The Seattle City Council is moving to approve a regressive sales tax to fund public safety, sparking renewed debate about the city’s approach to funding essential services and addressing ongoing financial shortfalls, echoing past controversies over business and property taxes aimed at critical social issues like homelessness and transportation.
Seattle stands at another fiscal crossroads, as its City Council prepares to vote on a 0.1% public safety sales tax. This proposed tax aims to bolster the city’s public safety initiatives, including the expansion of its innovative non-police emergency response program, the Community Assisted Response and Engagement (CARE) Department. The vote follows an 8-1 recommendation from a Select Budget Committee meeting, signaling strong council support despite reservations.
The urgency stems from a projected $143 million deficit in the city’s general fund for 2026, widening to $140 million by 2027, even with other anticipated tax approvals. This new sales tax, authorized by the state Legislature via House Bill 2015, is expected to generate approximately $39 million in 2026. To capture the full year’s revenue, the measure must be approved by October 18th.
A Regressive Dilemma: The Impact on Seattle Residents
The primary concern surrounding the sales tax increase is its regressive nature. Seattle City Councilmember Maritza Rivera was the lone voice against recommending the tax in committee, highlighting its disproportionate impact on low-income residents. Seattle’s current sales tax rate of 10.35% already surpasses that of many major U.S. cities like New York City, Chicago, San Francisco, and Boston. If approved, and combined with King County’s own sales tax increase, the rate would climb to 10.55% in 2026.
Rivera pointed out the compounding effect of recent tax hikes, stating, “We’re essentially taxing poor people to help poor people, and this doesn’t seem right to me.” She cited previous increases like the transportation levy, families and education levy, and business and occupation tax, emphasizing that low-income renters ultimately bear the brunt of property tax increases through higher rents. This sentiment is echoed by the Seattle Metropolitan Chamber of Commerce’s recent survey, which identified affordability as a top concern for voters.
The Ghost of Taxes Past: Seattle’s Head Tax Saga
The current debate is not Seattle’s first encounter with contentious taxation to address pressing social issues. In 2018, the City Council unanimously approved a “head tax” — an employee-hours tax — on large businesses to combat the burgeoning homelessness crisis. This legislation proposed a tax of 26 cents per employee-hour on companies grossing at least $20 million annually, aiming to raise $75 million per year. Proponents argued that Seattle’s economic boom, driven by companies like Amazon, contributed to rising rents and home prices, exacerbating homelessness.
However, the tax faced fierce opposition from businesses, including Amazon and Starbucks, and groups like the Seattle Metropolitan Chamber of Commerce and the Downtown Seattle Association. They decried it as a “tax on jobs” and questioned the city’s spending effectiveness. Amazon even temporarily halted construction planning in protest. Just one month after its approval, public and business backlash, coupled with the threat of a costly referendum campaign led by the “No Tax on Jobs” coalition, forced the council into a stark reversal, repealing the tax with a 7-2 vote. This episode highlighted the formidable influence of corporate power in local politics and the public’s demand for greater accountability in spending on social services.
Ongoing Property Tax Levies: Funding Infrastructure and Housing
Beyond sales and business taxes, property levies have been a consistent mechanism for funding significant city projects. In 2023, Seattle voters were asked to decide on the largest-ever transportation levy, a $1.55 billion property tax over eight years, to replace an expiring levy. This tax funds critical infrastructure projects, including street repaving, bridge repair, bike and bus lanes, and safety improvements. While supporters lauded it as essential for safety and modernization, opponents criticized its high cost and the burden it placed on homeowners and renters.
Similarly, Seattle Proposition 1, a property tax levy renewal for affordable housing, was on the ballot in 2023, designed to fund housing and housing services for low-income households, seniors, families, people with disabilities, and those experiencing homelessness. These recurring levies, while addressing vital needs, consistently add to the cumulative financial pressure on Seattle residents, reinforcing Councilmember Rivera’s point about the overall tax burden.
The Path Forward: Balancing Needs with Fiscal Responsibility
The current public safety sales tax is a testament to Seattle’s ongoing struggle to find stable and equitable funding for its public services. The city plans to use some of the new revenue to double the size of its CARE Department, expanding its team of non-police behavioral health experts from 24 to 48 responders. This initiative aims to free up police resources for other calls, representing a progressive approach to public safety.
However, the core challenge remains: how to address significant social and infrastructure needs without overburdening residents, particularly those with lower incomes. The historical record shows a pattern of ambitious tax proposals meeting strong resistance, forcing the city to reconsider its strategies. As Seattle moves forward with its latest tax proposal, the community will be watching to see if this new approach can strike a balance, delivering essential services while fostering greater trust and shared economic prosperity.
