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Business group launches campaign to overturn ‘head tax’

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The measure passed by City Council would raise between $40 and $50 million a year for affordable housing and homeless services

A scattering of tents are visible under a curvy freeway bridge, leading to a dense urban center full of skyscrapers. EB Adventure Photography/Shutterstock

Earlier this week, the Seattle City Council unanimously passed an employee hours tax affecting businesses making $20 million or more in gross adjusted income, affecting about 3 percent of Seattle’s businesses. And despite the tax being slashed nearly in half from around $500 per full-time employee to $275, many business groups are not happy—especially a coalition of businesses that are launching a campaign to overturn the law.

The coalition, according to filings with the Seattle Ethics and Elections Commission, is being led by James Maiocco, chief business development officer of mobile payment company Pushpay, and Saul Spady, grandson of Dick’s Drive-In founder Dick Spady and president of marketing company Cre8ive Empowerment. (Maiocco told Puget Sound Business Journal that he’s not representing Pushpay, which is based in Redmond.)

The group will need to gather around 18,000 signatures to qualify for a ballot measure.

While the spending plan for the $40 to $50 million raised each year from the tax, which expires in 2023, is not solidified yet, a non-binding plan passed by City Council would devote the majority of the funds to building affordable housing—about half with supportive, wraparound services serving more vulnerable populations.

The rest would go to “immediate” needs—according to a recent draft spending plan, it could fund around 250 shelter beds, two temporary encampments with room for 54, 153 safe parking spots, and 289 “immediate housing” units (“rental, operating, master leasing and/or capital subsidies”). In addition, it would fund mobile hygiene and health services, including showers, laundry, toilets, and medical care, plus garbage pickup.

Staffing would also be fortified, with additional behavioral health and housing navigation outreach employees and money to help address turnaround for existing service providers, which tend to have extremely low rates of pay.

Mayor Jenny Durkan, who opposed the original, higher tax plan, signed the watered-down version earlier this week, but expressed reservations about the current spending plan