Seattle City Council Select Budget Committee Session I (morning)

Good morning, everyone.

Thank you so much for joining.

This is the Select Budget Committee.

Today is June 17, 2020, and it is 10.05 a.m.

The meeting of the Select Budget Committee will now come to order.

Will the clerk please call the roll?

Peterson?

Here.

Sawant?

Here.

Strauss?

Present.

Lewis?

Present.

Morales?

Here.

Council President Gonzalez?

Here.

Chair Mosqueda?

Here.

Seven present.

Thank you very much.

Council colleagues, we have a long set of meetings in front of us today.

This is the first of two meetings.

We have session one and session two.

Session one begins right now at 10 a.m.

We will start with public comment and then have an overview of progressive revenue proposals.

You'll see from the attached documents, there's a number of attachments, including the previous bills that we've talked about from our council colleagues, Council Member Sawant and Council Member Morales.

We also have the opportunity to hear today from central staff a walkthrough of the proposal that I shared with you yesterday.

which I'm short-terming the Jump Start Seattle proposal.

We do have, this is a discussion item for today and want to thank the council colleagues who have asked for the opportunity to have ample amount of time to talk about proposals and really just have a discussion today.

Thank you to the staff for walking through those various pieces and providing us with a robust understanding.

We will have public comment today and I want to thank all the people who called in.

I know there's a number of people who called in.

We'll try to get through as much as we can.

And then as a reminder, we do have an afternoon session as well.

This will be session two, which starts at 2 p.m.

I understand that public comment for that session opens up at noon.

So if you haven't had the chance to sign up for public comment this afternoon, you're still welcome to do so.

At 2 p.m., our focus is going to be on the budget.

We do know that the mayor's office has not yet submitted their 2020 revised budget.

So today we continue our inquest in the Seattle Police Department's budget and spending.

Today we will have the opportunity to hear from five other cities as well as we look into what opportunities potentially exist at the local level to address the call for action from Black Lives Matter movement and local activists.

So I wanted to provide you with that update that this afternoon will be really a continuation of the conversation that we began last week on the inquest and specifically hearing from elected members across the country.

Again, that's at 2 p.m.

this afternoon.

The portion for this morning's agenda is focused on progressive revenue.

And while it is focused on revenue, we know that people have probably called in to talk about a whole host of things, including the budget and perhaps the Seattle Police Department's budget specifically.

So we will welcome public comment on any of those topics.

At this time, council colleagues, I'd like to see if there is any objection with the agenda in front of us.

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

Are there any objections?

hearing no objections, the agenda is adopted.

Council colleagues, it is 10.08, and I'm going to try to get through as many people as possible who have signed up.

We know that there is a lot of individuals who have signed up for public comment today.

As we continue with our working from home situation, given the current public health pandemic, we want to thank folks for being flexible with us and navigating through the inevitable growing pains that we've all experienced in real time.

We are continuously looking for ways to fine-tune the process and adding new features for additional means of participating in these public council meetings.

It remains of our strong interest to remain committed to having public comment on each agenda, and that includes at the very beginning so people don't have to wait on hold because we know we're already asking you to come early to your computers and log in.

public comment today, again, is being divided into two parts.

For those who are not having the opportunity to speak this morning's session, you will be able to register again at noon for our 2 p.m.

meeting.

Please note, speakers will be provided one opportunity to speak, either at the public session, this one, session number one, or number two, ideally not at both sessions, as this will allow for us to hear from as many people as we can during our allotted time.

I'm going to moderate public comment for this morning in the following manner.

The public comment is going to be up for 20 minutes, and at that time, if there's additional folks, I will consider reauthorizing for additional time.

Folks, you're going to have one minute to speak.

At the end of your one minute, please try to wrap up your comments because the microphone will cut off shortly thereafter.

You will hear a chime at when you have about 10 seconds left.

That will be your indication that it's time to wrap up your comments.

Please do say your name and begin your comments right away.

You will hear you've been unmuted and that will be your prompt to go ahead and start speaking.

Thank you so much for your flexibility as we're really trying to get as many people to comment on these robust items as possible.

When you have completed your public comment, we do ask that you disconnect from the line.

And if you plan to continue following the meeting, please do via Seattle channel on TV or through the other listening options that are identified on the agenda, including live streaming and the opportunity to listen in on the listen in line.

If you do not get a chance to comment publicly and you're not able to get through, please do know that you can email all of us at council at Seattle.gov.

Those items are also listed on our agenda for today.

So we have a lot of folks signed up to testify.

I'm going to queue up people in the order that we've received them.

and greatly appreciate you all for being here and again to our IT and communications folks who are helping from home to make sure that we can get folks signed up.

We have a long list and I appreciate all of your work as well.

Okay, the public comment period is now open.

I will call the first three people and we will let you know that you've been unmuted.

The first three people include Erin Height Gabe Pelley and Alana Perez.

Erin welcome.

Good morning council.

For the record my name is Erin Height representing the thousands of members of SEIU 925 who live and work in the City of Seattle.

I'm here in support of Jump Start Seattle.

As I've testified before accessible child care is critical in our economy and it will be absolutely essential to our economic recovery.

But we were short on child care access before COVID and now it's even worse.

As of June 12th in Seattle, 148 licensed programs have closed, representing a loss of 9,000 slots.

That's a huge percentage of licensed care, and the same story is true across the state.

On top of that, some families have been keeping their kids home from care, leading to a 45% drop in enrollment across facilities in King and Pierce County.

These two economic shocks, plus the fact that childcare is operated on the margins pre-COVID means a lot of these small businesses may never reopen.

That's one reason I'm here speaking in support of Councilmember Mosqueda's Jump Start Seattle legislation.

It includes dedicated recovery money for small child care businesses so they can restart, pay that back rent, get that PPE, start caring for the kiddos again, and get the parents back to work.

Largely, SEIU 925 has supported past efforts to reform our upside-down tax system.

Our members are some of the people paying that 17% of their income.

Thank you, Aaron.

Sorry that you were cut off.

Please do send your remaining comments if you can.

Appreciate you calling in.

Gabe Pelley.

My name is Gabe Pelley.

I'm a resident of District 4, and I support both defunding SPD and Council Member Sawant and Morales' bold proposal for an Amazon tax of $500 million per year indefinitely.

I also want to acknowledge Council Member Mosqueda for introducing your bill, but I ask if you support progressive taxation to address the pandemic and affordable housing crisis, Why not support the former house legislation because these bills are based on fundamentally different strategies so on now it's based approach on a grassroots fighting movement of thousands of working people.

Let's get is basing her as I'm trying to win over the very few wealthy business owners will be taxed.

The big business will always be hostile to taxes and they play nice temporarily and they're doing now faced with the strength of our movement.

But sure as they they will put the when they regain the upper hand.

We saw that firsthand in 2018 when an initial tax of $150 million was cut to $75,000, then $47,000, then repealed, all in an effort to accommodate big business.

But we've introduced the ballot legislation that we've gathered 15,000 signatures for.

Gabe, thank you for your time.

Please do send your remaining comments as well.

Elena Perez, followed by Misha Worshful, Paul Chapman, and Jessica Scalso.

Hi, thank you.

My name is Elena Perez with Puget Sound Stage, and I am calling on behalf of our Coalition South Corps.

We had sent a letter on May 4th in support of progressive revenue, and I just wanted to lift that up.

Our communities have been under threat from wide-scale displacement for many years.

The COVID-19 pandemic has shown the importance of community resilience in the face of a public health and economic crisis.

and our community organizations are on the front lines of keeping people healthy, safe, and secure in their homes.

SouthCore and allies have long advocated for building resiliency through community ownership of housing, cultural, and small business space.

While the city has launched several programs, such as the equitable development initiative, which we are very thankful for, they have not met the need in our communities.

We want to thank Council Member Mosqueda for lifting up progressive revenue and continued leadership from Morales and Council Members Morales and Suan.

We urge you to adopt a new progressive revenue that prioritizes community.

Thank you, Elena.

Misha Werschel, welcome.

Good morning.

My name is Misha Werschel.

I'm the executive director of the Washington State Budget and Policy Center calling in to support the legislation before you.

Our city is facing interlinked crises, as you know, of the public health pandemic, economic crisis and institutional racism.

And this legislation responds to these urgent crises and lays the groundwork for an equitable recovery.

Three reasons that we support this proposal.

First, it boosts our economy by getting millions of dollars circulating in our city as we get people back to work in the phased reopening.

Second, it focuses resources on those most impacted by the crisis, immigrants and refugees, people experiencing homelessness, small business owners and others.

And third, it helps balance our tax code.

Washington State has the most regressive tax code in the nation.

And this proposal, by being paid for by a tax on highly compensated employees at larger companies, helps move us in the direction of a more equitable tax code.

Thank you.

Thank you so much, Misha.

Before we go on, I want to thank Councilmember Juarez, who I understand is with us as well.

Thanks for calling in, Councilmember Juarez.

Our next speaker is Paul Chapman.

Thank you, council members.

It's been just over three weeks since the death of George Floyd sparked a nationwide reckoning of police brutality.

Here in Seattle, we've not received an apology or an acknowledgement from Chief Best and Mayor Durkin for the brutality, police ineptitude, subterfuge, gaslighting, and lies disseminated by the Seattle Police up to and including Chief Best.

We've not heard repentance and reconciliation.

We've heard defiance.

We must hold the perpetrator responsible.

We must defund the Seattle Police.

We must remove Mayor Durkin from office.

There is no reform without defund, no demilitarization without defund, no justice without defund, no repentance and reconciliation without defund.

Now is not a time for Seattle process where we talk a good talk until the right plan, the moral plan, the just plan withers and dies after years of exhaustion.

Last night, the 43rd Democrats voted overwhelmingly to support defunding the Seattle police and to remove Mayor Durkan.

Be bold, do the right thing, defund the police, clean house, be nationwide leaders.

Thank you.

Thank you very much.

Jessica welcome.

Hi my name is Jessica Scalzo.

Thank you for the opportunity.

I live in District 3 and I want to encourage the council to defund the Seattle Police Department by 50 percent and use that money to fund black and brown community led restorative justice programs.

There are already many to choose from such as community passageways and King County equity now.

People are already doing this work and have been doing it for years.

They just need funding.

So we don't have to spend time and money figuring out how to do this.

Um, our budget reflects our city values.

And right now we're saying we value surveillance control, which is often violent and protection of wealthy property owners.

And let's make it about restoration equity and opportunity instead.

If we want to change, then we need to stop funding the systems that are perpetuating these inequalities.

And then also, I support tax Amazon, so we need to get that going as well.

Thank you for the time.

Excellent.

Thank you.

Jason Fields.

My name is Jason Fields and I live in District 5. I unequivocally support the following measures.

Immediately defund the Seattle Police Department by 50%.

drop any proceeding civil or criminal against protest arrestees, and permanently increase taxes on Amazon by $500 million based on the proposed Morales-Amazon tax, no sunset clause.

Amazon must be taxed.

Amazon is profiting during the pandemic and Bezos' personal fortune is increasing while working people are suffering.

A failure to permanently tax Amazon is a vote for economic violence against working people.

Moreover, the recent violence against protesters has shown that the police are out of control.

I personally witnessed excessive use of the force during demonstrations.

It's clear that the police's role is to intimidate the public.

We must increase public safety by defunding the police by 50% and invest in our black and brown communities.

Thank you.

I yield my time.

Thank you so much.

The next three people are going to be S.

Sharshchule.

I'm so sorry.

I mispronounced your name.

Logan Swan and Jorge Baron.

S. Sharshchule.

I'm S. Charusheela.

I speak as a Seattle resident and as an economist.

Although I'm a professor at the University of Washington, I speak here in a personal capacity.

Nothing I say represents the University or any of its units.

We know of a crisis of systemic poverty, homelessness in this city.

We also know that this cannot be solved by growth alone.

This has become clear with 30 years of data in the U.S. and elsewhere.

We also know that the policies we need to address this are going to require long-term comprehensive interconnected policies which need revenue.

So I really urge the city council to consider in a state which has regressive taxation the crucial need to have a tax base that is both large enough and which is long enough without a sunset clause in order to be able to fund these initiatives.

Thank you.

Thank you so much.

Logan Swan.

Hi, my name is Logan Swan.

I'm a rank and file union iron worker, and I'm calling in support of the Swamp Morales legislation that will build 10,000 affordable homes for our community, creating 10,000 jobs for my building trade sisters and brothers, paid for by taxing Amazon and big business, not working families.

I think it's deeply unfortunate that Councilmember Mosqueda has chosen to excuse herself from the many events our tax Amazon movement has held, bringing thousands of working class people together.

Instead of joining our community and discussing what we need and how we can fight for it, Mosqueda has been absent, prioritizing hearing the voices of the same businesses that opposed workers fighting for 15 and a union.

Progressive taxation, taxes on the wealthiest in the city don't need a sunset clause.

The creation of affordable housing and good union jobs don't need a sunset clause.

These are the things that should be a constant in our city instead of what's been a constant, which is taxation that goes disproportionately on the shoulders of working class families.

You still have a few seconds.

Oh, OK.

Thank you.

Thank you, Logan.

Jorge Barron, welcome.

Thank you for the opportunity to address you today.

My name is Jorge Barron.

I'm the executive director of Northwest immigrant rights project.

Our organization provides immigration legal services to low income people throughout the state of Washington, including many Seattle residents.

And I'm speaking today in support of the package proposal that council member Mosqueda announced yesterday, jumpstart Seattle.

We believe that this proposal represents a strong step forward in making sure the city can address the substantial impact of the current public health crisis.

As all of you know, that crisis has had a disproportionate impact on certain communities, including immigrant and refugee communities.

We support the jump-start proposal because it would help ensure the city will have the resources to address the fiscal crisis and continue the city's commitment to support all of its residents, including immigrant community members.

We think this is particularly important given that many immigrant families are excluded from some of the safety net programs that are protecting the rest of the community, like unemployment insurance or the recent stimulus tax payments.

We urge you to support this proposal.

Thank you for your consideration.

Okay, thank you so much.

Appreciate all you're doing right now during this crisis for immigrants and refugees.

The next three people are Sujata Ramani, Richa Dubey, and Brian Kushner.

Sujata, welcome.

Hi, can you hear me?

My name is...

Hello, can you hear me?

Yes, please go ahead.

Hi, my name is Sujata Ramani.

I'm representing the Coalition of Seattle Indian Americans today.

Our community strongly supports and follows the lead of the Black Lives Matter movement.

We also support Councilwoman Chauvin's tax Amazon proposal.

The Reverend Martin Luther King said, quote, you can't talk about solving the economic problem of the black person without talking about billions of dollars.

You're really tampering and getting on dangerous ground We are treading in difficult water because we are saying that something is wrong with capitalism." End quote. If the city council is honest about caring about black lives, it should have the courage to take on the captains of industry like Amazon. Support the tax Amazon bill. Council member Mosqueda's bill raises less than half the amount needed and with sunset clauses displays a total lack of commitment to the black community. Please do not settle for this capitalistic fig leaf coral jumpstart, Seattle. Thank you.

The next person is Racha.

Richa?

Thank you, Council Members.

My name is Richa Dube.

I'm representing the Coalition of Seattle Indian Americans today.

Our community strongly supports and follows the lead of the Black Lives Matter movement.

We also support the Sarwank Morales Tax Amazon proposal.

Today I speak in memory of my father, a retired Indian Army general who spent over 25 years living in a village in India to build a school for disadvantaged first generation school attendees.

He passed a year ago and it's his birthday today.

We say Black Lives Matter.

So let's put our money where our mouth is.

We know that economic disparity, especially now, has a racial bias.

We also know that the tax Amazon bill will raise $500 million per year to fund COVID relief, permanently affordable social housing, and the Green New Deal.

We do not need Mosquera's sunset clause.

We know a company at a $7 million payroll threshold would pay just $91,000 under the Amazon tax.

It does not harm small businesses.

Thank you.

I cede my time.

This person is Brian Kirshner.

My name is Brian Kirshner.

I'm a district 4 resident and executive in a technology company and founder of an organization called Tech for Recovery.

Our mission is to insist on the urgency of taxing tech workers like us.

I applaud the spirit of Jump Start Seattle.

Public investment will both meet immediate needs and accelerate recovery for all.

I urge the council to support this payroll expense tax tied to high-wage workers like me, proposed by Council Member Mosqueda.

I also urge consistent with the sunset provision and a commitment to progressive revenue to treat this as a step in the right direction rather than a final destination.

This crisis will make the tech sector even bigger than it was before.

We won't have equity or tax justice until we have progressive taxes directly on people like me and my colleagues.

I urge my peers who run tech companies to commit their organizations to making this happen.

Thank you for your leadership on this issue, Council Member Mosqueda.

I cede my time.

Thank you, Brian.

The next three people are Karen Turing, Robert Cruz, and Emily MacArthur.

Karen, welcome.

Hello.

Can you hear me?

Yes.

Thanks, Karen.

Go ahead, Karen.

Can you hear us?

Thank you.

Yes, I can hear you now.

My name is Karen Toring.

I'm the general manager of Black & Tan Hall in Seattle District 2. I am calling to support progressive taxation and support community resiliency through ownership.

What I like about Muscata's bill is the fact that it looks out for the Office of Economic Development Initiative, of which Black and Tan is a member of the cohort.

And we've seen that particular fund work, and we want to support that.

If you believe that Black Lives Matter, as other people have said, then this budget is your moral document.

And from what I can see from my own lens, The tax Amazon bill and the jumpstart bill are not in opposition of each other.

I don't see why one, both of them cannot happen.

So I'd like to adopt a both and strategy and support the jumpstart bill and to also lend my voice to defunding the Seattle Police Department.

Thank you.

Thank you so much, Karen.

Looking forward to visiting you there again soon.

Robert Cruz, welcome.

Thank you, Council President.

My name is Robert Cruz, and I live and represent business in CMYS District 5. Pollution, climate change, COVID, and gentrification have marginalized black and brown communities.

Black Lives Matter means to meet centuries of inequity with economic justice.

I want you to commit to generating $500 million to de-denucleate Suat Morales' tax Amazon legislation, and by defunding SPD by at least half, I put it towards programs that support black and brown empowerment instead of black and brown oppression.

You need to fund our communities in a big way, and Councilmember Muscat's jumpstart proposal falls short of this kind of permanent action needed to address the intersections of racism and profit that affect Seattle and the world.

A billionaire class built on systemic inequity should help address systemic inequity permanently.

We need COVID relief, a Green New Deal, jobs, and affordable housing before 2022. We don't have the time to continually delay this actual Amazon web service likely in terms of profit from this very Zoom call.

Defund oppression, tax profiteers, justice for communities on the planet immediately because the future is now.

Black lives matter, and I yield my time.

McArthur.

Emily, welcome.

Hi, I'm a district 2 renter, and I would love to believe in what the speaker right before or previous said, that this could be a guess and strategy.

I would love to see there be $700 million in annual funding for community programs.

Unfortunately, I do think that the jumpstart proposal is meant to be an instead and a distraction, and that's why I'm speaking in favor of the Amazon Taxes Proviso want and Morales, we need $500 million a year.

I think that $200 million is less than half, and less than half cannot cover more programs.

Any working class family can tell you that you can't take less money and make it go further.

Of course, also, I absolutely reject the sunset clause.

We need a sunset on the status quo.

We need a sunset on homelessness.

We need a sunset on systemic inequality and racism.

We do not need a sunset big business tax, big business can pay, and they should invest in our communities now.

Thank you.

Kyra Miko, followed by Mariah Mitchell and Julia Zaglin.

Kyra, are you with us?

Yeah, thank you.

My name is Kyra.

I'm a D3 resident and a volunteer with the Tax Amazon Coalition.

I've spent the last two months collecting signatures for I-131, which is the ballot initiative similar to the Sawant and Morales bill.

And I'm calling to ask Council Member Mosqueda, why are you proposing a different bill that raises less than half the revenue and has a sunset clause, especially when 15,000 Seattle residents have already indicated their support for the taxed Amazon?

In fact, the biggest question people have asked me while I've been gathering signatures is, why aren't we proposing a bigger tax?

And finally, I want to ask Why are you inviting executives from Expedia and other big businesses to come to the table when Seattle clearly denounced how corporations influence our city's politics in last November's election?

I urge the city council to pass a Swanton Morales Amazon tax as a start.

And I also unequivocally support defunding the Seattle police by 50%.

Thank you.

Thank you.

Mariah Mitchell, welcome.

I am here in support of the tax Amazon and also defending the Seattle Police.

A 911 call goes out and the North Precinct responds.

When the North Precinct responds, they go to a door, knock on the door, a pregnant woman opens the door with four small children behind her.

A scuffle ensures there's no body cams, there's no tear gas, there's no rubber bullets, there's no taser, there's nothing.

There's an automatic weapon that loads five to seven bullets into her chest, and luckily none of them went through her pregnant body and hit any of the four children behind her.

The four children behind her are Jazzy, Quan, Zelaya and Zayante, and now they have no mother.

And those two police officers from the North Precinct do not get charged with murder.

They are acquitted of all charges.

For that reason alone, you should defund the police by 100% or hold them accountable for murder.

Thank you very much for that testimony and for continuing to lift up that story and that example of why we are working to defund the police.

Thank you so much.

Julia Zaglin.

Hi, my name is Julia Zaglin.

I'd like you to say her name.

Her name is Charlena Lyles.

I'm your local unemployed bartender, a District 6 resident.

I've been following these budget meetings and I am disappointed.

Why look at other cities when your citizens are crying out for you?

You all look tone deaf.

The budget or jumpstart proposals or all of this is not going to flow any movement outside or clear your inboxes and voicemails.

You are not doing nearly enough.

We want you to defund the police by at least 50 percent.

Stop pretending to fund affordable housing.

Stop gentrifying the CD right now.

Listen to community members and start focused.

Stop focusing on red tape.

Fund anti-gentrification land acquisition now.

Stop predatory landing.

and redistribute at least half of SPD's budget or all of the next deaths by SPD hands will be the blood on yours.

I yield my time.

Council colleagues, we have gone over 20 minutes.

I'm going to extend public comment for another 10 minutes and try and get as many people in as we can.

Is there any objection?

Hearing no objection.

We'll continue with public comment.

The next three people are Deepa Sivaran, Hannah Swaboda, and Kate Simpson.

Deepa, are you with us?

Hi, my name is Deepa Sivaran.

I'm a member of the Seattle LGBTQ Commission and the Parks District Oversight Committee, but today I'm speaking for the Coalition of Seattle Indian Americans.

Please vote for the tax Amazon proposal from Council Members Sawant and Morales.

which will permanently raise at least $500 million per year from big businesses.

This is the minimum amount of money needed to permanently fund affordable housing, services in low-income communities, COVID relief, and the Green New Deal.

A proposal that generates less revenue or include the Sunset Clause is insufficient.

We also support the demands of the King County Equity Now Coalition, including defunding the Seattle Police Department by at least $180 million to invest in the black community.

These sources of funding should also provide for a $500 million anti-gentrification land acquisition fund to help the Black community acquire property in the central area and support Black economic development and the other demands made by the coalition.

If you believe that Black lives matter, put your money where your mouth is and support both King County Equity Now and Tax Amazon.

Thank you.

Thank you.

Hannah, are you with us?

Hi, my name is Hannah and I'm also calling in to voice support for council members who want taxed Amazon legislation.

I think it totally shows the strength of our movement that council member Mosqueda was pressured to bring forward her own proposal with tax business.

But unfortunately, Mosqueda's proposal, which is a deal struck with big business, totally falls short of what we need.

Mosqueda's proposal would raise less than half of the money that the Swat Morales taxed Amazon legislation would raise.

I think it's outrageous that the Mosqueda bill has a sunset clause.

as if after 10 years, our housing and homelessness crisis would simply disappear.

We need to do better than that.

We can't settle for a watered-down big business tax.

Mosqueda, why make deals with big business?

Why don't you instead work with ordinary people who are trying to address our affordable crisis of housing instead?

We need to permanently raise at least $500 million a year and pass the Solana Morales Act Amazon bill.

We also need to defund SBB by at least 50%.

Thank you.

Katie Simpson.

Kate Simpson.

My name is Kate Simpson and I'm a resident of Capitol Hill.

I am calling in support of defunding the SPD by at least 50% and using the money to invest in community and restorative justice.

The police presence in my neighborhood do not make me feel safe and since reclaiming the East Precinct, my area feels much safer.

The East Precinct must be turned over to black and black and brown community leaders so it can actually help Seattle residents.

Furthermore, I demand an independently elected community oversight board with full powers over police, including hiring and firing.

The protesters that have been arrested must also be freed and all charges against them dropped.

I'm also in favor of tax Amazon.

It would help repair racist gentrification by building affordable housing, and it would also provide green jobs.

Thank you.

I yield my time.

Thank you.

Our next speaker is Billy Lee Ballard.

Hello.

Good morning.

Thank you for taking my comment.

I'm Billy Lee Ballard and I live in Queen Anne.

I'm calling about agenda item two the alternative models of public facing.

Disabled individuals make up the majority of those killed in use of force cases by police officers.

We also know that the majority of those killed in use of force cases are Black Indigenous and people of color.

Addressing ableism is key to dismantling systemic racism in an institution that has prematurely terminated lives.

From Eddie Gray, who suffered from lead poisoning, to John Williams, a deaf woodcarver shot by Seattle police in 2010, to individuals to get tipped out of their wheelchairs by police, to those dealing with mental illness.

I ask City Council to please keep people with disabilities, especially black, indigenous, and people of color, front and center when restructuring the Seattle Police Department budget.

Sources are Ruderman Family Foundation Reports, years 2016-2017.

Thank you.

Thank you very much.

Addie Smith, welcome.

Hi.

My name is Addie Smith.

I am a black woman, registered voter, and hate crime survivor.

I am calling to ask the council to vote in support of defunding the police by at least 50 percent, including community responders for non-criminal emergency calls.

As well, this council should support the measure to tax Amazon to address racist gentrification and fund social housing jobs and the Green New Deal.

I'm also demanding that Governor Inslee order an investigation into hate crimes committed against Black women on Mercer Island.

Their voices are being suppressed by Mayor Benson Wong, Mercer Island City Council, and Mercer Island City Attorney, and multimillion-dollar property management and development companies' legacy partners, Attorneys Puckett and Redford, Stoll-Reeds, Bauer-Pittman, Snyder-Husk, Lifetime Legal.

Black women are not safe on Mercer Island.

Black women are not safe in Washington State.

And I yield the remainder of my time.

Thank you very much.

Pedro Espinosa, followed by Daniel Wang, Susan Heath, and Jeffrey Snyder.

Pedro, welcome.

Thank you, Councilmember Mosqueda, and thank you, Councilmembers, for allowing me the time to speak.

My name is Pedro Espinoza.

I am a representative of the Carpenters' Union, and I am calling in full support of Teresa Mosqueda's Revenue Jumpstart Seattle.

I think it's a bill that would really target not only just Amazon, but all corporations that are here profiting on the backs of people.

And also, I'm in support that the bill also allows us to get work for the communities of color, minorities, immigrant people that should be covered, as well as providing jobs that will promote the growth of communities of color and indigenous and immigrant communities.

This, by allowing this to pay prevailing wages on jobs for Seattle housing, I think move.

And I just want to thank the board for allowing me to talk.

Thank you.

Pedro, thank you so much for calling in today.

Daniel Wang.

I am a student in District 4 and a volunteer with the Tax Amazon movement.

In the wake of the COVID-19 recession and plummeting tax revenues, I joined many others in calling to defund the SPD by 50% instead of making up austerity budget cuts to social services.

But frankly, we're going to need a lot more money than just half the police budget.

We needed COVID-19 emergency relief, and we needed to fund affordable housing yesterday.

I'm glad to see that councilmember Mosqueda has also put forward her own jump start Seattle proposal.

As any additional source of progressive revenue is welcome.

Like others have said, I'd love to see both jump start and the Amazon tax passed.

However, I cannot support Mosqueda's proposal if it moves to replace the Morales tax.

It's Sunset Cloud and its very name implies that this is a response to a temporary problem.

But Seattle's housing crisis and absurdly regressive tax structure existed long before COVID-19, and these will continue to plague the people of Seattle long after COVID-19 if a $200 million tax with a sunset clause ends up being the boldest legislation we can pass.

We need a permanent big business tax now.

Thank you.

I yield my time.

Thank you for calling in.

Susan Health.

Hello, my name is Susan Health.

I'm a resident of the 6th District, a retired UW lecturer, a member of Transit Riders Union, and a volunteer on the Tax Amazon campaign.

I 100% support the Salwant Morales proposal, as well as defunding the police.

The Mosqueda proposal is someone called it a capitalistic fig leaf.

It is a cynical, short-term measure that will plug holes in the budget but do nothing to address the horrendous housing emergency that we have.

It will build, what, 91 units of low-income housing.

The original tax Amazon proposal will build more than 10,000 units over the next 10 years.

Completely inadequate.

It's backroom dealings with corporations.

I don't know why the council wants to do this.

The last election showed that the Seattle city voters do not want Amazon corporate tools.

So please fund, please vote for the tax Amazon proposal and defund the police.

Thank you.

Thank you.

Jeffrey Snyder, followed by Laura Lowe, Bernstein, and Barbara Finney, and the last speaker will be Tristan Spears.

I apologize for folks who might have signed up and waited to testify.

We really do have to cut it off at this point, and we will have public testimony again today at 2 p.m.

Jeffrey Snyder, welcome.

Hello, Councilmember Mosqueda.

I'd really like to congratulate you on the breadth of the coalition you've put together to support your new jumpstart Seattle legislation.

However I think it really doesn't go nearly far enough.

Seattle's facing a budget shortfall this year of 210 to 300 million dollars and compromising away 300 million dollars and not even getting corporations like Expedia on board I think indicates that compromise is not the path forward here.

I'd also like to support the demands to fund SPD by 50 percent to reinvest that money in the black community in the Central District and free all those arrested while protesting without charges.

I don't want a year-long process that produces a long list of recommendations that are not followed.

I see you all hoping this is going to blow over and everything will go back to normal, but I don't want normal.

Normal means SPD killing our Black and Indigenous neighbors like Charlene Alliles, Che Taylor, and John T. Williams.

Normal means constant harassment of the homeless for being unable to afford housing.

Normal means a police department that has all but declared war on the citizens of this city.

You have the power of legislation and the power of the budget.

Please stop pretending you need more time or don't have the tools.

Take action now.

Council members from where else you want, you continue to amaze me and inspire me.

Thank you very much.

Thank you Jeffrey.

Laura Lowe welcome.

Hello Council.

I'm calling today on behalf of Share the City the Seattle-based organizing collective.

We support the Jump Start Seattle plan.

We feel this is the absolute bare minimum that needs to be done to support Seattleites during this health and economic crisis.

The tax amendment legislation has not received unanimous enthusiastic support in our group but this plan does.

Anyone opposing the Jump Start Seattle plan is revealing a deep level of disconnect they have toward their economic crisis and people suffering.

It is our understanding that Mayor Durkin won't be able to veto the Jump Start Seattle plan.

The urgency at this moment is directly tied to the fact that we will have a historic eviction crisis in March and with that a sharp rise in homelessness.

We don't have the solutions to meet our current needs due to lack of funding income inequality and restrictive class of zoning.

We want to recognize that this is a start.

It's just a jump start.

It doesn't come anywhere meeting the needs of our crisis.

Also, please stop this week to fund SPD and meet the demands of King County Equity Now.

Thank you.

Laura, thank you so much.

Barbara Finney.

I'm Barbara Finney from G5, a member of AFGE, a delegate to the MLK Labor Council, a member of the 32nd legislative district Democrats calling in support of defund SPV about 50% at least and tax Amazon.

Charlene and Lyles was murdered in your home in front of her children by Seattle police 3 years ago tomorrow, say her name.

The fund SPV by at least 50% now and put that funding into black and brown people's restorative funding.

Last night, 43rd LD Democrats joined the 32nd LD Democrats and King County Democrats in endorsing the Swamp Morales sponsored legislation to tax big business and build massive social housing and also endorsing initiative 131 tax Amazon and Seattle big businesses.

Provide provide COVID-19 relief and build social housing fund Green New Deal massive

Thank you, Barbara.

And our last speaker today is Tristan Spears.

Thank you for the time.

Miss, I would just have to say that the last time I sat next to you, Miss Muscata, I was right there beside you about a year ago, standing up for your sustaining stabilizing Seattle's workers' rights.

Since then, I'm pretty sure that you had your kid and congratulations.

But just to state that what you're doing to my community by trying to put a sunset on what we need right now at this very moment for our sustainability for our future practices to be able to be have right in our community to be heard is like putting the sun cap sunrise on a cap on your child's future as well.

Because that's what you're telling my community by telling us that we don't we don't we don't need what we we don't deserve what we need.

And I had a speech rolling at this point in time but this is just coming from the heart at this point because my grandmother's church in the Central District where my parents are married I'll never be able to go there again because it's gone.

You know, my community does not have nothing in our city, and we demand to have something.

So before I go back to leading my marches, I just want this to be known that Black Lives Matter, Charlene Liles Matters, and we're here, and we're not going to be silenced.

So I hope that you hear my community, and I hope that you remember the passion I have for it and the drive behind it, because we're not going to deal with the sunset.

You can sunset your career later if you think that we're going to take

Okay, Council Colleagues, there's one person that we missed, and I promise to get back to that.

Allison Isinger, number 21 for IT staff.

She is present.

IT, let me know if you are able to get her in, and then I'm just looking at the list here to see if we missed anybody else.

I don't see Allison on the call at the moment.

Okay.

All right, then at this point, council members, thank you so much for your flexibility here.

To all the people who've called in, we really appreciate it.

I think that we are still dealing with the IT system here, and I know we've been getting messages about people who want to testify.

There will be ample opportunity to testify each day at the beginning of the meeting, and we will try to provide as much time as possible so that we can get as many people in and you have our commitment, my commitment, that we're going to have robust public testimony at each meeting at the very beginning.

At this time, I want to thank everybody who dialed in.

Please do send us an email or a call or dial in to testify again, either this afternoon or every Wednesday at 10 a.m.

and 2 p.m.

is when we will have our meetings.

Moving on to items of business, item number one, will the clerk please call the roll?

I mean, will the clerk please read into the record item number one?

Agenda item one, progressive revenue strategies for discussion.

Thank you.

Council colleagues, I want to thank everybody for being with us here today as we have been talking over the last week or so about regenerating our conversation around progressive revenue.

I've had the chance to check in with the sponsors of the proposals that we had heard about a month ago and last week as well in an effort to make sure that we had a robust dialogue about progressive revenue as an entire concept.

We have included both items on our agenda today as background documents.

Today, we will have the opportunity to hear from central staff who have provided us with some briefing materials.

Presenters include Dan Eder, Tom Mikesell, Ali Panucci, and Tracy Ratcliffe.

I want to thank councilmember Sawant and councilmember Morales for putting out their proposal.

was a really helpful foundation for our conversation as well.

During the last legislative session, we also heard a lot of discussion about the need to raise revenue through Representative Macri's bill that was advancing during the legislative session and did not move out of the legislative body.

That said, a lot of really important work was done to look at high-income earners in the largest corporations.

I want to thank Senator Nguyen as well, who had a bill in the Senate that will potentially come back next year.

But the conversation, I think, has underscored that we need to act locally when we see the state not able to necessarily pass revenue right now.

And not just the historic dramatic decrease in funding that we needed for community prior to COVID, but the crisis that is COVID is presenting an even more stark reality.

Fishers in our system are exposing how many people are being left behind in the current economy.

and our need to invest in our community, both small businesses, creating food assistance, creating housing assistance, and making sure that we're providing support for immigrants and refugees who've been left out of federal assistance means we need to act now with urgency.

The state legislature may reconvene a special session soon, but we don't have a lot of we will continue to keep the conversations open for today.

We want to make sure folks have a I'm going to turn it over to our central staff to walk us through some presentations that they have provided for us and looking forward to a robust discussion today from our council colleagues.

Thank you so much.

Dan Eater, Tom Mikesell, Ali Panucci, Tracy Ratzcliff.

I'll turn it over to you.

I believe you have some materials to share with us via Zoom and presentations for the general viewing public.

If you want to take over the presentation and share those screens, that would be welcome.

a council member.

I'm doing that presently.

And Ali Panucci, Tracy Ratsliff and Tom Mikesell will take over the presentation.

Thanks, Dan.

As Dan's getting the PowerPoint set up, I'll just briefly go over what we'll walk through today and then begin the discussion of the proposed spending.

So good morning, council members.

Today, we'll provide an overview of Chair Mosqueda's payroll tax package.

Tracy and I will first go over the proposed spending in 2020 and the spending plan for future years, and then Tom will walk through the proposed payroll expense tax.

Next slide, or excuse me, two slides.

The spending plan will be reflected in 2 separate pieces of legislation.

The first bill authorizes spending in places that provides on funds to guide the use of those funds in 2020. The second piece of legislation establishes a spending plan for the new tax starting in 2021 and establishes a payroll tax oversight committee.

Next site.

The first piece of legislation would authorize spending from the city's emergency and reserve funds in 2020 to provide assistance to low-income individuals, workers, and businesses impacted by the COVID-19 crisis.

This includes $18 million to support businesses and family child care providers, $36 million for housing security and services, $18 million to support immigrant and refugee communities, and $16 million for food security programs.

These next two slides provide more details on each of the areas where spending would be authorized in 2020. For small business support, about 4% or $3.6 million would provide grants to about 30, excuse me, 340 family childcare providers.

That's grants of about $10,000 per childcare provider.

And about 16% of the funds or 14.1 million would provide $10,000 grants to about 1,300 small businesses and would provide about $300,000 to support programs that provide technical assistance and training for small businesses.

This support for businesses is intended to help protect jobs and moderate the impacts of the local tax revenue by supporting the continued operations of small businesses, supporting childcare facilities so workers have access to childcare as they return to work, and support changes and support investments in businesses that need to modify their physical layouts to comply with public health guidance or obtain additional supplies.

The $36 million for investments in housing programs will provide about $19 million for rental assistance programs, such as the United Way of King County's home-based programs and homeless prevention programs.

This could provide three months of rental assistance to about 3,300 households, if you assume average rent of about $1,900 per month.

$11 million would fund shelter de-intensification efforts and support investments in other housing and shelter options.

This could include leasing hotel rooms, expanding or increasing support for tiny home villages and helping shelters modify their business practices.

$1 million would also be provided for foreclosure prevention programs.

This could support programs that provide mortgage counseling services and provide direct mortgage assistance of about $30,000 per household to up to 35 households.

And then $5 million would be provided to support the ongoing service and operation costs for affordable housing providers and shelter providers who have seen their costs increase as they modify their provision of services to reflect public health guidance.

About $1 million would be used to support programs that provide language access to support immigrant refugee communities who need help accessing and understanding federal, state, and local assistance programs.

And about $17 million would provide direct financial assistance to Seattle's low-income immigrant and refugee workers and households who have experienced the economic impacts caused by the COVID-19 crisis.

This could be used to provide $1,000 per household in direct financial assistance to about 16,000 immigrant and refugee workers and households.

This funding is intended to prioritize support for workers and households who are ineligible for other federal or state emergency assistance or may receive such assistance but it's limited or the delay may not be meeting their current needs.

And for those who have had their own families impacted by the COVID-19 crisis and help them address the health care needs.

$14 million would be used to expand the emergency grocery voucher program that the city launched early in the COVID-19 crisis.

This funding could expand or extend that program to provide two months of grocery vouchers to about 16,000 households, assuming a per month voucher of $400.

So moving on next to the second piece of legislation that outlines the intended spending in 2021 and then in 2022 and beyond, I'll first describe what is planned for 2021. In 2021, the revenue estimate from the new payroll tax is about $174 million.

Tom will describe that in more detail later in the presentation.

The bill first outlined the intended use of that estimated revenue for 2021. So it would first spend about half of the estimated revenue or $86 million to replenish the emergency and reserve funds that were used to support the investments in 2020 to address the COVID-19 crisis.

Of the remaining half, 75% would be used to provide continuity of services and programs administered for programs and services administered or supported by the city that prior to the COVID-19 crisis, that absent the support from this new payroll tax would see a reduction in funding.

This could include, for example, if short-term rental revenues continue to come in below what was anticipated, funding to support the ongoing service and operation costs for our permanent supportive housing developments, and funding to support the city's equitable development initiative.

In addition, if general fund revenues continue to decrease, funding for a wide variety of programs and services that the council has in previous budgets ensured there is funding for AC reductions or be eliminated if revenues continue to decline.

So this funding could support the ongoing investments in those programs.

And then 20% would be used to support some of the programs funded in 2020 to address the ongoing economic impacts of COVID-19.

and 5% would be provided for the departments and community-based organizations to administer these programs.

The council will authorize the specific spending plan for these funds as part of the annual budget adoption process this slide, excuse me, this fall.

And with that, I will turn it over to Tracy who will walk through the proposal for 2022 and beyond.

Thank you, Allie.

So I'm moving to slide seven and the proposed spending plan for 2022 and beyond.

As you can see, 65% of the revenue would be used for the construction or acquisition of affordable housing for serving households with incomes between zero and 50% of area median income.

It would also cover ongoing operating and services costs for housing serving households from zero to 30% of AMI.

And then finally, it could also cover the associated costs, infrastructure costs, such as energy efficiency upgrades and appliances and so forth that might go along with the construction of new rental projects.

This funding will be prioritized for housing that serves households from 0 to 30% of a my 10% of the revenue will support equitable development initiative projects including the housing and non housing components of such projects.

20% of the revenue will support local businesses and tourism to spur the local economic recovery and to provide workforce stability.

And then finally 5% of the revenue will support startup and administrative costs.

An implementation plan developed by the Executive in cooperation with the Council will include more specifics on the spending for 2022 and beyond.

The legislation directs the Executive to submit this plan to the Council no later than January or June 30, 2021. A racial equity analysis is to be completed by the Executive with support from the Office of Civil Rights on the plan before it is submitted to the Council.

The legislation does establish a new nine-member payroll tax oversight committee that will be appointed by the council and the mayor.

As you can see, the committee will include representatives from city staff, labor, business, community organizations, and communities that will benefit from the proposed spending.

The committee will provide oversight on the services and programs supported by the payroll tax and the impacts of this tax on the number of jobs and businesses in the city.

and other data that directly relates to measuring the impact of this tax on the city's economy.

The committee will provide an annual report to the council and the mayor.

Allie and I would be happy to answer any questions that you might have about the spending ordinances.

Thank you so much, council colleagues.

I would love to hear your thoughts and feedback.

I know that's a lot of information.

I'm trying to scroll through because it's a little challenge to see everybody with the shared screen.

So give me one second here.

There we go.

Now I can see all of you.

I want to also offer that the spend plan has been sort of dissected into a narrative document that I have attempted to draft and share with you.

We will share that more publicly when we get a chance to make sure that all the typos are fixed.

I think it's important for us to make sure that we get the message out.

In an effort to try to provide a story or a narrative to how these dollars could get out the door, you do have a draft that I sent you this morning and we will be happy to share that with members of the media and the public as soon as we make sure to get those typos out of there.

One of the things I would note is, you know, we did have I think a call to action.

We've had a call to action to support people, both immigrants and refugees who've been left out of federal assistance, recognizing that our food assistance program wasn't going far enough, a recognition that the housing assistance and the voucher assistance that both the city and the county was trying to get out the door was nowhere near meeting the need that we had, and recognizing for small businesses that the support that the feds have been offering through PPP first was not equitably being distributed.

We know that nine out of 10 small businesses who are black owned were denied access to PPP for the loans $20,000 and less because of the institutionalized racism that continues to perpetuate in our lending system.

There is a huge need from the smallest businesses who are brick and mortar, who've had to close their doors and board their windows in the time of COVID as they waited to open their doors.

They haven't been able to generate profit.

They have been in a situation where their employees are not able to work from home.

And we did reach out to businesses and ask, what does this system look like in a post COVID world to get a better sense of where we could draw the line?

This does build on some really good work that had been done both at the state and at the city level.

And it applies an analysis of saying, you know, where do those dollars go in a post-COVID world?

What we heard was people need flexible dollars.

There's not enough flexible dollars from the feds because the PPP dollars for local businesses require people to bring their staff back at full capacity when those small businesses can't even open restaurants at full capacity.

Restaurant owners and small businesses have said that they need flexible dollars to hire people, but they also need to, you know, renovate their small establishments and put in safety protections by cleaning equipment, put in plexiglass, what have you.

And then lastly, we heard overwhelmingly, and I think this is a shared priority among the council, as schools are closed, they themselves as business owners or the employees that want to go back to work in a safe way, there is no place for their kiddos to go with schools closed and summer programs closed.

So really working with SEIU 925 to try to figure out a childcare assistance program specifically for small business workers.

So that is a little bit of a context on why there is such a long list of folks who are supporting this from the business community, because I think it was important to ask, what do the small businesses need?

I think that they all want just progressive revenue.

And in conversations with Councilmember Sawant and Councilmember Morales, I think I've continued to identify the three pillars that really unite us.

One is hundreds of millions of dollars in progressive revenue.

Two is making sure the assessment is truly progressive, that we can assess those who are doing well in a post-COVID world and being realistic about the dollar amount that we bring in and, you know, investing in those who've been left behind.

And three, making sure it was actionable, making sure that there was dollars that we could book right now to make sure that there was assistance that could get out the door.

I'm hopeful that those three pillars that I think unite us all on council and especially among the sponsors of the legislation continue to get lifted up because I do think that there's a lot of commonality in why a progressive revenue proposal is being put forward from folks here and the urgency to make sure that something happens.

So with that, I want to thank folks from central staff specifically for providing this level of detail for us.

we have a lot of questions on the agenda.

Please do know that there is more detail behind each of these slides including in the narrative document that I sent you and even more behind that in the Excel document.

Let's get to some questions on the spend plan before we get to the tax side.

Yes, Councilmember Lewis.

My first one would be as to the services spend, particularly as to the child care, food access and rent subsidy.

Am I correct that all of that would be new and additional spending to meet the increased demand that we're seeing due to COVID.

That's not to sort of plug existing services, but rather to expand because we know that those are currently being stretched to their capacity.

Is that a correct read of that?

Council Member Lewis, yes, that is a correct read.

In most cases, these are either new or expanding existing sort of programs that provide assistance to food programs and that sort of thing.

I would say the one place where it may be sort of supporting existing services is in the one light item that provides service and operation costs to nonprofit affordable housing and shelter providers.

That may in fact be supporting the city has already funded, but would actually support their increased costs that they've incurred because of COVID-19.

So it is new, unanticipated spending from when the council adopted the budget last fall, but it's sort of existing services.

Yeah.

Thank you.

And on the homelessness prevention programs and rental assistance, the 19 million that is there, do we have any indication on the number of increased placements that could possibly lead to beyond what we currently have now, be it hotel rooms, be it tiny house villages, but additional placements in the short term that can help provide safe places to get folks off the streets, get them inside, and have them be in a place where they can socially distance.

Sure.

Um, so it's a little difficult to provide a really like concrete number because it will depend on specifically like a hotel room is really different than a tiny home and that sort of thing.

If, if all of the $11 million was used, for example, to create tiny homes, it could a new tiny home villages.

It could support potentially about four to six or five to seven, um, new, new villages with about 40 tiny homes per, um, per village, but that's a, you know, that's a rough estimate and the specific dollars really depend on the context.

So it could provide support for a variety of services.

So it's hard to say it will provide housing or shelter options to X number of individuals.

Right.

But based on the estimate you just gave, would it, would it be accurate to say we're talking about like hundreds of new units potentially?

Yeah, if you assumed four new villages, to be conservative as I would prefer, of 40 tiny homes each, yeah, that map is a couple hundred potentially.

But it may also support, if shelter providers have been using hotel rooms, for example, to address shelter de-intensification efforts, it may in fact be providing ongoing funding for people who are currently living in hotel rooms.

So it might help both expand the number of rooms, for lack of a better word, available to people experiencing homelessness and or help address not having to displace those people in two months because funding has run out.

So moving to the next question I have here, the $1 million in mortgage counseling and foreclosure prevention that's penciled in here at $1 million, what does that look like programmatically?

That's certainly something I've been hearing a lot of concern from constituents about.

But it seems like I haven't really known as a council member what the levers are for us to get more involved in that.

So I'm just curious what You know how that would be implemented.

We are a mortgage counseling and foreclosure prevention program.

We actually started with the 2016 levy.

We actually didn't see very much use until, as you might imagine, in the last few months.

So we actually have a program that exists with program guidelines and we kind of modeled the number of potential households we could serve based on that model.

This one, that model might be tweaked a little bit because what we're hearing is that the folks may actually be able to negotiate with their lenders a modified mortgage amount.

What they really need is the people who can help them do those negotiations.

So we might be looking at putting a little more money into actual counseling services.

versus what this could also fund is the actual loans that folks might need, mortgage assistance, temporary mortgage payments that they might need.

That will all get sorted out in the coming months in terms of what that program structure might actually look like.

But those are a couple of things that we've heard about how that money could be used, not dissimilar to the program that we have currently.

Yeah, Tracy, I'd appreciate maybe if we could arrange a time to go more in depth into that, because that sounds really interesting, especially the kind of programmatic expansions you just kind of foreshadowed.

So I'd like to certainly learn more about that offline.

And then this last question that I have, and then I can turn it back over, Madam Chair, about the 86 million in the reserves.

Is it a correct understanding that An advantage that the jumpstart plan would have over, say, like another balancing strategy would be that instead of spending down the reserves and then having to replenish it later through, I mean, I would imagine over time through the general fund, but that's another thing that you could correct me on, that that money being immediately replenished through This jumpstart program would help to safeguard that fund in case we should have cause for, you know, 2020 is not over yet.

If we should have cause to respond to another emergency or revenue stabilization situation, would that be an advantage over a balancing strategy?

where instead we would spend that account down with the assumption that over the next decade we would replenish it through general fund appropriations.

Someone want to take that on?

I'll give it a shot and Dan or Tom may want to weigh in more.

I think that in a general sense, yes, I think having a planned for new revenue source to immediately replenish the funds just provides a little bit more security to the city if there is other emergencies and or you know, it's quite possible that these economic impacts will persist and the revenue shortfalls will persist into 2021 and beyond.

And so it may be that next year the council decides that you're going to replenish half of it and you're going to need to continue to provide some emergency assistance.

But yes, having, I think, a new revenue source to replenish those funds versus assuming that revenues will increase over the years and we will slowly rebuild those funds is, you know, it provides more certainty.

So in the event that our spending, the spending plan came in under, right?

Like if we, if Jumpstart raised less money, there's sort of less risk from this approach because we're sort of already intending to spend down our rainy day accounts to meet the current needs.

So like we wouldn't be putting other potential funds at risk because we would just be doing what we'd be doing anyway, kind of replenishing those funds through the general fund.

Like, is that one way to understand it?

Or am I making it too complicated?

I don't know if I totally understand the question.

If revenues come in less than the estimate bill, I mean, it's sort of similar to what we're about to undertake when the mayor transmits the rebalancing package.

Appropriation decisions would have to be modified, where you're authorizing spending would have to be modified to reflect that.

And council would have the choice of potentially reducing how much you are putting back into those emergency and rainy day funds versus direct spending in 2021. And it looks like maybe Dan has something to add here.

Yeah, the only other thought that I'd layer in is that this amounts to a plan that doesn't itself the city's budget.

In order to effectuate the funding or refunding of the emergency reserves, that decision would be made more specifically in the fall budget process when the Council has additional information about the needs of the city as a whole.

This is a plan that would certainly inform and would be used as a guide for those future decisions, but the decision itself isn't being made in this legislation so much as an announcement that this is what the council currently thinks its decision will be when the budget is, the fall budget season comes.

Yeah, and maybe to put a finer point on that, as an example, you know, The plan says that about $65 million would be spent to support the ongoing programs and services that might otherwise see a cut because of reduced revenues.

If during the fall budget process, the council finds that there's a much bigger gap in order to maintain programs that are essential and a priority for council members, you might decide to provide a little bit more, you know, 80% of the money for continuity of services and put, you know, $75,000 back in the emergency fund.

So there'll be some balancing, but you will actually authorize the spending during the fall budget process.

Thank you, Councilmember Lewis, and we're happy to circle back to Councilmember Herbold and then Councilmember Sawant.

Councilmember Herbold.

Thank you.

So I have.

I think we have a few questions across a couple of different slides.

I think staying on this slide for now is good for my questions.

It looks like since we are using the revenue stabilization fund and the emergency sub fund, we will not need to do an I'm not sure if that's correct, but we are taking, loaning ourselves funds from the various voter approved levies, the housing levy, the parks levy, the transportation levy, that had been originally considered, which allows, as I understand it, if that is in its rebalancing package to use some of those funds, as we've heard from the budget director, Dr. Ben Noble, that they intended to do, they intended to use some revenue associated with those levies for the rebalancing package.

So as I understand this proposal, we're not dipping into those dollars, so that allows the executive to use them in the rebalancing package.

And then my second point, so I want that understanding confirmed.

And then my second point around that particular issue, I have some others as well.

I'm wondering if you could talk a little bit about how this relates specifically to the number of dollars that this proposal uses from the rainy day fund and the revenue stabilization account.

It looks like we're using 67 million, oh, no, it looks like we're leaving a balance of 67 million and 61 I'm just trying to get a sense of whether or not leaving 67 million and 61 million I think it is important to note that the need for a rebalancing package, respectfully in those two accounts, allows them to propose a rebalancing package along the lines they were considering.

I also want to flag that I have heard from director noble several times that he does not want to deplete those funds in 2020 because he wants

walk through those questions, but just jump in if I'm missing something.

So I think as a starting point.

There's about $67 million in the emergency fund and about 60-ish million in the revenue stabilization fund.

That is based on Director Noble's presentation in April, the current state of things.

So this proposal would spend down the bulk of the emergency fund and a portion of the revenue stabilization fund.

So it zeroes them out as opposed to, I'm sorry, thank you for that clarification.

I was thinking that after this proposal, this is the balance that's left over.

This proposal zeroes those funds out.

I want to live in that world that you just described.

But yes, this proposal, this proposal.

would, wouldn't zero out both funds.

It would essentially zero out the emergency fund and would spend about $20 million from the revenue stabilization fund.

And I'll just note that the draft legislation that was attached to this agenda, we are still working out the details of exactly which appropriation comes out of which fund, but it is about, it is essentially spending what we understand to be the balance in the emergency fund and about 20 million of the, approximately $60 million balance in the Revenue Stabilization Fund.

However, the legislation preserves options for the council to consider where to get this $86 million.

It can be from the Emergency Fund, it can be from the Revenue Stabilization Fund, and it can be from the General Fund, including some of the other dollars that the city may receive to support the COVID response.

We had hoped to benefit from having the mayor's proposed rebalancing package to understand what the best mix is, but absent having that information solidified.

This puts out a proposal based on what we understand to be those balances.

Director noble also mentioned a unanticipated general fund balance from 2019 of about 18 and a half million dollars I believe we are assuming that will be on an obvious piece of the rebalancing efforts but until we see it.

It's difficult to say exactly what the right split is but there will be some choices.

for the council to make based on what the mayor proposes, both to rebalance and continue to pay for services and programs that were funded in the adopted budget, as well as COVID response.

And so we'll work with the sponsor and also the budget chair to fine tune it, but the way the legislation is drafted, it preserves some options.

Thank you.

So I just want to flag that the more we spend of those two emergency funds in 2020, the more quickly, as I understand it from my conversations with Director Noble, the more quickly we may need to consider city staff layoffs and furloughs.

I think the intent of the budget we have to do is to preserve the ability to maintain city jobs in 2021. If we could move on to slide four.

I have a question about the direct financial assistance to that was focused on providing direct assistance to businesses in the prohibition of public gift of funds, the current business stabilization program, COVID-19 business stabilization program and the one before that, the pilot that was focused on short-term impacts to businesses associated with unanticipated events, structures that program so that it only can help people who basically, as business owners, I'm wondering if you could speak as it relates on slide under this proposal to provide direct assistance to businesses, both small businesses, childcare, and nonprofits.

And then the, yeah, I think that's the only question I have on that slide.

And then I have one more question on another slide.

Okay, if I could take liberty to just first respond to one of your last points related to the use of the emergency funds and whether or not that might impact city employment layoffs and furloughs.

At least my understanding of the intent here is to use those funds that are available now, but to replenish them immediately in 2021 to preserve use of those funds to ensure, like to minimize the impacts on city employment.

And again, that's the 75% for 2021, correct?

Well, there are 75. So there's about $174 million for 2021. The revenue estimate is about $174 million.

So half would go back, like would put the emergency funds back, and then half would be continuity of services.

So the combination of those things would allow would allow the city to continue to have access to those funds to try to minimize impacts on city employment.

And again, my understanding of Council Member Musqueda's intent here is to take a, when we see the mayor's rebalancing package, to take a look at what the, they're proposing to use in terms of the emergency funds and balance that with this proposal and other proposed funding for COVID relief.

I don't think it is accurate to say that by using these funds now that necessarily means increased city layoffs or furloughs because it is trying to keep that money available for spending in 2021 in a variety of ways.

So I just wanted to be.

Fantastic.

Thank you.

Yeah.

Yeah.

Perfect.

Okay.

And then in terms of your questions about providing assistance to small businesses, that's always been a challenging area with the state's gift of public funds restrictions and those types of things.

So yes, my understanding for the For the current business stabilization fund, that criteria was developed based on restrictions around CDBG, but also to try to get the money to the businesses who need it most.

So this legislation defines a small business similarly as a business having five or fewer employees.

There has been interpretation or issued by the state the AG's office that sort of provides some additional thinking around gift of public funds and supporting businesses in this moment in this crisis.

And so it will be important that the program is supporting businesses that either the business owner is low income and or the assistance will help address the economic impacts that the city is facing.

And so it is a benefit to the public if this assistance helps maintain jobs and maintains our tax base so that we can continue to provide all of the other programs and services.

So I'll distribute that memo to council members.

Thank you, I look forward to it.

And then my last question going to slide seven relates to, and I apologize, you may have already covered this, but I definitely missed it.

Can you talk about whether or not there are targets built into the affordable housing number, affordable housing investments, for instance, numbers of units that would become available to households at the targeted AMI levels?

Councilmember Silva?

The pool of money will be subject of the implementation plan that we're going to ask the executive to develop along with community, along with the council, to make some of those determinations about the types of programs, the types of targeting that might happen, what income level best be served.

and what kind of mix from PSH to just straight affordable housing to acquisition versus new construction.

So some of those decisions will be made as part of that development of that implementation plan that we will get in June of 2021. Thank you.

Quick addition to that answer, and then for folks who want to speak, please raise your hand like this because I can't figure out the hand raising function on Zoom right now.

councilmember Sawant next so if you want to speak just raise your hand.

Just a small addition to what Tracy said and perhaps a slight clarification.

I would like numbers but I think it's really hard for us to put numbers on specific units if we don't have a sense of how much is going into permanent supportive housing versus other types of units and I think Tracy, I see you nodding if that's correct.

What I would like us to do, though, is to say with the universe of dollars that we have, for example, in 2022, we could do a dissection to say within this universe of dollars, if we were to do X amount to permanent supportive housing, X amount to zero to 30% housing, we could give a scenario or we can maybe give a few scenarios for how those dollars could be used if they were coupled with additional dollars to maybe do the operation and maintenance side.

Tracy, do you want to work with us as we think about that.

He would be happy to do that kind of scenario development.

We would just need to get direction from you as the sponsor as to kind of what numbers you'd want to attach to the PSH only units, the number to the zero to 50 and so forth.

So we would be happy to do a couple of different scenarios to kind of show what the potential unit production might be.

with those different scenarios.

Happy to do that.

We've got the cost estimates that we can plug into an Excel spreadsheet to create those for you.

And I will just note, I believe that one of the attachments to the agenda that was put out by your office, Council Member Mosqueda, provides a rough estimate of per-unit costs.

So if people want to just do some division, that the per-unit cost assumptions are included in that document, and that's what we would inform modeling some scenarios for you.

Do you mind, Allie, if you have that document pulled up just to reference those costs?

Or Tracy, you probably have them memorized as well.

But they were in that one pager that turned into a three pager that I sent you all on Tuesday.

If you do have that, just to do a quick math for Council Member Herbold and myself as a reminder, that would be helpful.

Yeah, and I do think that we should include some of those scenarios while deferring to a future implementation plan as part of this package.

I think that would be very useful for folks in the community who typically want to know what our plan is.

So, thank you.

I don't have that table in front of me.

Tracy, do you?

Okay, great.

So based on the information, the most recent information we have from the office of housing, which is based on their phone Nova.

we ballparked the total cost per unit at about $320,000.

That is the total development cost.

What the city pays or contributes to those units depends on whether it's a permanent supportive housing project versus just your kind of zero to 50% of AMI units.

So what you will see in the narrative document is you'll see for permanent supportive housing, we actually presume that because we have the levy and other sources, levy being a primary source, that will tap out the typical leverage that we use on permanent supportive housing, that when it comes to the city's contribution towards those units, we presume it will be the entire $320,000.

We have taken a slightly more positive vent on the units that would serve up to 50% of AMIA, still the total development cost being $320,000, but we think we may actually be able to tap some of the 4% tax credit to leverage the city's dollars and bring the city's contribution towards those units down to about $170,000 per unit.

On the operating and services side for the permanent supportive housing, I think you all know, we've talked about this a lot, the cost per unit for those permanent supportive housing units is about $20,000 a year per unit.

So that would be the calculation that we would use for the operating and services dollars for the permanent supportive housing units.

Are you saying that there that no other funding is available for permanent supportive housing other than housing levy dollars?

Well, not after you assume that our housing levy dollars will will, in fact, basically take all of the 9% tax credits that are available.

We actually are doing that already.

We we get a capped limit of 9% tax credits are the most beneficial tax credit.

We have to share it with the county.

And so we have a negotiation that we have to do every year about who's going to get how much of the 9% tax credit and we have been tapped out every year on the 9% tax credit because there is a limited amount that we have to share with the county.

There's a whole reason that we do combine nofas is because there are other.

There are county funds and state funds and federal funds available beyond the tax credits for housing development.

A typical housing development is a blend of fund sources from multiple jurisdictions.

You are absolutely correct, Councilmember.

There's the capital side of the equation, which there are, in fact, some limited dollars that come from the state through the Housing Trust Fund, and we get some of those.

Again, those are competitive dollars.

The county really doesn't actually have a lot of capital dollars that they contribute.

Mostly what they contribute, which is not to minimize the contribution, is on the services side.

And so, but those dollars are limited as well.

So it's just a recognition that the pie of those other leveraging sources is not growing and won't grow as we exponentially increase our amounts of dollars to put into the production of these units.

Unless we can successfully get the federal government and the state government to give us some more resources.

That is just the reality.

We've talked, I think, a number of times about that when we have talked about these expanded resources that we might bring to the table, that it doesn't necessarily expand the resources from our other leveraging partners.

It is the reality for right now.

We can hope that that might change, but it is a reality we have to deal with.

Thank you, Tracy.

You're very welcome.

Thank you, central staff.

And thank you also for maybe doing an addendum for us, a one pager on all of the information you just shared.

I know we included it in our small document that we sent around, but having that scenario or a series of scenarios would be very helpful to break away from the alphabet soup that sometimes we swim in when we talk about housing, affordable housing development.

Council Member Sawant, I saw your hand go up.

And again, I want to thank you for I want to make sure that folks know that all of these conversations are in the spirit of advancing progressive revenue, hundreds of millions of dollars.

I appreciate your past work and your ongoing work, as Tracy just said, for us as a city to expand the resources that we as a city can bring to the table.

Thank you.

I appreciate all the conversations we've had as well and the discussions.

And also appreciate that you have said repeatedly that you agree with me in the goal of raising hundreds of millions of dollars of progressive revenues, basically by taxing big business and the wealthy to fund affordable housing.

And so I welcome this conversation and I also I want to thank the thousands of ordinary people, community members who have been fighting for the Amazon tax, not just this year.

I mean, this year the fight has ramped up in the wake of the tremendous historic election results that we had last year where Amazon and other corporations, the Chamber of Commerce, were pushed back, but also hundreds who have been fighting since 2018. And we don't want to repeat the disastrous scenario we had in 2018, where the majority of the council ended up betraying ordinary people and repealing the Amazon tax, which was actually much lower than what we're talking now.

I think that is the kind of spirit we need where we absolutely hold the line against big business trying to put the burden of this recession on ordinary people.

I echo Tristan Spears who spoke in public comment that we have to do by our communities what we would do by our own families.

And I think that if that's not the bottom line, if that's not the guiding spirit, then I don't know what can be in any honest way.

So in that spirit, I welcome this conversation.

And I wanted to again thank the thousands who have been fighting this year because look at the conversation we're having.

It is completely on a different magnitude of revenues than the one that got repealed in 2018. That shows the pressure on big business.

This proposal that's come forward also in itself shows the pressure on big business.

Obviously, I'm fighting for I want to make some general points later as well, but on the questions for central staff, some discussion has happened already, but I just wanted to hone in on that.

about $174 million, that is what we know, not the promise, but what actually is, which is about 35% of what Councilmember Morales and I have proposed in our tax Amazon legislation.

which would bring $500 million every year.

I just wanted to, you know, as a representative of people who are struggling for housing, I just wanted to point out that is a big difference.

And given the scope of the housing affordability crisis, I just don't understand why we should accept this much lower number other than the fact that that is the only thing that big business is willing to give in.

But I will I think it's my duty to echo the people who spoke in public testimony that there's an entire movement fighting for much larger.

So I think we have to focus on that.

Why not that much larger amount of funds?

And then related to that is the question about how much housing, how many affordable homes would be able to build in the Amazon tax that we have proposed versus the proposal that we're discussing today.

Obviously, as Ali and Tracy said, it's not a straightforward thing.

We have to pick a scenario of what kind of homes, like what income quintile we are directing it towards, and then decide how many homes to each quintile.

and then decide how many homes would be built overall.

So obviously, we have to pick a scenario.

So I really agree that we need to do that.

I don't think it's good enough for council members to say, well, we don't know because we don't know which homes in which category.

Well, pick a category, pick a scenario, and do it.

I mean, in fact, what we did through our office is we go right off the bat what we asked We had Ali and Ali was extreme or she did tremendous work on this, you know, pick a sort of work up different scenarios, you know, assuming a wide distribution of housing across the spectrum of income.

distribution, make some certain assumptions, and come up with some numbers.

So by those scenarios, we have an estimate that our tax of a $500 million Amazon tax would build roughly 10,000 affordable homes in a 10-year period, which is huge.

I mean, that's something that will actually start putting a dent in the massive affordability crisis.

It's, you know, roughly 1,000 homes a year.

So I wonder, I mean, this is very simple.

This should not be complicated.

Just make an apples-to-apples comparison.

Use the same assumptions and then see what the difference is.

I look forward to that.

I totally understand if staff cannot have that today, but that's something that the public will need to review.

So I hope and I'm sure council members will agree with me that it will be a necessary exercise, mathematical exercise for us to go through when we're comparing these two proposals to see how much we are losing if we don't have a $500 million tax.

And so I would urge us mathematically speaking, please make the same assumptions across both the proposals and let's find out how many homes we can build per year.

As I said, we have an estimate of 10,000 homes in the 10-year period.

I would also point out that, just two other points I wanted to point out for the interest of the public is, one is that when we talk about how much affordable housing we would get out of one proposal versus the other, Obviously, the points I just made are important, which is how much we'll get each year with the two different amounts.

One is much less than the 500. But there's another component to how much housing will be built, which is also whether the tax will be permanent or will it have a sunset clause.

And I really agree with the people who said in public comment that we don't want a sunset clause on progressive revenues.

We want a sunset clause on regressive revenues, which implies we want the tax on big business to be permanent.

But that's not just a talking point, it's in reality what consequences people go through and how much we can make a dent in racist gentrification in our city is going to be determined by how many dollars we put on the tables.

Like the black community has been saying, you pay the fee for the harm you have caused us, and the fee comes in terms of dollars on the table.

And if we take away the dollars on the table, which are lower to begin with than the movement is fighting for, and then we say, on top of that, we're going to take away those dollars after 10 years, that means real consequences for how much housing will be built after that 10-year period.

I mean, we're proposing a permanent tax of $500 million.

That would mean that much, you know, roughly 1,000 homes every year, not just for the first 10 years.

So I wanted to include that as well.

And just to, I mean, it's an obvious point, but I still need to address that, which is that there's no question in my mind, I strongly support every single one of the programs that will be funded through the proposal from Council Member Skeda.

Absolutely, you know, I have a six-year track record of having supported all progressive causes.

But ultimately, it's a question of arithmetic.

And I don't think working people, I mean, I think working people understand arithmetic.

And if you have a $500 million tax versus a tax that is roughly 35% of that tax, which is less than half, then obviously what you get out of it is also less than half.

So as good as all the programs are, it's going to be much less than what we would get with more money.

I mean, that's simple.

It's a simple thing.

I don't know if that is a good thing.

I think, I mean, the political logic of the Sunset Clause has been that we have to have a regional approach.

I strongly support a regional approach, but that regional approach hasn't happened because whether you talk about citywide taxes or regional taxes or state taxes, we're coming up against the same barriers, which is that big business and the wealthy don't want us to have progressive revenues because they will be taxed at any level.

I want the city Council to actually put its mark and say we are fighting for the maximum possible here today.

We are not going to put a trust in a regional approach which has not worked.

I would be dishonest to the people I represent if I saw illusions in a regional approach when I have seen it failing over and over again.

After the repeal in 2018, we saw the one table, so-called one table, that was going to be the grand regional solution.

Nothing came out of it.

The Macri bill did not pass earlier this year, not because it was not a good tax.

Yeah, we support that tax.

The reason it did not pass was because big business wanted a ban on Seattle taxes on big business, and they refused to support the statewide bill without that ban.

And ordinary people and the tax Amazon movement pushed back against the idea of a ban, and we successfully defeated the attempt at such a ban.

But that is why big business withdrew its support or refused to support the Macri bill, and then that did not pass.

So I think it's a question of just being honest with people and seeing what works and what doesn't work.

I don't think that works, not because it's regional versus citywide.

It doesn't work because putting your faith in big business doesn't work.

I think that's the difference here.

I have other questions, but I'll stop here so other council members can speak as well.

But I just wanted to say that let's make sure that at the next meeting we have sort of a comparison of housing.

Thank you.

Thank you.

I don't mean to speak over because I want to remind folks that when we speak over each other in Zoom, it's really hard for folks to hear.

I know, Allie, you were about to say something.

I want to note that we have Council Member Morales as well in the queue.

And then we really need to get to the revenue generating bill, the tax bill too.

I will also say, you know, I pushed really hard to get the number of units created.

And because of the complexities that Tracy and Ali outlined, we were, you know, informed that it would be hard to do that without having those additional dollars to complement operation and maintenance.

But I think it is a fair question that Council Member Swan has asked for a side-by-side.

And I think if we just look at the number of units, so if we just assume number of units we can do that slice.

And I think it would be quick before we turn over to Council Member Morales, as a reminder for folks, if we do want to get into this comparison, which I think there's value in the conversation, in the spirit of pushing forward a progressive revenue as a body, to understand the AMI levels that we're talking about in both bills too.

Could you please speak to that real quick?

Thank you, Councilmember Swan and Councilmember Mosqueda.

I did just want to, I don't, I don't have those numbers.

We can do some modeling, but I did, I wanted to set some expectations.

And one is the, it's not an, it will be difficult to do.

We can, we can compare numbers, but it will never be a pure apples to apples comparison because the proposal from Councilmember Mosqueda would provide housing serving households up to zero to 50%, between zero and 50% of AMI.

I would like to make a motion to approve the proposal.

and require some additional green building and those sorts of things.

So there are some different assumptions that apply based on the proposals as they currently stand.

So we will do our best to highlight those differences and provide some ability to compare.

But I will just note that focusing on housing serving particularly people at or below 30% of area median income, It requires a different investment in housing and services.

And so we will, um, that those housing and service costs are built into council member Swann and council member Morales's proposal.

So if we, we took out the service dollars, the number of units estimated in their plan would increase in the same with yours.

So just want to set expectations.

We'll do our best to compare and show where the assumptions are different or the same in, in either bill.

I think that that's great.

Thank you so much for working that magic.

I'm going to turn over to Council Member Morales.

Thank you, Madam Chair.

Good morning, everybody.

Just to respond quickly to the last point, we haven't got to the amendments that I have proposed on our own bill, but one of them is to change that allocation to serving households or production for 60% or lower.

that is already close to being crafted for the purposes of the comparison.

I'll just offer that to try to shrink your workload a little bit.

I do want to just address the broader issue here about having the two different proposals and thank Council Member Mosqueda for having some conversations with us over the last couple of months.

you know, I think I appreciate that this proposal spells out some of the COVID relief ideas that we had talked about and gives an example of what those, you know, provides a model for what that could look like.

Um, I also have a real, um, issue with this sun setting.

I think we have, um, we have huge needs in the city.

Um, I don't anticipate, you know, we've been waiting a long time for the state legislature to address our regressive tax system.

And I really don't anticipate that anything is going to change.

Um, so I, I think that that's a conversation that we should definitely, um, continue and really, uh, kind of.

dig in to what that means and why it is important for us to not cede that ground, at least not from the beginning of this conversation.

I want to turn to the equitable development initiative.

Again, I had an amendment drafted for our proposal that would set aside 10% of any revenue generated for the Equitable Development Initiative.

In our proposal, which seeks to raise $500 million, that would be $50 million for EDI.

This is really about community-led development that is key to addressing racial equity.

And we heard from some South Core members earlier this morning.

South Core, for those who don't know, stands for South Communities Organizing for Racial Equity.

It's a race and social equity task force that has been advocating for building resiliency through community ownership of housing, of land, of small business space.

And the coalition itself is made up of about 24 organizations by and for people of color.

20 of those organizations are in my district.

And so this is a group of folks I've been working with for a long time.

They were instrumental in crafting, advocating for, and passing what created the Equitable Development Initiative.

These are really important projects, you know, community-led projects that often need five to six million dollars to get site control, to get acquisition of property.

You know, one of the questions I have on the way this is described right now anyway is that it is for for housing and non-housing projects, but these organizations that are applying for this money also need sometimes, you know, a couple hundred dollars a year over a period of time to build their own capacity to be able to drive the projects that they want to see.

And so, you know, that's why it's really hard to hear about how the initiative, the staff work plan has changed during COVID.

I just want to, I did ask the director of OPCD how their work plan was gonna change as a result of COVID.

And so some of the things that he responded, they're delaying projects so they can free up staff.

They're exploring ways to mitigate anticipated revenue shortfalls by reducing or eliminating work.

They are trying to support organizations, but this is a serious problem for the communities, the kind of community projects that this initiative was intended to serve.

So that's why I drafted the amendment calling for 10% of any revenue to be dedicated to EDI because I want to make sure that this community led development isn't jeopardized.

We have to do everything we can to avoid disaster gentrification and especially right now.

the need for this is permanent.

We have to center black and brown voices as we're talking about how to allocate existing resources or backfill or allocate new resources.

So whether we're talking about what happens to funding when we defund the police, or we're talking about new progressive revenue, or we're talking about rebalancing, We have to make sure that we continue and really ramp up our investment in black and brown communities and in community-led development.

So I appreciate Council Member Mosqueda including or adding EDI funding to her proposal.

Obviously, I would prefer to see more revenue generated so that we can increase funding in those projects.

But at any rate, I think, you know, as we have this conversation over the next few weeks, it's really, um, important incumbent upon us to commit to these investments.

Uh, because I think we can all agree, especially after the conversations we've been having in the last few weeks that we, we owe our black neighbors at least 400 years worth of investment.

And so it's time for us to start, uh, moving in that direction.

Thank you.

Thank you, Councilmember Morales, and thank you for all of your work as well on your legislation.

I would love for us to talk about the revenue bill, and I think that as we do, I want to just transition with the notes that you left us with, Councilmember Morales, and remind folks that not only have Black, Brown, and Indigenous communities been left behind in our current economic situation, prior to COVID, but because of COVID, we also know that communities of color, black, brown, and indigenous folks are being hit at higher rates of hospitalizations and with higher rates of death due to COVID.

And especially as we think about minority owned businesses trying to open back up, the triple whammy of the existing crisis being inequitable, or I'm sorry, the existing economy being inequitable, COVID hitting communities of color hardest, and that our communities of color are being left behind in the relief packages I appreciate you lifting that up so we can center ourselves on that as we think about this conversation going forward.

With that, let's go ahead and transition to the conversation over the revenue generating bill.

And I believe Dan and Tom are going to walk us through this.

Allie and Tracy, thank you for all of your work with walking us through that outline.

And as folks have already noted, just the beginning of a robust conversation here.

Tom and Dan, thank you for all of your work on this tax bill.

Walk us through the slides.

Tom, or Dan, let me just check your audio real quick.

This is Dan Eater.

I'm going to turn this straight over to Tom for him to walk you through his slides.

Thank you, guys.

Good morning, Madam Chair.

Can you hear me?

Terrific.

Good morning, members of the Select Budget Committee.

I'm Tom Maestel with the Council's General Staff.

And this morning, I am going to review the payroll expense tax, provide a detailed overview.

I'm going to do a number of slides.

I think we are going to run into that same situation we had with you a month ago or so.

I apologize.

And this, I think, is a good reminder for why we need universal broadband as a public utility available to everyone.

So everyone has high speed internet access.

I know Tom is on his way to call in right now so that we can have better audio.

We did have this situation in the past, so if you'll bear with us for one second while we get Tom on the audio.

IT folks should be trying to get him loaded up there.

What we'll do is we'll have Tom walk us through the presentation.

While we see what he says, he will probably be on mute on his computer, and he will speak into the phone, if that's correct.

So let's see if we have...

folks from IT letting him in, that would be great.

Dan, is there any...

Wonderful.

Put yourself on mute on your computer, please.

Perfect.

Okay, we're ready to go when you are, and you can put yourself, if you're comfortable holding your hand like that, we can hear you great, and we will walk through the slides with you.

Okay, this will be great.

So the next few slides that we'll cover this morning We'll discuss the annual revenue amount from the proposed tax.

We'll talk about the threshold that determines the eligibility for different business situations.

I'll touch, refresh the concept of signed payroll and how that matters for the application of this payroll tax.

Also go into the rate structure as the tax has a At a different tier level based on type of business as well as the side of the police station cover the exemption of that are included in the bill.

Go turn to the the date the tax becomes effective due date for the initial collections and then finally wrap up with a discussion of the sunset provisions in the bill.

From a high level, the annual revenue amount that staff estimated for this tax structure is approximately $174 million per year.

As I mentioned at the front end, and we'll go into more detail in the next few slides, there are two different sides of business considerations that are included.

There is a $7 million to $1 billion, and then a $1 billion and higher business side.

The data that staff used for the estimate was provided by the State Employment Security Department.

It's for 2019 data inflated using CBO's wage and salary disbursement regional forecast.

The data that was requested and was provided by ESD described the different payroll tiers for the different size of compensation level.

However, it did not provide sufficient detail or any detail for that matter for describing businesses above a billion dollars in size.

So for that, in that case, the staff estimate does not include any estimate for the data for incremental tax, higher incremental taxes for businesses of a billion dollars or higher.

So turning to the tax threshold, and this actually the prior slide, if we look at when the tax becomes effective for different business situations, it's essentially at a starting threshold of $7 million of Seattle payroll or higher.

And I'll discuss what Seattle payroll means in the next slide.

That amount is indexed to inflation beginning in 2022. Okay, next slide, please.

When determining the payroll, there is essentially a three-part test that is used by tax administration staff.

One is whether or not the employee primarily works in the City of Seattle.

In those instances, the full amount of the payroll is part of the tax base and part of testing against the $7 million threshold.

If that's not the case, if the employee works in multiple locations, the test is whether or not it's 50% or more.

So if the employee works 50% or more in Seattle, then the entire amount of the payroll would be assigned to Seattle for determining whether or not the payroll is part of the threshold test or not.

And then finally, the third test is in the event where The employee does not work 50% or more of their time in any one location, but the employee resides in the Seattle, and that third case, that payroll for that employee would be included in the tax base.

Next slide, please.

Okay, so with regards to the rate structure, this describes the different rates that are applied in the bill.

There are four individual rates that are determined by the size of the business payroll as well as the size of the individual employee compensations that are included.

And now I'll touch a little bit more on the application of this in individual cases in the next slide.

But in general terms, for a business that is from $7 million to $1 billion in payroll, total payroll for the year, the tax would be 0.7% on the entire employee compensation for all employees earning from $150,000 to $499,999.

So essentially, in this case, there is no tax on any employee compensation in any of these tiers that is below $150,000.

The next tier, beginning with $500,000 and above, the tax for the business from $7 million to $1 billion would be 1.4% of the total employee compensation for those employees at those compensation levels.

Beginning at $1 billion, of total business payroll size.

The tax would be 1.4% of the total employee compensation for any employees earning from $150,000 to $499,000, and then a 2.1% tax on the total employee compensation for those employees earning $500,000 and above.

And so this is just by way of providing an example.

So this would be an example company with a total of $10 million annual payroll and just a few different individual cases to just demonstrate how the tax would apply in some kind of edge case circumstances around the margins.

So first with regards to Paycheck A, this would be an individual who earns $149,000 per year.

There would be zero tax as the tax kicks in, starting with a compensation of $150,000 per year.

Paycheck B would be an individual earning $151,000 per year at this $10 million size payroll company.

So in this case, the tax would be 0.7% times the total $151,000 for a tax of $1,057.

Third example, Paycheck C would be an employee at this company receiving compensation of $499,000.

In this case, the tax would be, again, 0.7% times that total $499,000 for a tax payment of $3,493.

And then finally, Paycheck D, this would be an individual paycheck of $501,000.

which would put that paycheck within the next year of this tax, of this $7 million to $1 billion sized company payroll bracket, which would be 1.4% times the entire $501,000 for a tax bill of around $7,000.

With regards, besides the initial $7 million cutoff and $150,000 of payroll cutoff, there are additional exemptions for all employment situations, all paycheck sizes and business sizes.

These include grocery stores and entities for which the city does not have the authority to tax, including federal, state, and local governments and the subsidiaries, insurance businesses, businesses that sell, manufacture, or distribute motor fuel, and businesses that sell or distribute liquor.

Just to underscore that point, it wasn't a policy decision to exclude those folks.

That's a category of people that we do not have the authority to tax.

I underscored what Tom had already said.

Next, with regards to the effective and due dates, as drafted, the tax would go into effect on January 1st of 2021. The first payment from any taxpayer with liability would be with the final quarterly payment of 2021, which is in effect February of 2022. And then accounting accruals would bring the tax receipts forward into 2021 fiscal year to meet spending obligations.

And now I'll wrap up discussing the sunset provision.

As has been described previously in today's meeting, This bill has, this tax has a 10-year horizon, and it expires on December 31st of 2030. There's also a codified provision in the bill that is a statement of legislative intent to monitor the tax proposals at overlapping jurisdictions, for example, the state and the county, for any progressive revenue plans that are in the works or that are passed.

that would overlap with this proposal and with the intent to explore amendments to this proposal if those circumstances arise.

And I believe that is my final slide, and I'd be happy to answer any questions.

Tom and Dan, thank you both so much for all of your work on this legislation.

Tom, thanks for being flexible with us as we adapt to getting central staff testimony and overview by phone.

I'm looking at my council colleagues here.

Please raise your hand if you do have a question.

Councilmember Lewis first, anybody else?

Okay, Councilmember Lewis.

Thank you, Madam Chair.

So Tom, just to have a couple of quick questions, and it actually pertains to that last thing that you mentioned around the possible early sunset if there was some kind of state regional tax that came on the scene.

Is that, would that essentially require us to come back and trigger another discussion where we decide to repeal it or would that happen automatically?

If that's the case, what level of regional tax would be suitable to essentially remove this tax?

But would it have to sort of set similar rates and be a formula that would lead to a similar level of revenue?

Thinking in terms of the spending plan that we discussed earlier, I wouldn't want us to be in a position where there's a new regional tax, but that doesn't factor in the commitments that we've already made to the public and to the services that we wanted to provide.

So how would that process work?

Councilmember Lewis, thanks for the question.

As currently drafted, the codified provision would express the intent for any progressive tax discussion at a regional or at an overlapping jurisdiction, so state or county.

And then it would not mandate, but this expresses the intent of the council to, as you say, engage in those discussions.

given that occurrence of a progressive tax proposal that's in discussion somewhere else.

So it's not mandatory.

It's a statement of legislative intent.

So to put a fine point on it then, there wouldn't be an automatic repeal.

It would just sort of express that while we are interested in a regional solution and while we continue to wait for a regional solution, We just can't wait any longer, given the scope and scale of our need.

But if that regional tax materialized, we're totally willing to talk about it and revisit how this is structured.

But it would require us to bring it back to propose some kind of additional measure and to pass it.

Correct.

There is no automatic course of action.

It's just an attempt, as you described.

that.

Thank you.

Councilmember Lewis, any other questions from you?

Not currently.

Thank you, Madam Chair.

The next person I have in the queue is Councilmember Herbold.

Thank you.

So let's see.

So first for slide 11 around eligibility, could you let me

Councilmember Herbold, thank you for the question.

A nonprofit that is in excess of the initial $7 million business size would be subject to the tax to the extent that that nonprofit has individual paychecks that are above $150,000 per year.

Thank you.

And then another question as it relates to that eligibility.

I just want to confirm my understanding that businesses that meet the threshold for the tax year based on payroll, that businesses meet the tax threshold for the year each year based on payroll expense in the previous year.

So businesses in 2021 would meet the threshold for tax based on their payroll expense in 2020, is that correct?

That is correct.

Always looking back to the prior year.

And similarly, since I believe that this tax structure also creates eligibility for 2020, businesses in 2020 would meet thresholds on tax base in their payroll expense in 2019. Is that correct?

The tax goes into effect on January 1st of 2021, so there would be no 2020 tax liability.

So the first test would be determining eligibility for the tax in 2021, looking back at 2020.

So this different structure addresses the concern I had raised last week about the Suant Morales proposal that would make, that would start charging in 2020, even though it wasn't going to be collected in 2021 based on 2020. revenues in my concern that 2019 revenues would not be necessarily illustrative on the health of a business or the revenues collected by a business in 2020.

Correct me if I'm wrong, but I think I have it right that the measure of the tax is different than the eligibility threshold in terms of which year.

And I'm talking specifically about eligibility threshold.

Thank you.

Very good.

So to kind of pivot back to the question, yes, to the extent that the proposal we were discussing last week was establishing a tax effective in 2020, it was looking back at 2019, this is establishing a tax starting in 2021, so it's looking back to 2020.

Thank you.

And then my last set of questions relate to slide 13. Just wondering whether or not you have first estimates of numbers of business that might meet each threshold, payroll of $7 million or $1 billion.

And if you have the estimates of the number or spread of salaries over the threshold amounts of $150 million.

the revenue estimate of $173,000,000 in 2021 is based on.

could imagine between because a business that participates at the $150,000 to $499,000 payroll level who has employees who are within that bracket and in not all circumstances will have employees at the $500,000 and higher.

So based on a rough view of the numbers and the businesses that were in the $150,000, so at least $150,000 and higher.

It was approximately 2.7% of the total accounts that were included in the Employment Security Department data, which is on the order of 722 businesses.

And again, that is, there may be a case where there is a business who has individuals as an employee that shows in the 500,000 plus bracket, and then employees in the 150,000 lower bracket, that wouldn't be picked up in that number, but it's likely few, if any.

With regards to the estimates of the different payroll bases, so the 2021 estimate, so this is using the ESD starting point, and inflating it using CBO's wage and salary growth estimates from their pessimistic forecast.

Numbers support approximately $14.3 billion in the $150,000 to $499,000 tier of compensation and $5.2 billion in the $500,000 plus tier of employee compensation.

As I led with on the first slide, this is only describing the information that was available freely from the Department of Employment Security, and it does not attempt to describe any estimates above the $1 billion payroll tier for the incremental.

I would say that the base revenue estimates include the entire amount of revenue

$7 million per year would be paying to the extent that they have employees earning over $150,000 at the .7 and 1.4% tax rates.

What is not included and what may be the way of additional revenue if the data was available is the The amount that would be generated from a business that is a billion dollars or higher that has employees over $150,000 of annual compensation for the additional point 7% rate that are in both pay compensation here.

Thank you.

And I just want to close out with a statement about a couple different things.

One, as it relates to the sunset, Council Member Lewis talked about the legislative intent about whether or not the state might fix our broken tax code and make it more progressive.

That is legislative intent of something that might happen in, hopefully, in very near term.

There is a sunset clause in the bill for 10 years from now.

I don't believe in 10 years a city council will determine that we don't need progressive revenue anymore if the state were to act, so I think this is potentially a useful tool to incentivize the state to act and to incentivize a cleaner, non-patchwork type tax code.

So I am not terribly disturbed by the sunset.

If the state fails to act over the next 10 years to correct our upside down tax code, the city council would very likely act to block the tax code because we will still have the same challenges that we have now and we will have funding for a lot of really important programs that help our communities baked into our budget.

I would like to make one other point.

One other point I would like to make is although as it relates to specifically the proposal that Councilmember Sawant and Morales made, I have expressed my concerns that that proposal makes in 2019. With this particular model, I would be less concerned about this tax kicking in in 2020 based on 2019 eligibility because the situation I've been concerned about with the the model proposed by Councilmembers Sawant and Morales is that in this very uncertain business climate, you know, for instance, a business of 200 employees all making minimum wage would meet that threshold.

And that particular business in 2020 may not be doing as well as they were doing in 2019. Since this particular model is really focused and zeroes in on higher salaries, from my perspective, if you as a business still have a significant number of employees that are making these higher salaries, in 2020, I am less concerned about having the requirement kick in in 2020 based on 2019 payroll amounts.

So I'm just sort of throwing that out there to test the waters because that might be one way of growing the size of the revenue generated by this tax.

Thank you very much, Councilmember Herbold.

I have two folks in the queue.

First, Councilmember Morales, and then I saw Councilmember Sawant.

If there's anybody else, please ping me.

Can I just double check before we go on, Dan and Tom?

We're talking about assessing 2021 payroll, correct?

So in 2022, the payments start, but we're looking at 2021. Is that correct?

That's correct.

Okay, thank you.

So I think Councilmember Herbold, your point is well taken.

To the extent that there are companies over that payroll threshold and they have salaries that are six figures, you know, including half a billion dollars in payroll, in a time where we're post-COVID in a recession in 2021, I think your point is well taken.

Thank you very much.

Thank you.

I think it is a start and the needs are great and this is not going to address all of them.

I think that this more of a scalpel approach is better, again, given the uncertainty of so many businesses in our community, balanced with the uncertainty of people's lives who need these services.

And really, this is, I think, a much more, I mean, I really believe in the ideals of a progressive tax structure, and I think this is much more focused and progressive than the other version, a model that I have myself been supportive of in the past.

And I just really want to indicate my support for your legislation.

I would love to have any council members who would like to sign on.

I want to recognize that we are very early in the conversation.

Councilmember Morales, Council President Gonzalez are the three folks that we have lined up and Councilmember Peterson.

I'll turn it over to Councilmember Morales.

Thank you so much.

I really just have a clarification, sorry, a question of clarification.

As we're talking about the issue of It's listed in the bill as maintaining a level playing field and the sunset.

I'm reading this as two separate things that we would sunset if another jurisdiction passes progressive revenue.

And what that means is to be determined.

And if not, we would sunset in 10 years.

Um, can I just get some clarification that those two things are not tied together either or, uh, whichever comes first, I guess, would trigger the sunset.

Anyone?

That's correct.

They are separate.

So it is not the case that, um, that, uh, they would have to be tied together.

I was losing the thread there, and I forget which council member was asking the question, but either one of those would trigger the sunset.

And in the first case, if another jurisdiction passed progressive revenue, then the council would have to act.

And in the second case, if the 10 years expired, it would just expire.

You've got that correct, Council Member.

Okay, thank you.

Can I add one more piece?

Because I want to make sure it's basically the intent for the future councils to consider whether or not they would want to take something up.

So they wouldn't have to, Council Member Morales, if something were to pass at the state level, they wouldn't have to.

But I think your point is very well taken, the way that it's written is about intent.

Well, and I just, you know, I wonder because it doesn't designate, you know, what is considered significant.

I guess my interest, I'll just say, my interest would be in if we're going to keep a sunset, that it only be if some other jurisdiction passed significant revenue.

that would meet or exceed what we are trying to capture here.

So I know that, you know, I guess that's what I'm really getting at is that if we're going to keep that, keep a sunset, it shouldn't be in 10 years.

It should only be if this revenue is able to get generated in some other way.

Thank you, Council Member Morales.

Any additional questions from you?

Okay.

I think that's all I have to say.

Thank you.

Thank you very much.

It looks like Tom is trying to call back in.

For the IT folks, I want to make sure we have Tom on the line as well.

Councilmember Sawant and Council President Gonzalez and Peterson.

Thank you.

for the members of the public who are watching and people who are fighting for the Amazon tax who are watching.

The bill that's under consideration right now doesn't take effect until January 2021, so it charges no tax for 2020. So we have to note that in the middle of a pandemic recession, that is hundreds of millions of dollars of lost revenue.

And I think the bill, just a side point, but an important one is that it pays off the loans by spending almost nothing in 2021, whereas in the Amazon tax bill, we have the full 2021 revenue because the loans are paid off by the eventually collected 2020 taxes.

I want to focus on is the hundreds of millions of dollars of revenue that will be lost by not charging taxes for 2020. I really object to the way Councilmember Herbold has characterized the process of tax collection.

It is all very slight of hand.

There was one misleading remark.

bogeyman of how the poor businesses that are struggling, how will they pay taxes if they have, you know, if they have struggled or so on.

Let's be very clear.

If a company has gone belly up, they're not going to pay taxes.

But it is a question, it's a recursive question because the way everybody pays taxes is you pay taxes this year on the income you had made last year.

That is the same for corporations, that is the same for households.

So for all the tears that are being spilled for the largest businesses, let's keep in mind we're talking about the largest, at least as far as the Amazon tax is concerned, the largest 2% of businesses that we're talking about.

They are the business owners who are, many of them, billionaires, multimillionaires.

This is not a tax on workers, and I want to come to that in a second because, again, there are very misleading points that are being made.

Whether intentionally or not, that's a different question.

I'm not even going there.

But just as a matter of accuracy, we need to keep that in mind.

But the sleight of hand is in sort of this pretense that somehow this taxation, sort of the recursive taxation approach, is somehow unique to business and not to people.

No, that's the simple mechanism of tax payment.

You pay taxes this year.

on the income you made last year.

So I just find it sort of outrageous that this impression is being given that somehow there's something unique for businesses.

And if you're so concerned about businesses that are going to be struggling in the recession, what about working people?

45 million American workers have said that they have lost their jobs and they're filing for unemployment insurance.

This is a crisis that is, in some aspects, going to be worse than the Great Depression.

And any household, again, any household that lost a job this year, it has to pay taxes on the income that they had last year.

So unless you're pretending that the mechanism is different for households versus businesses, this point has absolutely no merit whatsoever.

And furthermore, as One of the people in public comment stated, the tax obligation of such a large corporation with $7 million of payroll is so minimal compared to the tax obligations that ordinary people have.

And then look at the compounded situation that they're facing with or having the most regressive tax system on top of that having major difficulties in their lives because of the pandemic recession.

And so I don't agree with Council Member Herbold.

You know, the health of businesses, what about the 2019 health of ordinary people?

They're still going to be paying taxes.

I mean, the tax date has just been deferred.

but they still have to pay taxes.

Unless the federal government says no taxes owed for all working class households, which they certainly should do, that is still an obligation that workers are going to have to have and nobody's coming and saving them.

Nobody's telling them you don't need to pay taxes because we're going to write a legislation that takes care of you.

I've never heard any politician spend this much time talking about ordinary people's tax obligations, especially, you know, we are all elected officials in a city with the nation's most regressive tax system.

So where is the balance of your commentary?

How much commentary on poor big businesses and how little on what actual working people are going to face?

And then the thing that was absolutely misleading is this idea that businesses that lost, that under the Amazon tax framework, businesses that lost income this year will be charged under our bill.

That's not accurate at all.

That's misleading.

I wanted to move to another point, and I wonder if Tom can pull up the slide that says paycheck slide where there's paycheck A, B, C, and so on.

It's not so much that I have questions on that slide.

I just want that slide that the public can see because I'm trying to make a point about how this slide has been made, and I also wanted to I would like to assure central staff that this is not a comment directed at central staff or their work, but just the approach that's being used here by the city council members who are advocating for this, which is that this type of where you are attaching the tax obligations to the salaries of particular employees, that's very misleading.

I mean, just to be clear at the outset, I absolutely support taxing those who are making outrageous amounts of income like $500,000 or more, half a million dollars or more.

CEO's salary is completely out of control.

I completely agree with that.

But we have to be very careful here.

The way this information is being presented is extremely misleading because it's sort of confusing two different types of tax mechanisms and presenting them as one.

But that plays right into the right-wing talking points.

The presenting this information this way suggests that the taxes, this tax, the corporate payroll tax, is on workers' salaries.

That is not accurate.

It is a tax on big businesses, not a tax on incomes of high-income households.

Those are two different tax regimes altogether.

And confusing the two, I think it's being done sort of in a way as to sort of play into this idea that The Amazon tax is, as proposed by our movement, is not as progressive or maybe even regressive compared to this proposal, because this proposal puts taxes on those who are earning high incomes.

And we see how misleading that is, because we saw a public comment from a very well-meaning tech person who said, tax me.

Yeah, I'm all for taxing high incomes.

I totally support that.

And I appreciate all the high-income workers who say, tax me, because it's regressive.

But we are not talking about taxes on incomes of people, of workers.

We're talking about corporate payroll tax.

And to be clear, the mechanism of corporate payroll is the same across the Mosquito proposal and the Amazon tax proposal.

So this applies to both.

But this is quite problematic, presenting it this way, because it plays right into the right-wing talking points that suggest that somehow the taxes are on workers.

The taxes are not on workers.

The taxes are not on small businesses.

The taxes are not on medium-sized businesses.

The taxes are on the big corporations.

And as far as that's concerned, I think we have to be clear that, again, this was a misleading point from Council Member Herbold.

that somehow a business with 200 employees all making minimum wage is so sad if they were taxed.

No, this is a tax on the corporation that is profiting off exploiting its workers.

So think about all the contractors of Amazon.

I don't know if they are registered in Seattle and they will be taxed or not, but I'm just using them as an example.

Those contractors that hire the delivery drivers, the cargo handlers, and so on, that deliver Amazon packages, those corporations, the people who own the corporations, the major shareholders, they make massive profits precisely because they grossly underpay their employees.

Those employees are exploited.

not taxing that corporation is not helping the workers in any way.

You're just letting the owners of that corporation go scot-free.

And it's, again, I mean, I know I'm laying a point on this, but this is extremely important not to be misleading.

I wanted to say also that this kind of confusion has not, this is not the first day that this confusion has come in.

Unfortunately, It was even at the press conference that Councilmember Mosqueda held yesterday, which, as I said, I strongly support any and every progressive revenue proposals.

And in that spirit, as I've said before, and I underline it yet again, I have worked with Councilmember Mosqueda, and I'm happy to, and I want to continue to do that.

However, I would also be failing in my duty to working people if I didn't point out glaring problems.

I mean, at the press conference yesterday, Steve Hopper, who is the president of Ethan Stauer Restaurants, said that our legislation, the Savant Morales legislation, is, quote-unquote, massively regressive to mid-sized businesses and low-wage workers.

This is not true.

And all the points we've heard today, they play into that idea that this corporate payroll tax is a tax on either small businesses or on workers.

It is not.

It's a tax on the largest corporations.

And some of the largest corporations, not all, but some of them, I would really urge the council, regardless of which proposal you support, and I hope you support at least one of these proposals, regardless of which proposal you support, I hope that we can at least have basic clarity and honesty in how we are presenting some of these points so that we are not being misleading towards ordinary people who don't have the time to engage in every single I think that's all I have to say.

Thank you.

Thank you.

I'll keep it super short.

I just want to reiterate that my point, regardless of whether or not we have a disagreement of whether or not Councilman Mosqueda, your your proposal interjects more progressivity.

I do not think that the Salant Morales proposal lacks progressivity.

It does have progressivity.

But yours is, I believe, more finely tuned on those businesses.

Nobody is saying that employees are paying this tax.

The businesses are paying the tax.

But this proposal is focused on the businesses that have a lot of I'm a high-wage employee.

I'm a high-wage employee.

But this back and forth, I think, obscures the fact that in councilmember I'm misleading the public about who pays the tax.

I want to underscore the fact that what I just suggested is that we amend the bill to start the tax in 2020, just like her and Council Member Morales' bill does.

Thank you.

Okay, thank you for the clarification on what your amendment was intending to do.

Council Member Swann, very briefly?

I appreciate the spirit in which Councilmember Herbold presented that and of course I want to absolutely, I will fight for any possible progressive legislation and I have shown that through my entire track record.

But the bottom line, I think, that needs to be made, of course, in terms of what is more progressive, what is less progressive.

I mean, if you agree, technically speaking, that this tax is on the business, not on the employees, then you cannot then say that this is more progressive.

Because the only universe in which the idea, the claim that the Mosquito proposal is more progressive than the Amazon tax, The only universe in which that holds any accuracy is if you accept this right-wing point that somehow this is a tax on workers.

It is not a tax on workers, it is a tax on corporations.

And just keeping it very simple, what is more progressive?

A tax that raises far more revenues from the entities that have had enjoyed a tax haven for decades.

That's the Amazon tax.

The tax that continues into perpetuity, that's the Amazon tax.

and the tax that has a higher tax rate on these profiteering businesses, which is the Amazon tax.

In fact, if the Muscata proposal, the tax rate was increased to 1.3%, just that alone, I mean, our back of the envelope calculation is that alone would raise something like $80.7 million additional.

So let's just keep focus on what actually is progressive.

Thank you.

Councilmembers, I appreciate what you are saying.

I think that clarification is helpful and Councilmember, I'm going to move us on.

I do appreciate that we are not in person and it's hard to have these discussions sometimes.

So I want to thank again Councilmember Herbold for your clarification and Councilmember Solan for yours as well.

Let's move on to Council President Gonzalez followed by Councilmember Peterson.

Hi, thank you so much.

Appreciate the opportunity to just make a few brief comments.

I just wanted to acknowledge that I think this is a really important conversation for us.

Obviously, the dire state of our budget is one that we need to take very seriously.

I think it's important for us to be able to do that.

And I just wanted to, again, signal my support for progressive revenue through these various proposals.

I appreciate the spirit in which council member Mosqueda and ultimately, we will have an opportunity as a council to consider these progressive revenue proposals.

I think, again, setting aside the question of degrees of progressivity, as indicated by Councilmember Herbold, I think it's fair to say that we have two proposals on the table right now that are both progressive in nature and I think it's going to be important for us to make sure that we have a, you know, full vetting of both of the proposals to make sure that we as council members feel like we are comfortable choosing one over the other.

And I, you know, I can, I am going to be supportive of all of the progressive proposals because I think we just need to make sure that we are staying committed to identifying revenue sources that aren't going to be on the backs of working families in our city who are just bearing the brunt of taxation in our city and in our state right now.

So I really want to thank I do want to say thank you to councilmembers Sawant and I'm interested in making sure that we are meeting the needs of prior relief funds and really appreciate the integration of.

I think we have a lot of work to do.

I look forward to continuing to dig into the details and to learning more and to continuing to engage our constituencies to make sure that we continue to advance a plan that is going to meet the significant needs of our communities as we begin to recover or think about how to recover from this economic crisis.

Thank you.

I'm so sorry about that.

I got completely disconnected.

I'm so sorry about that.

I know your team did a lot of hard work on this and want to thank city Council central staff who has been working extremely hard over numerous proposals and also appreciate the outreach you did, Councilmember Mosqueda, on this.

That's really important, that outreach that you did to various stakeholders and to be I'm still reviewing the three ordinances.

They were provided yesterday, and I know that's part of the discussion during the budget rebalancing.

Interested in seeing how the mayor is proposing to rebalance the 2020 budget, just so we have all the information at the same time, and I'll be able to have more comprehensive questions at that time.

But just wanted to thank you and all the staff that put everything together.

A couple starting questions for me are the revenue estimates, are they based on pre-COVID economic numbers?

I heard they were from 2019, so does that mean we don't really yet have the benefit of seeing how much revenue we could raise at these particular tax rates at this time?

It's just our best guess from 2019 figures.

Thank you for the question, Council Member Peterson.

So the, to explain, to answer that question, I'll just explain how the estimate was generated.

The starting point was the 2019 Employment Security Department payroll data.

And then the next step was to inflate, or in this case deflate, those figures to a 2021 number.

And I did that using The city budget office's regional economic forecast number for wage and salary disbursement, which indicated a 15% decline from 19 to 20 and a 3% decline from 20 to 21. So that was the mechanism used in this estimate to chew up given economic circumstances.

Thank you.

And so again, I'm just still reviewing these bills.

I appreciate the opportunity to dig deeper into these.

Thank you.

Thank you very much, Councilmember Peterson.

Are there any other comments from folks?

I see Councilmember Strauss.

Councilmember Strauss, please.

Thank you, Chair Mosqueda.

I had comments for our earlier section of discussion with time being limited.

I also wanted to ensure that we didn't run over time today because I know we have a lot of We have a lot of opportunity for further discussion.

What I know from both the meeting that you held last month as well as looking at and analyzing past recessions is that austerity measures don't work.

We need to have a healthy middle class if we are going to have a healthy economy.

and so in your spending plan, what I really truly appreciate is your focus on the childcare and your focus generally on the requests that we have heard from Seattleites across our city.

That is about childcare, that's also about rental assistance so that we ensure that the burden of not being able to meet rent doesn't land on an individual, that we as a city are here to support both and small businesses.

I also really appreciate the focus on immigrant and refugee affairs as we know that other levels of government aren't providing these important resources.

And finally, the ability to support small businesses who have small margins.

These small businesses across our city really make the fabric of our city unique and vibrant.

And so your spending plan, I believe, is very clear.

I really appreciate it.

And thank you.

Looking at the taxing section, it is also clear and easy to understand not having to focus on gross receipts ensures that we're not taxing companies that have slim margins, that we are really focusing on I appreciate your call out for higher levels of government almost as if it's a reverse preemption, because really we need the state to act.

It would be great for the county to act.

And if they're not going to act, we still cannot.

create an austerity budget in this moment in history.

What I've seen throughout my time working in government is many, many pieces of legislation have sunset clauses.

And sunset clauses can be important time checks for us to be able to revamp or retool bills and the pieces of legislation before us, I think that both of these aspects of this bill really do help put the pressure on the state government.

And the state government really needs to act.

And what we have seen is that they have fumbled for years, and we can't wait for them to continue fumbling, especially in this moment in history.

This this bill also allows our businesses and our community members to stabilize during this crisis and and not to get ahead, you know, we all need to be able to take these pieces of legislation into consideration as we're making decisions into the future and so I really do appreciate the fine-tuned, as Councilmember Herbold stated, the fine-tuned nature of this bill.

I do have to say I had a lot of questions today, and thank you to my council colleagues for asking those questions.

Specifically, Councilmember Herbold, you asked some really great questions.

I do have a couple more questions, and I'll follow up with Tom after this meeting.

Thank you, Chair.

Yeah, absolutely.

Any other comments or questions from folks?

I'm not seeing any hands.

I do want to note that Council Member Gonzalez said she was getting off the phone or off the line.

She did let us know.

She let me know that she does want to sign on as a co-sponsor.

She was breaking up a little bit at the end there.

So I want to just say that for folks' knowledge.

And I want to appreciate everybody's questions.

This is, again, the beginning as we look at large corporations paying taxes, again, not on individuals.

thinking about how we identify where we slice that and asking those in a post-COVID world, especially to help small businesses, immigrants and refugees, low-wage workers, and our homeless and unhoused, our homeless and unstably housed folks to be able to get the support they need so that they can not only survive COVID and the economic crisis, but so that we can rebuild a more resilient local economy.

This is a really helpful conversation and it's almost two o'clock.

I want to just double check that there's no other hands going up.

Seeing none, I want to thank our folks from the Central Staff Office.

I know you put a lot of work into these slides and I think that the slide that you did on the math really just helps businesses understand who pays that tax.

I think it's important that we keep reminding folks this is about which businesses it is and how large those businesses are and what slice within those largest corporations are going to be paying that tax.

So I appreciate the math that you did there and all of the presentations that you have put together.

Your time is appreciated.

We know you guys are constantly working around the clock and that's not fair to you.

We appreciate it and I will do a better job of making sure that we both appreciate you and also constantly think about how much work we're requiring of our team at Central Staff.

Thanks to the communication staff and our team within my office for all of the work that they did, especially for helping shepherd us through multiple conversations and to the entire team, Aaron House, Farideh Kuevas and Aretha Basu for putting together this proposal that we're talking about today.

We will adjourn at this point, or I should say we will put a stay on our calendar, our meeting here, and we will reconvene at 2 p.m.

This will be the continuation of the Select Budget Committee to focus on our budgetary items.

We do not have the draft proposed budget from the mayor's office for the 2020 supplemental, I should say 2020 rebalancing budget, but we will have a conversation that continues around our Seattle Police Department's inquest and hearing from other cities actions they're considering or have taken.

We're all in this together as we as local electives respond to the cry for action, urgent action to defund, to reprioritize, and reinvest.

So looking forward to that conversation coming up at 2 p.m.

Council colleagues, enjoy your lunch break.