Chill! New tax helps homeless without hurting small businesses

City workers remove a structure during a sweep of Ravenna Woods homeless encampment near Seattle's University Village neighborhood on April 17. (Photo by Matt M. McKnight/Crosscut)

Seattle business owners, like all Seattleites, recognize the growing homeless crisis in our city. It’s hard — if not impossible — to miss. We see more people sleeping in tents under highways. We see more families evicted from their homes and vehicles, unable to find affordable housing and impacted by rising rents, and facing an assortment of social and economic challenges. We witness those experiencing a mental health crisis in broad daylight on public streets.

As the founder and co-owner of the Chaco Canyon Organic Cafe and lifelong Greenwood resident, I share the same values as many of my neighbors and want to help those in need. When I was asked to join the city’s Progressive Revenue Task Force, I knew I would need to take a seat at the table and help form a workable solution rather than merely watch from the sidelines.

Seattle cannot prioritize or budget its way out of our homelessness crisis. Repeat that in your head three times. Resolving homelessness will not happen unless there is substantial new revenue. An employee hours tax on our most prosperous businesses is the best and most progressive way to get there. We know that others have differing opinions and they were voiced at the City Council’s business roundtable on Tuesday. We also know every business is unique, that revenue and profit are not the same thing, and while one company may be able to absorb thousands of dollars in an employee hours tax, others simply cannot afford a hundred dollars.

That’s why the task force proposed that for small businesses — like Chaco Canyon — nothing will change. Depending on which business tax option from the task force that the Council votes to implement, it is likely that businesses with taxable gross receipts of $20 million or more (in Seattle) will pay this tax. There is a misconception that our beloved small businesses will be affected by this policy, but this is simply not the case.

These new revenue sources, which could amount to an estimated $75 million per year to start, will be entirely dedicated to addressing homelessness. Eighty percent of the revenue will go toward building 1,700 affordable housing over the next five years, which is real and tangible change. Twenty percent will pay for support services, including emergency and shelter services for people experiencing homelessness and for those or at substantial risk of becoming homeless. 

Like many, I have wondered how are our tax dollars and business fees already being used to help the homeless — and why isn’t it enough? The city will spend $66 million on homeless services this year alone. These investments go toward transitional housing, emergency shelters, outreach and homeless prevention programs, among other things.

In addition to services, Seattle has leveraged our Housing Levy dollars (a property tax) to fund and operate 2,419 affordable housing units. There are 2,580 more affordable units in the pipeline, either financed and in the design phase or under construction. So, money is being spent on positive, necessary and effective programs.

However, Seattle has seen a massive uptick in homelessness and we recognize that housing affordability is a key component in the complex causes of homelessness. Local government houses and provides services to thousands of people experiencing homelessness each year, but the need is growing faster than we can keep pace and tangible solutions are expensive.

Like small businesses, Seattle’s largest businesses understand that more revenue is needed to address structural causes of homelessness. We’ve already heavily relied upon property taxes and sales taxes, and as a city we highly tax small businesses to generate revenue for our existing budget.

A progressive business tax is not only our best option, but it is the right thing to do if we are dedicated to providing housing to people experiencing homelessness and not just maintaining the untenable status quo.

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About the Authors & Contributors

Chris Maykut

Chris Maykut is founder and partner of Chaco Canyon in West Seattle and Greenwood.