Burgess against head tax for homeless, pitches short-term rental tax instead

SEATTLE — Seattle Mayor Tim Burgess came out strongly against the idea of taxing businesses to pay for homeless services and affordable housing.

In an interview with KIRO 7 on Tuesday, Burgess said "the tax on jobs is ill-advised."

"This nonsense that business is the enemy is just that. It's nonsense," Burgess said.

A proposal by council members Kirsten Harris-Talley and Mike O'Brien would tax businesses $100 per worker.

It would apply to companies making at least $5 million per year and would raise an estimated $20 million to $24 million annually.

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Burgess has requested $63 million in city spending next year to help the homeless and to fix the housing crisis, an amount he says is 62 percent more than the city spent in 2014.

O'Brien says there is still a $55 million gap in what's needed to fully address the crisis.

Council members Kshama Sawant and Lisa Herbold expressed support for the proposal.

"This is not about punishing anybody," Herbold said. "This is about holding everybody accountable for the need for people in our community to prosper."

Supporters estimate the tax would apply to just the top 10 percent of businesses.

Burgess said the tax would be hard on small businesses, such as retailers and restaurants that operate on thin margins.

"This is a killer for them," Burgess said. "It also sends the wrong signal. Why would we tax the creation of jobs? We should be doing just the opposite. We should be incentivizing the creation of jobs."

Burgess said there was nothing that could be tweaked about the proposal to get his support, but also stopped short of promising a veto.

"I'll cross that bridge when we see the final product that comes from the City Council," Burgess said.

Ten years ago, when running for City Council, Burgess campaigned against a head tax that was then on the books in the city.

It was rescinded during the Great Recession.

Burgess proposes an alternative to the head tax that he says would raise between $8 million and $10 million per year.

While on the City Council, Burgess got an ordinance passed out of committee to regulate and tax short-term rental units, such as those rented through Airbnb and VRBO.

"It imposes a tax, a tax that these short-term rental platforms are willing to pay," Burgess said. "So I say to the council, don't adopt another tax on jobs and businesses. Instead, adopt the short-term rental regulations."

A spokeswoman for Airbnb wrote, "We support adding a short-term rental tax that goes toward affordable housing in Seattle, but we want to make sure there's a level playing field so small mom-and-pop hosts are not taxed at a rate that is higher than what the big hotels are paying."

A spokesman for Expedia, which owns Home Away, wrote that his company hopes the full council does not change the ordinance that passed the committee. "However, despite months of research and collaboration with Expedia and other local stakeholders, some members of the City Council are considering sweeping, last-minute changes to the proposal that would move Seattle in the wrong direction, including a higher nightly tax and a requirement that owners live in their vacation rentals."

Burgess left his council post to became mayor after the resignation of Ed Murray, who is accused of sexual abuse.

He will remain in office until late November, when the winner of next week's election, either Cary Moon or Jenny Durkan, is sworn into office.