Lawmakers Consider Payroll Tax For King County Homeless Programs

OLYMPIA, WA — A bill introduced in Olympia Wednesday would grant King County new authority to create a payroll tax on large businesses to help combat homelessness in the region.

Under House Bill 2907, permitted taxes could apply only to businesses that employ people making $150,000 or more per year. Small businesses and grocery stores are among the categories of employers who would be explicitly exempted from the law.

The Seattle Times reports the legislation allows a payroll tax between 0.1 percent 0.2 percent, which would be paid by an employer and could not be deducted from an employee's paycheck. King County Executive Dow Constantine and Seattle Mayor Jenny Durkan estimated revenue from the tax would raise $121 million annually.

The money raised would be required to fund new affordable housing projects, public safety efforts, behavioral health programs and services for those experiencing homelessness throughout the county.

In the bill's introduction, sponsors of the legislation point to data showing a dwindling number of affordable housing units while thousands remain living on the street.

"More than twenty-two thousand five hundred households experienced homelessness in 2018 in King County alone. In addition, over the past ten years, King County has lost more than one hundred twelve thousand units, over forty percent, of the housing affordable to those living below eighty percent of area median income."

Constantine and Durkan issued a joint statement Wednesday in support of the effort:

"Because of our regressive tax code, King County has limited revenue options. This crisis demands more tools for the region outside of property and sales taxes. Many of the region’s largest businesses, with deep roots in our community, want to participate in solutions, and want to do so with a comprehensive, countywide approach to homelessness, housing, behavioral health, and public safety. We agree, and this bill is a strong step in that direction. We know more input and ideas will help make this bill better, but we cannot miss this moment to act."

The legislative effort follows a hotly contested attempt by the Seattle City Council to levy an "employee head tax" on large employers in 2018. The effort initially passed unanimously but was repealed after intense pressure from business groups and Amazon. That plan would have raised an estimated $47 million annually.

Should the bill pass the legsilature this session, the county expects revenue will be available beginning Jan. 1, 2021.