New Social Housing Initiative to tax businesses to fund up to 2,500 over 10 years

New Social Housing Initiative to tax businesses to fund up to 2,500 over 10 years

At the press conference on Tuesday, our Neighbors House! (HON) has launched a citywide ballot initiative to create a new progressive tax to permanently fund the social housing Public Development Authority, which voters approved on the February 2023 ballot measure.

If HON can gather at least 26,520 signatures within 180 days, voters will decide this November whether to tax big business for more housing. With the highest turnout due to a presidential race on the ballot, the success of their initiative, especially alongside initiatives that eliminate taxes on the ultra-wealthy at the state level, could end the debate about voter sentiment in progressive tax verses. The belt budget is the City’s most pressing, current question in the face of a quarter-billion-dollar deficit next year.

JumpStart’s Hot Little Sister

In the 2024 city budget, the City of Seattle failed to establish a permanent, sustainable source of funding for the PDA and only paid for start-up costs required by law. Having seen the previous council fail to muster the political will to find money for social housing, HON Policy and Advocacy Director Tiffani McCoy said her organization did not want to waste time lobbying the new, more conservative council.

Enthusiastic to see his bill through, HON will ask voters on an initiative that would impose a 5% payroll tax on businesses that pay employees more than $1 million a year. The tax will begin collecting in 2025, and HON estimates it will generate $52 million a year. The money will pay for about 1,700 to 2,500 units of newly constructed and purchased social housing, from studios to three bedrooms, for renters making 0-120% of area median income (AMI), with rents at 30%. their income. HON’s estimates do not include any bonds or state or federal funds that would pay for more units.

Does the payroll tax sound familiar? If so, that’s probably because in 2020, the Seattle City Council will charge the largest businesses—those spending at least $7 million on payroll—from 0.7% to 2.4% of their payroll. JumpStart” accepted the payroll tax. over $150,000 a year. HON’s Social Housing payroll tax will not take any revenue from JumpStart, fulfilling the campaign’s original promise not to take away from existing funds for affordable housing.

While both JumpStart and this social housing payroll tax hit some big businesses (sorry, Amazon), McCoy said the HON tax would hit some sectors that JumpStart didn’t. For example, JumpStart exempts grocery stores and HON will not be taxed. The HON tax, McCoy said, would also generate revenue from wealth management and real estate companies that aren’t big enough to pay JumpStart but still pay incredibly high salaries.

While HON’s proposal lays the groundwork for a court-tested JumpStart, it may offer some solace to politically anxious observers worried that the tax could face legal challenges, with opponents likely to be perpetually under political attack, as they have been. they will stay. With JumpStart.

Since its inception, Mayors have tried to raid JumpStart funds, which Council earmarks specifically for affordable housing, green new contract projects and economic development, to pay for their priorities. Now it appears that big business wants to direct its newly acquired city council to move JumpStart dollars permanently into the general fund, defunding these vital programs to fill a huge budget gap.

Fortunately for HON, under City bylaws, their tax would be safe from such profanity for two years after passing. wow

State of the game

But before I get too far ahead of myself, McCoy expects a strong, well-funded opposition campaign against the measure. HON raised more than $300,000 for their last campaign, but their enemies have richer, nastier donors who could bury them. After all, big business and real estate spent more than $1 million buying a council that would oppose the tax.

Many of the newly elected said these things Real Change News they support PDA funding. Council members Tanya Woo, Tammy Morales, Joy Hollingsworth, Maritza Rivera (sort of) and Cathy Moore all said yes, the City should pay PDA more. Councilmen Rob Saka and Dan Strauss said “maybe,” and Councilman Bob Kettle was not interviewed.

Still, some council members beholden to their anti-tax donors may abuse HON’s campaign as an excuse to not pass other new progressive revenue to fill the budget gap. To be clear, the board would be very wrong to do this because HON’s money specifically funds PDA. But with Council President Sarah Nelson at the helm, evil is to be expected.

Plus, right-wing multimillionaire Brian Heywood cut progressive income at the state level in this election with his initiative to repeal the capital gains tax. His mischievousness scared the previous city council out of new progressive revenue last year, and it also helped prevent Democrats in the State Legislature from getting much done this session.

Even with all those external factors in mind, McCoy said he’s not nervous about it. He knows his team can win. He knows that Seattle supports social housing. And he knows the housing crisis won’t wait for Heywood or big business to change their minds.

“We can’t wait for a more opportune time to get this through,” McCoy said.

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