still be eligible to pay the tax, but they will only be having to pay the tax on the incomes above the income thresholds, the number of incomes above the income thresholds in 2020. So if there's any concern that jobs that were, or incomes, salaries that were eligible in 2019 would be taxed regardless of whether or not that same number of jobs existed in 2020, The way the structure of the legislation is drafted, that would not be the case.

I'm trying to respond to the concerns I have heard from the budget chair about this amendment and trying to ameliorate some of those concerns and trying to offer some reassurances about the concerns about impacts on this.

Thank you and thank you Councilmember Herbold for the clarifications.

This amendment would bring in additional 74 million dollars which are urgently needed funds especially as we sit here in the middle of the pandemic and so this would undoubtedly help.

That's 74.5 million dollars.

It is a small amount for a big business, and any delay would be that money left in big businesses' pocket, which they actually don't need, but $74.5 million for our community, which would make a huge difference in terms of how quickly and how widely we can provide for affordable housing and to provide relief from the pandemic.

And I just wanted to point out that the original legislation from our movement for the Amazon tax was going to start on June 1st.

And unfortunately, we now cannot get those two months back that the city council ended up delaying.

I hope that the council supports this amendment because it is a small change as far as big business is concerned, but it would mean a lot to the communities who need these funds.

And just lastly, I would say that many in public comment and many have written to you in emails to the council that we should not delay a vote on this.

But I think they also meant not only that vote on the Amazon tax today, but also don't delay the disbursement of funds so that communities can begin healing from those dollars.

Thank you, Councilmember Sawant.

Are there additional comments?

Okay, Councilmember Strauss.

Thank you.

Thank you, Chair Mosqueda.

I think that while I will share that I'll be voting no on this amendment, I think that it is important to allow for businesses time to prepare for this tax.

As we all know, 2019 is a very different year than this year, and this year will be a very different year than next year.

I think I believe in the importance of moving quickly on the passage of this legislation and the need to provide predictability and the ability for taxpayers to be able to stabilize between now and January.

I think this was an important aspect of the proposal that you put together for me, and I would like to retain the January 2021 date.

Thank you.

Thank you, Council Member Strauss.

additional comments.

Councilmember Morales.

Thank you, Councilmember Mosqueda.

Sorry, I have a nine-year-old running around here.

She's very distracting.

I want to signal my support for this.

As Councilmember Sawant mentioned, we did try with the previous legislation to have something begin sooner, even if it won't be collected until later.

I think the ability to assess the city.

I want to make sure that we can do that sooner and bring in additional revenue to the city, especially right now as we have a $300 million shortfall is an important option on the table that we should take advantage of.

I want to signal that I will be supporting this.

I, too, support making sure that we get increased revenue, but I will be voting no on today's amendment.

Amendment number one, unfortunately, I cannot support.

The effective date on August 1st of 2020 would rely on data from companies that have not yet adjusted to the new business reality in a post-COVID world.

And I think as we want to see revenue come in to make sure that there is relief for food assistance, housing assistance, small business support, stability for immigrants and refugees.

We all have that same goal, but allowing for the revenue to be collected in 2022 based on 2021 payroll data.

allows for us to have a better understanding of which of the businesses that are currently here will continue to be here in next year's budget cycle.

And for that reason alone, I am voting no today.

Council Member Solano to close this out and then I'll also ask Council Member Herbold if she has additional comments.

Thank you.

I just wanted to clarify whether the start date is August or January, businesses won't have to pay any tax until early 2022. So I'm not exactly clear what the argument is from council members for the businesses needing time.

And I also want to put this in perspective.

You know, there's this conversation about over taxpayers need time to prepare.

We're talking about the largest corporations in our city.

And by that measure, some of the most stable corporations in our city.

to prepare to pay something like a 0.7% tax rate when working class families have been paying something like a 17% tax rate year after year.

And as far as giving the largest and the most stable and the most cash stable, you know, cash rich corporations time to prepare, working people who lost their jobs, you know, by now around 45 million nationwide, they had no preparation.

Nobody told them you're going to have a year to prepare or several months to prepare for this massive cratering in your financial situation.

People were just laid off because that's the reality of recession.

It hits working people.

And so I would urge you all to vote yes on this amendment.

Thank you, Council Member Sawant.

Council Member Herbold, as a co-sponsor of this, are there any additional closing comments from you?

Yes.

Oh, so sorry.

Please go ahead.

Yes.

Thank you.

Just in case you need it.

My cursor was not moving to the mute button very quickly.

So yes, thank you so much.

I appreciate the opportunity to offer one last pitch for this amendment.

I think it's critically important considering that we know that years 2021 and 2022 are going to be very difficult years for our city, not just as it relates to the delivery of city services, but also as it relates to the need to consider layoffs of city staff.

And so that is, I think, why this, one of the reasons why this amendment is so important.

We talk about not wanting to do austerity budgeting.

We know that it is going to be even harder next year to, even with this new revenue source, to maintain our current planned investments, as well as maintaining the city staff necessary to deliver those investments.

And so I think in order to really adhere to the principles of non-austerity budgeting, we need to be looking forward to 2021, where our city budget director has warned us that even with new revenue, we are going to be needing to consider layoffs or furloughs.

Thank you.

Thank you, Council Member Herbold.

Okay, seeing no additional comments, will the clerk please call the roll on adoption of Amendment 1?

Strauss?

Nay.

Council President Gonzalez?

No.

Herbold?

Aye.

Juarez?

No.

Lewis?

No.

Morales?

Aye.

Peterson.

No.

Swant.

Aye.

Chair Mosqueda.

Aye.

Oh, I'm sorry.

No.

Three in favor.

Six opposed.

Wonderful.

Six opposed.

Got you.

Okay, three in favor, six opposed.

The amendment fails and the amendment is not adopted.

Central staff, thank you so much.

We have about another hour and 10 minutes.

Let's move on to amendment number five.

Okay, amendment five is sponsored by council members Peterson and Juarez.

This amendment would require voter approval of the tax before the tax itself becomes effective.

A second step, if this amendment is passed, would be for the council to take up a separate piece of legislation that would place the tax on the November ballot And in order to do so, council would need to authorize such legislation by August 4th, which is King County records and elections cutoff for notification that jurisdictions want to place any items on the November 2020 ballot.

Okay, thank you very much.

Council Member Peterson and Juarez, this is your amendment.

Would you like to move it?

Thank you.

Yes.

Thank you, Budget Chair.

I'd like to move to amend Council Bill 119810 with Amendment Number 5 to put this tax measure onto the November ballot.

Second.

It's been moved and seconded.

Council Members, as sponsors of this amendment, if you'd like to speak to it first, please go ahead.

Council Member Peterson or Juarez?

go ahead.

Thank you.

Thank you.

I can go first.

Um, so we discussed this a little bit at council briefing and I know that in the not so distant past, there were some council members who were interested in if there were a major business tax measure to put that on the ballot for voters to consider.

Um, it would be put on the ballot this November and if voters approve it, it would start January 1st and just six months.

Um, depending on which amendments pass today and what the final spending plan is, the jumpstart Seattle proposal, I believe is generally well-crafted, yet it's also four times as large as the head tax.

And we remember in 2018, the head tax, there were lots of concerns expressed in the general public and in the business community when it was finalized.

And so, so that we don't have the same sort of backlash from that type of ordinance today, putting it in front of the voters to decide, I think, is prudent.

It's also, I believe, will be the largest tax that the city government has passed in recent history, and it's very typical to put tax measures on the ballot for people to decide.

We do that for, like, the Moog Seattle levy, for example, the Families and Education levy.

housing levy, and for other good purposes, we put that on the ballot for voters to decide.

Also, I believe putting it on the ballot would insulate it from a referendum.

So if you put it on the ballot, the voters will make that a permanent law if they pass it.

Thank you.

Thank you.

Council Member Juarez, did you want to chime in?

Yes, thank you very much.

I'm just going to be very brief, but I do agree with everything Councilor Peterson said, but let me do a couple of thank yous in here because I think it's important for the city to hear us, for those of us that were around the first time this came.

I really want to thank Councilor Sawant.

I've been serving with her since 2016 and her long history of promoting a progressive tax and her movement.

I also want to thank you, Councilor Musqueda, because We've been able to have open and honest discussions about where we agree and where we disagree, and we're still cool.

So I appreciate that.

So let me be clear.

I support a progressive tax.

I supported the countywide approach in the spring of 2019 and worked closely with state leadership as well as Seattle City Council and some county folks as well.

I still support a countywide approach, and I'll tell you why and why I still believe that this should go on the ballot.

It's the same concern that I've been saying since February, March.

And now we're in what we call this trifecta of a global pandemic, a recession and political and social unrest based on racism and unequal inequity policing and all of those issues that we've been discussing for the last six months.

We don't know the length, the duration, the continued human destruction and toll this global pandemic will inflict on our humanity and our people's lives.

We don't know the depth, the length, or the duration of this pandemic-fueled recession will have our economic landscape in the future.

Right now, we do know, as was stated earlier this morning, we do have a $300 million budget shortfall.

I guess what I'm concerned the most about is that since there's a lot of unknowns, and I know we try to determine and try to make up for that with staff and looking at pre-COVID conditions, making determinations about what this recession is going to look like, what data, the unpredictable revenue and forecast.

For me, and I know the facts can be used the other way as well, like that's precisely why we need a tax from the Seattle City Council again, but I think it should go to the voters.

In short, because we don't know the COVID effects of the recession and what the revenue will be and the long-term effects, I think it should go to the voters.

So let me just say one last thing.

Seattle has a well-established democratic tradition of giving voters a final say.

In the last 15 years, Seattle voters have approved over 11 city levies from library to housing to education to transportation to parks.

Seattle voters have also supported over six countywide levies for human services, seniors, children, and parks, and Seattle voters has supported two multi-billion dollar regional levies for transportation, that is, down transit.

In 2006, Seattle voters approved bridging the gap, a transportation measure which included a small local payroll tax on business, basically a head tax.

In 2018, I believe council made an error.

The council passed a payroll tax, discovered it was out of touch with voter sentiment, and promptly repealed it.

I was one of those that voted to repeal it.

I can go into those details another time.

I think to ensure that the taxation meets with public expectations, it needs to be put out for voter approval.

I agree with what Council Member Peterson said.

I really like how Council Member Skater reached out, nailed down the specifics, talked to business, talked to labor, talked to myself, talked to particular groups about how this tax would actually work.

My concern is that I believe the voters should have the final say.

I like the jumpstart proposal because it does limit the taxes impact to high paying jobs, protecting low and middle income jobs.

It provides for small businesses and invest in our most vulnerable communities, communities, people of color, while also building more affordable housing.

I think it's a great proposal to put in front of the voters in the spirit of democracy and giving all the voters a final say.

And with that, thank you.

Thank you, Madam Chair.

Thank you very much Councilmember Juarez and Councilmember Peterson as co-sponsors of this.

Council colleagues, I'm going to signal that I will be voting no on this amendment today.

I do appreciate the spirit in which the amendment was brought forward.

I know that the comments that the co-sponsors have made now and previously We are in alignment, we want to see relief for COVID in the near term.

We wanna make sure small businesses and working families have the housing and support that they need in the out years.

And we want to soften the blow of an all austerity budget by providing progressive revenue.

I know that there is a shared values on what this potential proposal could do.

I am going to be voting no though, because I just don't think that we can wait for a November ballot.

We know that there's immediate relief that needs to get out this summer, and by passing this progressive revenue package councilmatically, we can rely or we can have assurances that those emergency funds will be replenished by doing the councilmatic vote today and hopefully next week on Monday.

We also know that then we can book additional revenue in our 2021-2022 budget.

which we would not be able to do if it were a November ballot.

So I really appreciate the conversations that we've had.

Just like other pieces of legislation, as we work with folks in the community to identify the stakeholders that would be impacted or would benefit from legislation, a robust conversation has happened.

And I would encourage folks to vote on this piece of legislation councilmatically and that we can rely on this revenue now for emergency relief and to book it into our 2021-2022 budget.

Are there any additional comments before we move to a vote?

Councilmember Pedersen.

which we will be voting on separately to use the emergency fund and the revenue stabilization fund to deal with COVID relief.

I do support elements of that.

You make a good point, Budget Chair Mosqueda, that to ensure the replenishment of those funds, it would help to have this other source in the future, the payroll tax.

I believe that's something that we could visit later, that putting this on the ballot would not does not mean we can't support the, we still can support the COVID relief using the emergency funds.

I just wanted to clarify that.

Thank you.

Thank you, Council Member Peterson for your comments and clarification.

Additional comments?

Council Member Morales.

Just quickly, I want to say that I don't support this amendment.

I feel like we as elected leaders are elected to make hard decisions, including voting on tax packages, including saying no to large corporations.

That's not a hard decision for me personally.

But what is also not hard for me in wanting to pass this Now, is that I hear every time we have another levy on the ballot.

I hear from low income homeowners in my community.

who are on the brink of getting pushed out of the city because they can't afford to keep bearing the burden of all of these levies.

This is a way for us to shift that burden away from low income homeowners so that they don't have to continue to bear that burden.

And I don't think that waiting several more months to put this on the ballot serves them, serves my district.

And for that reason, I will not be supporting this amendment.

we have a motion and a second.

Councilmember Gonzales?

and their intent here.

I do think that the sentiment of the public has drastically changed in the last couple of years since we considered the prior tax on large corporations.

I also think that this is fundamentally different than the employee hours tax that we proposed in that unfortunately we were put in a position to have to repeal it.

And primarily, I say that because this tax is a payroll tax.

And if for folks who weren't around in 2018, the head tax that we had originally proposed was supposed to evolve into a payroll tax after 2018. I believe, two years.

And that was something, that concept, that model actually was being advocated by members in the business community at the time as something that would be more scalable and more progressive and more easily absorbed, particularly by smaller-sized businesses.

So it was discussed as a more equitable way to pursue this type of revenue.

And so I'm of the mind now that this is the right approach and that this is the right model, meaning that the payroll tax way that this jumpstart sale has been structured in, I think, is the right choice for us to go.

Now, in terms of the argument around whether or not this should be on the ballot or not.

There have been some citations by the sponsors of this amendment to the housing levy, education levy, transit levies, a whole host of other levies.

But I think it's really important for us to be clear with each other and with the public that those levies were property tax levies.

And in some instances, they were sales tax levies.

Now, those are taxes that are levied against individual people throughout the city at a mass proportion.

So it means that 100% of every person who owns property or rents property or who purchases goods within our city would be subject to that tax liability.

It is appropriate under those circumstances to send those kinds of revenue proposals to the general public to undergo the democratic process and to have people, individuals at a mass rate throughout the city who are going to incur a tax liability as a result of those proposals to say yes or no to whether or not they want to tax themselves as individuals in order to continue to fund services that the city can provide, whether that's quality preschool, whether it's additional affordable housing, whether it's more transit services, that is appropriate for us to propose that to the voters of the city of Seattle to accept that tax liability.

This is fundamentally different because we're talking about a payroll tax that will impose tax liability on a small number of corporations, which in spite of the Supreme Court's decision, They are not people.

They are not humans.

And this is a very small percentage of the overall population or constituency in the city of Seattle.

So I believe it's appropriate for the city council to take councilmanic action as it relates to the imposition of this payroll tax.

And I would urge my colleagues to reject this amendment and to support the concept that as a representative democracy that is the city council, that we have the authority and indeed the urgent need to take action on this payroll tax today.

Thank you, Chair.

Thank you, Council President.

Folks, I am going to call the question.

I do think that Council Member Juarez would like to speak to this.

I have given the council sponsors the opportunity to speak to it in closing out.

So I'd like to call the question.

Thank you.

Madam Council Member Juarez, Council Member Herbold, I really do want us to move on.

So, okay, very briefly.

Thank you.

I'm sorry.

And I just really feel the need to speak to my support.

I'm sorry, my opposition to this amendment because of prior support that I have expressed to putting a big business tax on the ballot.

I think as recently as probably April said that I believe that that was the way that we should go.

My opinion is very different right now for many of the reasons that we've already heard.

This is fundamentally not a tax on individuals.

So I think the comparisons to property tax levies are not applicable.

And I do agree with the urgency of this council to act now.

But I also want to identify part of the reason for my change in position is because the fundamental structure of this type of payroll tax is different from that what was that was originally proposed.

And the reason why I believe that's so important is because it mirrors a proposal that was introduced at the state legislature that the business community has signaled some support for.

And so my fears about the council acting really relate to not wanting to repeat the experiences that we all, those of us on the council who were on the council, at the time experienced where there was a legitimate threat of referendum after council passage of the employee hours tax.

I believe and I call on the business community to not replicate that scenario because what we are putting forward now largely represents the same structure that there is broad support in the business community for advancing in the state legislature.

Thank you.

Thank you, Councilmember Herbold.

I want to turn it over to Councilmember Juarez to close us out.

Thank you, Councilmember Juarez.

Thank you, and thank you for everyone that responded.

And I want to respond on three levels here.

First of all, I want to make it very clear that we know how to make hard decisions, and some of us have made hard decisions to the detriment of our own personal safety.

I agree with what Councilmember Gonzalez said.

And I do agree that the sentiment of the public has changed drastically, and that's why I do still trust the voters.

I understand the difference between a property tax and a corporate tax.

And the analogy that I was listing and the taxes that I rattled off went to the underlying sentiment that, basically, Seattle voters have been generous in voting yes, whether we're talking about a property tax or we're talking about a levy, and hopefully when we're talking about taxing corporations.

I understand that corporations are not people.

I understand Citizens United.

But that's not what I'm getting at.

I'm not comparing apples and oranges and this and that.

What I'm saying is the underlying character here for me of why I think it goes on a ballot is because I believe that the voters under this jumpstart Seattle would vote yes.

And I think they would vote yes, because we still, even though the conditions have changed, and we're in the middle of this, again, trifecta, of a pandemic, of a recession and social unrest, I believe in the goodwill of the people that they can look around and see what we see and vote yes.

So that's where my faith lies.

I don't want to get into a debate about corporations and a property and why things are different.

I mean, I get that.

But there is a bedrock here of generosity of Seattle voters.

And that's what I was getting to.

So I understand and I'll close it.

I'll leave it at that.

Thank you.

Thank you, Council Member Juarez.

Colleagues, I would like to call the question.

Council Member Peterson, I saw you take yourself off mute.

Just to close this out as a co-sponsor, I'll let you speak to it, and then I really need to move us on.

Thank you.

I just want to point out that I support progressive taxation.

I supported House Bill 2907. I'm sorry it didn't pass.

One of the key differences is that was regional, and I think there was a lot more support for that because it was regional and specifically addressed the crisis of homelessness.

I know that there is agreement among council members about the need for dollars and the need for the spend.

I appreciate the comments that were made today.

I'm going to call the question.

Council President Gonzales.

No.

Herbold.

No.

Juarez.

Yes.

Lewis.

No.

Morales.

No.

Peterson.

Yes.

Sawant.

Nay.

Chair Mosqueda.

No.

2 in favor, 7 opposed.

With a vote of 2 to 7, the motion fails.

The amendment is not adopted.

Central staff, could you please move us on to amendment number 8, the last in this first category here.

Do we still have central staff with us?

And as they tee up their screens and get their audio going, just filibustering, This is amendment number 8 sponsored by Councilmember Peterson on non-profit exemptions.

Dan, are you with us?

Amelia?

just wanna check in to see if we have IT folks who are able to, oh, hi, Dan.

Hi, sorry about that.

We got you, that's okay.

Before you go on, Dan, I just wanna make sure that IT can confirm that they can hear you, because I heard some folks saying that they couldn't hear you very well.

So we may need to turn up your volume or have you speak louder, okay?

Okay, is this okay for folks?

Why don't you go ahead, and if I get notification that they can't hear you, because I can hear you fine, we'll let you know, but try to speak up a little bit if you can.

Okay, very good.

Hang on one sec, please.

Okay.

And IT folks, if you can try to see if you can turn up Dan, that would be helpful too, but Dan, I can definitely hear you.

Okay.

So this is a council bill, sorry, amendment number eight is sponsored by a council member Peterson.

It would, exempt all non-profits from the payroll tax.

The definition of non-profits, I won't read, but it should be on your screen now.

It effectively would exempt all 501c3 type non-profits.

The effect box in the second paragraph describes central staff's estimate and methodology for coming up with the estimate or how this would affect the estimate of tax revenues that would flow from the approval of the bill if this amendment passes.

The information and data that we have from the Employment Security Department at the state has one category for both nonprofits and hospitals of all types, both non-profit and for-profit hospitals.

So we have essentially only one toggle that we can throw that captures the broad description of non-profits that would be exempted here.

And when we throw that toggle, our read of the ESD data is that exempting non-profits along with all hospitals would reduce otherwise anticipated 2021 tax revenues by $9.2 million.

I want to just note that we acknowledge that the $9.2 million is likely on the high side of what the actual reduction would be because it includes some types of hospitals that are for profit.

who would not be subject to the exemption in the amendment.

It also potentially includes other kinds of non-profits, such as 501c4s and other kinds of non-profits that are not 501c3s.

I'd be happy to address any questions, or I can turn this over to the sponsor to speak to his amendment.

Great.

questions.

Councilmember Peterson, would you like to speak to your amendment or move, I'm sorry, would you like to move your amendment?

Yes, thank you, Chair.

I move to amend Council Bill 119810 with Amendment 8 to exempt 501c3 non-profits.

Thank you, Councilmember Peterson.

It's been moved.

Is there a second?

Second.

Second.

Okay, it's been moved and seconded.

Councilmember Peterson, would you like to speak to your amendment?

Thank you.

I think central staff, as usual, explained it very well.

This amendment would exempt 501c3 nonprofits.

There was an exemption for nonprofits in other versions of payroll tax legislation.

I support that exemption.

I know it seems like what we're trying to get at with this payroll tax, in addition to meeting certain needs is that, you know, there have been statements made about large corporations.

Large corporations are able to, you know, are stable, are able to afford certain things.

And I think it's important then that we exempt 501c3 nonprofits who aren't, I think, we're trying to target with this payroll tax on large for-profit corporations.

Thank you, Council Member Peterson.

Appreciate the summary.

I'm not seeing any immediate hands.

Council Colleagues, I'll provide some comments here and if there's others who would like to chime in, please let me know.

Thank you, Councilmember Peterson, for putting forward this amendment.

I know that the spirit in which you've done this is to try to make sure that those who are nonprofits are also recognized for the role that they're playing, I believe, in COVID response.

Just as a reminder, we have a $7 million threshold in Seattle payroll, and this is only applying to salaries starting at $150,000 or more.

As we've heard from folks, the one area that I've heard some of questions raised about whether or not nonprofits could be exempted was specific to nonprofits in the healthcare world.

And there is an amendment that I have teed up for us to discuss potentially next, which is amendment number 14, and would encourage folks to take a look at that amendment.

I think that that might be a nice way to thread the intent of what I believe you were trying to get at, some of the concerns that were raised in nonprofits and healthcare, and the way in which the amendment 14 is presented is only for a short period of time and only applies to an exemption for the salaries between 150 and 400. So the higher wage earners would still have an assessment there.

I really appreciate that you have gone into the detail of your amendments.

I will say though that in working with the broad group of stakeholders that I engaged with on the bill, the folks who were raising issues and wanting to see various changes, exemption to non-profit providers were flagged as a possible concern, and want to just say that many of the non-profits that are included here have been part of the coalition partners.

So we'll continue to work with you, and if there's other stakeholders that have concerns, I think I'm happy to hear those between now and Monday, but at this point I would encourage folks to be a no on this amendment, and instead potentially consider amendment number 14. Councilmember Lewis.

Thank you so much, Madam Chair.

I, too, want to thank Councilmember Peterson for bringing this amendment forward.

And I will signal that I do intend to vote in favor of this amendment, actually.

I do think that it is equitable to exempt nonprofits from this tax, which I believe should fundamentally be a to incorporate a corporate tax on, with high marginal rates for big businesses.

Indeed, I would also point out that Council Member Stewart's taxing Amazon legislation, including an exemption for nonprofits.

I think that it's just a good thing for us to incorporate into our various payroll tax proposals.

And just wanted to signal that I do intend to vote in favor of this amendment.

Thank you.

I saw Council Member Strauss' hand up next.

Thank you, Budget Chair.

And thank you, Council Member Peterson, for bringing this amendment forward.

I am conflicted about this amendment, and I will likely vote no.

And I want to share my reasons why.

That said, I'm still making up my mind as I hear other people's comments here as we govern in real time.

I've been certified in nonprofit management, and during that certification process, we learned important lessons about nonprofit.

and how to manage nonprofits.

And really, it comes down to the fact that nonprofit is a tax status.

You still operate your business in the same function.

The only difference is that you do not funnel your profits into, you don't funnel your revenue into profits.

Rather, you can still funnel them into salaries, you can still funnel them into programs, you can still funnel them into other ways.

And so it, nonprofits simply being a tax status, it It makes me conflicted about this amendment.

I do share your sentiment that we need to be supporting our nonprofits, and especially the nonprofits that are providing services to our community.

And so you will see in the spending plan that I will be bringing forward an amendment to create eligibility for nonprofits who provide community services, the ability Now, again, that nuance is important because not all nonprofits are providing a benefit to our community.

It is important and difficult to identify how to categorize a nonprofit that is providing a meaningful service to our community as compared to a nonprofit that is simply registered in a tax status form.

I think we have a lot to think about.

I overall want to thank the Councilmember Peterson for bringing this amendment forward and spurring on the discussion.

Thank you, budget chair, for the time.

I texted you, but I don't expect you to be looking at your phone.

But anyway, thank you.

I had a question and maybe you can respond to some of this in regards to some of your amendments.

I will be supporting Council Member Peterson's amendment.

But I, first of all, thank you for answering the six pages of questions that our office sent to your staff.

And you know that one of our questions was the medical for profit and nonprofit.

that that's an essential governmental service or product in this city.

We have provided by 58 hospitals and respective clinics throughout Seattle, including medical services to people of all income levels.

So we wanted to know what the impact would be jumpstart on hospitals or clinics or even a clinic like Planned Parenthood.

So in regards to the University of Washington, which operates Harborview Hospital, They're facing a $500 million shortfall and recently furloughed 5,500 employees as a result of the economic impacts of the pandemic.

And UW must continue to respond to the pandemic and also pursue a large backup of medical cases that were put on hold during the initial months of the pandemic.

So we've learned through Virginia Mason, other hospitals that have contacted us, that they're facing similar challenges.

So I guess some of the question is, Are some of these issues going to be addressed, or how are they going to be addressed in your amendments in light of the layoffs in the medical facilities that are happening regionally?

We know that Overlake Hospital has had to furlough 150 employees.

MultiCare Tacoma had to furlough 6,000 employees.

So the reason why I'm supporting this for the medical nonprofits is I want to know who's left standing to tax when all of this pandemic-fueled recession hits us and who's left where we can actually realize if we are looking at an additional $9.2 million that you think we would lose if they were not exempted.

Correct me if I'm wrong.

So, Madam Chair, can you answer that question for me so I can be clear in my vote?

Yes, thank you, Council Member Juarez and Council Member Peterson as sponsor as well.

You know, feel free to chime in.

I would say that in amendment number 14 that we will consider here in just a moment if the concern is specific to nonprofit medical entities, the language that I propose is trying to specifically get at that nonprofit threshold or that nonprofit sector.

When we have nonprofits as a general category, It opens the conversation to exemptions much broader, and I understand the sentiment that you're raising, Council Member Juarez, and I believe Council Member Peterson spoke to that specific sector as well, but the attempt that I have in Amendment 14, which will be coming soon, is to try to offer a specific, narrow exemption for those non-profit medical entities, and those folks that you talked about, Council Member Juarez, would be would be covered in the amendment that is coming in amendment 14. So that is my answer to your question specific to that sector.

I see Council Member Herbold and Council Member Sawant, but before we move on, Council Member Juarez, does that answer your question?

Yes, it does.

Thank you, Madam Chair.

Okay, thank you.

Sorry about that, and I will continue to try to look for your box to light up and any messages from you.

Council Member Herbold and then Council Member Sawant, and then I'd love to call the question, guys.

Thank you.

I just want to signal my intention to vote no on this amendment, as well as the following two amendments, the exemption for nonprofit health care providers, as well as the exemption for for-profit health care providers that provide a certain percentage of charity care.

The reason why I'm going to vote no is I accept that there are likely to be eligible nonprofits both in the healthcare field and in the non-healthcare field.

and we know that there are payroll eligible for profits that are hospitals that provide charity care.

But the comparison to Council Member Sawant's original bill, I don't think is an apt comparison because that bill included an exemption because the payroll tax was levied across all income jobs.

And this particular bill is very, targeted only on the payroll above $150,000, and I accept that there are individuals working at both nonprofit hospitals, non-healthcare nonprofits, as well as for-profits that provide charity care that earn more than $150,000 a year, but the number of those employees, I believe, is relatively small as compared to the total number of employees under the Council Member Sawant and Morales' original bill.

And so the tax hit, I believe, is likely to be also relatively small because it is only based on those incomes over $150,000 a year.

Thank you.

I would like to clarify once again because it is in the context that something that we had all reiterated together in a previous budget committee that both our movement, Amazon tax bill and the bill that we are considering here today, they are both taxes on big the top executives, the shareholders, not on the workers, regardless of which section of the payroll you target.

And essentially, Council Member Herbold made the point I was going to make, which is that in our original legislation, we had a tax that was levied on the corporation's topmost individual – the owners and the shareholders on the entire payroll.

So it's not an apt comparison, as she said.

councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

Councilmember Silva?

which nonprofits are out there that will be, if they're over 7 million in payroll, they'll have to fill out the paperwork, they'll have to fill this out, and it'll emerge over time that there'll be some nonprofits out there, maybe large arts organizations, for example, like Seattle Opera.

We just don't know who's gonna be brought into this at this point, and I just think it would be better to have a, exemption for all nonprofits, and if we think, well, there aren't that many people who make $150,000 and over $7 million in a nonprofit, then why not pass the exemption?

Thank you.

Thank you, Councilmember Peterson.

And to the extent that that was a request for additional data before Monday, I would add to that.

I think that it would be helpful to know if entities like The National Hockey League, the National Basketball Association are examples of nonprofits that would potentially be exempt from this if this amendment were included.

It sounds like we should go ahead and vote, but I think that that's a worthy conversation to ask those questions and appreciate all the comments that were made.

Again, I appreciate the spirit in which it was introduced specifically to healthcare though, and that's hopefully the conversation we'll have in just a second here.

But at this point, I'd like to call for a vote.

Seeing no other comments, Madam Clerk, will you please call the roll on amendment number eight?

Rouse?

Nay.

Council President Gonzalez?

No.

Herbold?

No.

Juarez?

Yes.

Lewis?

Yes.

Morales?

No.

Peterson.

Yes.

Swant.

Nay.

Scharamuschetta.

No.

Three in favor.

Six opposed.

Okay with a vote of three to six the motion fails and the amendment is not adopted.

With that let's move on to items number 14 and 7. These are items that I think central staff would like to present together, and then we will have the chance to have the sponsors speak to them given the overlapping nature of them.

Dan, thank you very much.

And when you finish your summary, perhaps we could do the effect statement as well if you get the chance.

And you're on mute, Dan.

There, I was having trouble finding the mute button.

No problem.

Just speak up a little bit.

For some reason, it's a little quiet on your end.

Okay, so I'm taking you back to the presentation slide number four.

We have addressed items amendments numbers one, five, and eight in the upper third of your screen.

We are about to get into the amendments that begin to be either ors and the first The first couple that I'm going to address together, as the chair just described, are Council Member Mosqueda's amendment number 14 and Council Member Peterson's amendment number 7. I would bring up the effect statements for each of these, but I think you'll find they are not very descriptive.

So instead, I'm going to do my best to just verbally compare the two, if that would be helpful.

That works just great.

Thank you, Dan.

OK.

So both of these amendments would provide an exemption to the tax for nonprofit health care entities.

And that's what and they are competing versions of how to define what that means.

In Amendment 14, Council Member Mosqueda's proposal, There would be a five-year deduction of payroll that is underneath a $400,000 level.

So those who are remaining to have to pay for the tax would pay only for their employees earning more than $400,000.

The definition of nonprofit healthcare entities who would be eligible for this deduction are those who are involved in primary healthcare and provide more than 50% of their services to Medicaid eligible clients.

Also, non-profit life science research organizations would be eligible for the deduction.

The deduction would last five years.

I'm going to just quickly jump to a high-level overview of Councilmember Peterson's proposal.

Councilmember Peterson's proposal would differ in the timeframe first.

Council Member Mosqueda's number 14 would be a five-year deduction.

Council Member Peterson's would be a two-year exemption.

The exemption would apply both to non-profit healthcare entities, which are defined in a slightly different way, or I shouldn't say slightly, in a different way.

It would also apply to all hospitals, whether they are non-profit or for-profit.

So I'm going to just highlight what the nonprofit healthcare entities category would be covered by the two-year exemption under Council Member Peterson's amendment number seven.

Those are primary medicine providers for whom not 50% as in Council Member Mosqueda's proposal, but 25% in Council Member Peterson's proposal who provide service to those who are either Medicaid eligible or Medicare eligible.

The comparison to Council Member Mosqueda's proposal is the addition of Medicare eligible being part of the 25%, and that percent is also different in the two proposals.

I apologize if that wasn't crystal clear, but that's the flavor of the differences.

very clear.

Thank you very much, Dan.

Appreciate it.

Council Member Peterson, anything to add before we do a conversation?

Thank you, Budget Chair.

So Amendment 7, which would be the two-year exemption for all health care, the rationale there is that during the COVID emergency, it I don't think it makes sense to tax these, to impose this administrative financial burden on these institutions as they're providing healthcare relief, providing, helping people with COVID, et cetera, in the middle of the pandemic.

So I just, that's why the two-year period is there, is that it's presumably during the COVID period.

I also support the intent of Councilor Mosqueda's because it's important for a longer period of time to exempt nonprofits.

There are several nonprofit health care providers that would be exempted for the five-year period under Council Member Mosqueda.

So I'm not quite sure how to reconcile these two.

So I'll defer to the chair for now.

OK.

Thank you, Councilmember Peterson.

I think that Amendment 14 was an attempt to reconcile, and so if you'd still like to move your amendment for a possible vote and consideration, we can do that.

I would suggest that we would do that first if you did want to vote on Amendment 7. Before you consider doing that, I think Councilmember Lewis, did you have a question before we consider a motion to take one or two of these up?

I just wanted to ask some clarifying questions about the overall impact this might have revenue-wise based on the last amendment we considered, the comprehensive total I think I saw in the data set that included all hospital providers.

I wanted to clarify that.

what the revenue impact would be, or is there similarly a little bit of doubt, like there was in the nonprofit one?

I just wanted to throw that back to you.

Yeah, it's a good question.

I would answer it this way.

We know that hospitals are part of the category of nonprofits and hospitals.

We have previously estimated that the nonprofits are likely the larger of the two, and we said $9.2 million for both categories when we were talking about nonprofits only.

I am not able to break the $9.2 million other than to say that's the upper cap of what it logically could be when we're only talking about hospitals and non-profit hospitals as a subset of that.

I see no other technical questions.

Council Member Peterson, I'm happy to go in the order that it is on the slide here.

If that is your preference, it's no problem.

I don't want to drag this out.

At the same time, I do feel that the two could be further reconciled.

I mean, you could theoretically exempt for-profit hospitals for two years during COVID and then the five-year measure for nonprofits would keep going.

But if other folks disagree, maybe it does make sense to then vote on mine first.

Madam Chair, may I chime in?

I apologize for the interruption.

Council Member Juarez.

Go ahead, Council Member Juarez.

Thank you, Madam Chair.

I am struggling because in trying to reconcile your Amendment council madam president our madam chair and councillor Peterson because they both get to what my concern were in that I appreciate You councillor Mosqueda on the five-year duration under 400,000 and exempting at 50% or Medicaid, but you don't include Medicare and And then on Council Member Peterson, I appreciate the two year exception to both nonprofit and profit.

And I'm wondering, I mean, it's a difficult choice because I thought if we combine the two, it'd be a better piece of legislation, a better amendment, I'm sorry, to capture what we're trying to do here.

Because my concern is that we have some for profit hospitals that may not fall under these and are providing services to low-income families that are doing Medicare and Medicaid.

And one entity that comes in mind is the Seattle Indian Health Board.

I don't know what the effect would be.

I know they have employees that make over 150. And again, I think there's some wisdom into what Council Member Peterson is saying about a two-year exemption in the midst of COVID.

If there's some way we can bridge that, otherwise I'm inclined to vote no on your amendment and vote yes on Council Member Peterson's.

Thank you, Council Member Juarez.

I saw Council Member Lewis's hand.

this is sort of a procedural question, because this is my first budget process here on the council.

If we pass this bill today, since this is like a committee of the whole, do we still have to weigh in on it again at full council?

And so would there be an opportunity to maybe reconcile these amendments?

And I'd signal my interest in working with the sponsors of both amendments, because I kind of agree with Council Member Juarez's statements that there's sort of parts from both of them that I like, and I think we could kind of reconcile it and put like sort of a comprehensive response of the COVID amendment forward potentially later in the process.

But anyway, it's a process question.

I don't know if it's for Madam Chair or for Dan, but I'll just throw that out there.

I will note that we are trying to not have essential staff work over the three-day weekend here coming up, but appreciate your creative thinking.

I am thinking at this point we do vote on the amendments that are in front of us, and then if there are council members who are interested in ongoing discussions based on whatever does or doesn't pass today, we could you know, always there's the opportunity for that future conversation, but in terms of, um, an opportunity to vote up or down on the amendments, we could potentially consider that day.

I thought Dan's hand and then council member Sawant.

Um, I was going to answer a council member Lewis's, um, question.

Uh, I think you addressed it, Madam chair.

Uh, basically this would be up for a vote, uh, before the full council.

Um, when, when you next take it up, after it moves out of committee, it goes to full council.

And as you said, that would be an opportunity to further amend whatever it is that comes out of committee.

I think you'll need to pick one of these two, so we're not doing the sausage making on the fly here.

Yeah, I think that's right.

Council Member Swat, did you have anything else that you'd want to add before we consider?

I'm just concerned about the time, so I would really urge all council members to keep that in mind.

Okay.

Council Member Peterson, did you want to work over the next few days on this question and see if there's additional room?

We could pull both amendments at this point and keep working if that's the intent here.

Yes, I think that would be helpful.

Okay.

I am happy to do that as well for the purposes of time here today and also for the purposes of our discussion to keep having this conversation.

It does sound like there's some concern on both ends, so we'll see what we can do, and to try to do that in a very quick fashion for central staff so that the time is not on them over the weekend.

Okay, so at this point, I'm going to pull Amendment 14, and Councilmember Peterson?

Sure.

You're suggesting I'm pulling Amendment 7 as well?

Yeah.

Yes.

Thank you so much.

OK.

Appreciate the discussion, folks.

Dan Eder, let us move into the last section here.

OK.

Sorry, I took it off.

You cannot see the slideshow, is that correct?

Can you now see the slideshow?

Now we can.

OK, great.

So this last section at the bottom of your screen is there are five amendments that have at least a common couple of subjects that are addressed.

Amendments three and four address what is described as a sunset provision, which is to say, when does the tax end?

items 612 and 18 address have different approaches for how to amend what is described as the map maintain a level playing field section.

That section describes the council's intent to monitor other taxes that may be imposed by King County and the state of Washington in the future and to take future actions to end or amend the payroll tax.

These items are marked as being all in conflict with amendment three, Council Member Suant's amendment, because that amendment, unlike what is shown directly on this screen, not only would strike the sunset clause, which would make the tax no longer end after 10 years, which is what's in the base legislation.

If you strike that section, there would be no specific end date to the, to the tax unless and until council takes a future action through a separate ordinance.

But that Amendment 3 also strikes the, entirely strikes the maintain a level playing field provision that Amendments 6, 12, and 18 amend in different ways.

Amendment 3 is also in competition or in conflict, if you will, with Amendment 4 that Councilmember Peterson is sponsoring.

Councilmember Peterson's sunset amendment would change the current 10-year proposal to a four-year sunset so that the tax would cease to be in play after 2024. I think I'll pause here to see if you want to do any procedural steps that might that might allow us to talk only about the sunset provisions and then potentially talk as a separate step only about the maintain a level playing field provisions.

Yes, colleagues, I would like to take up the sunset provision question and then the maintaining a level playing field provision.

Council Members Sawant and Peterson have sunset related items.

Council Member Sawant, you are listed first on the agenda.

Would you like to speak to your amendment and then Council Member Peterson?

Yes, this amendment as was stated before would eliminate the sunset clause.

I think it almost seems strange to be arguing against the Sunset Clause because who in their right mind or in any honesty can believe that given how exacerbated the crisis is for ordinary people and especially marginalized communities that the crisis of housing, not to mention the after effects of the pandemic and the after effects of the joblessness will magically be solved by some arbitrary date.

We have an entrenched inequality in our society and that needs to be addressed.

And that's why to say that a tax on big business, and in fact the first ever citywide tax on big business because we have the nation's most regressive tax system, to say that this type of new tax, it would be historic if you pass this, only needs to be temporary is disingenuous and also just insulting to ordinary people who have been shouldering the burden of funding our society while big businesses like Amazon and other corporations have we have not enjoyed a corporate tax haven for who knows how long.

And so we believe that the only thing that should sunset is the economic inequality and the regressive taxation and the underfunding of our social needs.

Okay.

And I will signal before Councilmember Peterson, you speak.

My intent, if we take this amendment up, would be to do an move that we amend three, amendment three, by maintaining the language in the warehouse section and maintaining the level playing field language so that then we could come back and address the level playing field language.

As you see, there's three amendments related to that.

But that would, in effect, Council Member Sawant, we would just be amending the sunset language that is the item in your bill.

I just want to put that in context.

That would be my suggestion for amendment number three.

Councilmember Peterson, with that in mind, would you like to speak to your amendment very briefly as well so we know the universe of how these proposals compare?

Thank you, Chair Mosqueda.

So the rationale for, I mean, I view the sunset as a renewal, a time to revisit, a time to renew, a time to recalibrate things.

A lot of the tax measures we've talked about earlier today, they have sunsets on them, the property tax levies for the libraries, housing, education, transportation, et cetera, all have dates and they're renewed and revisited.

I think that that's a healthy process to go through that.

I agree there is a crisis now that needs to be addressed.

So four years from now, I think that it can be discussed again.

We can see where we are with I would like to move amendment number three.

Wonderful.

It's been moved.

Amendment number three has been moved to Council Bill 119810. I will second that.

Can I just speak to it quickly?

Yes, please.

In relation to what you proposed as amendment to my amendment, I wanted to suggest, and I'm open to that, and I really hope that the council will support removing of the sunset clause, and so I welcome your support for this.

Just as a suggestion, as an alternative to what you were suggesting, Maybe we could put your amendment, your language for the level playing field as presented in amendment number 12, instead of combine that with my amendment to strike the sunset language and do that as one amendment.

I don't want to make it too complicated, but just that's one idea.

We could do it that way and then have that be amended version of my amendment to be voted on.

For the process of simplicity, I'm looking at Dan just to see his feedback on that.

I think that your comments are in line with my hope, which would be if we eliminate the sunset language, we then take up the maintenance of the level playing field.

But because we have two other council members that have also offered language around maintaining the level playing field, I just want to make sure that we're giving folks the chance to speak to those as well when we get there.

Councilmember Sawant, I think the effect of what I'm going to propose to your amendment would in essence do exactly what you just said if my amendment were to be taken up on maintaining the level playing field.

So at this first step, it would be a two-step process.

This first step would be to just strike the sunset, and that would be the effect of the amendment that I'm suggesting.

Yes.

Okay, so I appreciate where you're going with that and are trying to put two into one, but I think let's go ahead for the process of simplicity.

And council colleagues, I would like to amend amendment number three.

I move to amend amendment three by maintaining the language in the whereas section and in section 5.38.100 to maintain the level playing field.

It's been moved and seconded.

The effect of that would be to maintain the language in Councilmember Sawant's proposal in amendment number three that strikes the sunset section.

As you see in Councilmember Sawant's proposal, the sunset language is section 5.38.120.

Dan, do you mind just putting that section on the screen so folks can see that?

The effect of this is just making this amendment strike the sunset.

Are there any other comments?

Hearing none.

Oh, Council Member Peterson, did you have something?

Well, so yes, Chair.

So we are going to talk about the maintaining the level playing field later because I actually I'm not sure if that's what you're saying.

The amendment that I am making to Council Member Sawant's amendment is to strike this last section.

Please scroll down, Dan.

Would be to just have that section struck, which is 5.38.120, the sunset section.

And just to clarify, it would actually, it's eliminating the sunset clause, just to be.

Thank you.

Yeah, sunset clause, appreciate that.

Any additional comments?

Seeing none, will the clerk please call the roll on the amendment to Amendment 3.

Rouse.

Aye.

Council President Gonzales.

Aye.

Herbold.

Aye.

Juarez.

Yes.

Lewis.

Aye.

Morales.

Aye.

Peterson.

No.

Sawant?

Aye.

Chair Mosqueda?

Aye.

Eight in favor, one opposed.

Thank you, Madam Clerk.

Just for clarification, do we now need to vote on Amendment 3 as amended?

Correct.

Amendment 3, as amended, is before you.

Okay.

Madam Clerk, will you please, oh, Council Member Strauss, comment?

Thank you, Budget Chair Mosqueda.

I am going to be voting against both sunset amendments today because we are not voting for the level playing field amendments first.

And so if we need to come back and have further discussion at a later date or later in this meeting, I'm happy to do so.

The level playing field is the condition for me on whether or not these sunsets provisions are in play.

Just wanted to explain my rationale before I vote.

Thank you.

very, very important.

I am in the same boat in terms of concerns and considered ordering them in that way, but I will be voting yes on amended version, amended amendment number three with the intent to immediately take up the level playing field discussion.

So getting to that in just a moment, but I understand where you're coming from.

Any additional comments?

Okay, hearing none, Madam Clerk, will you please call the roll on amended amendment number three?

Rouse?

Aye.

Council President Gonzalez?

Abstain.

Herbold?

Aye.

Juarez?

No.

Lewis?

Abstain.

Morales.

Aye.

Peterson.

No.

Sawant.

Aye.

Sharon Mosqueda.

Aye.

Madam Clerk, before you call the roll, just want to double check.

I think before the roll is called, we have the opportunity to reconsider votes.

Is there anybody who would like to reconsider their vote to strike the language here that eliminates the sunset, knowing that we will take up the maintaining the level playing field language in just a moment?

OK.

Are you concerned about the impact of the abstentions?

Madam clerk, can you remind us about the rules related to abstentions and their effect on the final roll call?

Okay, so Madam Clerk, thank you so much.

And therefore, the number of council members that voted is seven, is that correct?

Correct.

Okay, great.

Madam Clerk, will you please call the roll?

I mean, not call the roll, tell us what the roll call was.

Totality.