‘Lights out’ in Seattle in 2022 | Don Brunell

Seattle’s tax increases on businesses may make the one-proud city a ghost town.

‘Lights out’ in Seattle in 2022 | Don Brunell

Far too few people remember the 1972 Seattle billboard: “Would the last person who leaves Seattle please turn out the lights?” The reference was to the massive job losses at Boeing when the supersonic transport project collapsed and the company, then headquartered in Seattle, was on the ropes.

That was a painful time especially for working families and local government leaders. Those who lived through it have no interest in a repeat performance. However, given the direction Seattle is heading today, the billboard may re-emerge by 2022—if not before.

While the worldwide economy has tanked under the coronavirus pandemic, most government leaders are looking for ways to restore jobs in the private sector, their economies, and tax revenues, while struggling to pay for essential services and contain the vicious virus.

On the other hand, Seattle’s City Council is heading in the opposite direction. It overwhelmingly passed the largest tax increase in history on business.

Companies with more than $7 million in annual payroll will be charged a percentage based on how many people they employ with salaries of at least $150,000. Companies that have billion-dollar payrolls will pay an even bigger share for high wage workers. It takes effect in 2022.

“Taxing jobs is bad public policy, and it is even more concerning as Seattle faces double-digit unemployment,” the Downtown Seattle Association wrote. “As the region enters a deep recession and faces near-record job losses, the Seattle City Council moved forward at a rapid pace to tax hundreds of businesses to fund new city programs instead of planning for how to sustain basic city services and working on economic recovery.”

Seattle Times Columnist Jon Talton wrote: “Seattle is facing more economic uncertainty than the “Boeing bust” of the 1970s. The unemployment rate is close to 14 percent, hotel revenues are off 85 percent compared with this past year, the lucrative cruise season is shut down along with a huge swath of businesses that can’t work remotely or provide essential deliveries. All of this is exponentially worse than the Great Recession.”

Council members call it the “JumpStart Seattle” plan which could end up becoming the Bellevue-Redmond Full Employment Act, Talton wrote.

Some business leaders are looking beyond Washington. For example, last month, Peter Rex, founder of Rex Teams, a $1.5 billion tech, investment and real-estate firm, announced its move from Seattle to Austin in the Wall Street Journal.

Employers in Washington are facing other higher costs.

For example, by 2022, taxes that employers pay to cover unemployment benefits are expected rise to an average of $936 per worker. That’s almost three times the expected 2020 figure, according to the state’s Employment Security Department (ESD). ESD hints taxes would be even higher if state is forced to borrow from the feds to pay extended benefits or if there is a spike in layoffs.

State tax revenues are falling behind. There is an $8.8 billion shortfall in Washington’s State operating budget projected by 2023 prompting a call for additional taxes. The June revenue forecast reduced estimated state revenues by $4.540 billion (8.7 percent) in 2019–21 and by $4.342 billion (7.8 percent) in 2021–23, the Washington Research Council reports.

If that isn’t depressing enough, sections of Seattle, the proud city which drew millions of visitors to the World’s Fair in 1962, is littered with broken glass and boarded up businesses, restaurants, stores and government offices. This once beautiful city is laced with graffiti.

What’s next for Seattle? It could get worse.

Seattle City Council members are looking to defund the already short-handed police department by 50 percent. Seattle needs to reverse course and once again be a welcoming city with safe streets. Otherwise, people will bypass it.

Don C. Brunell is a business analyst, writer and columnist. He retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at theBrunells@msn.com.


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