City Council Weakens Initiative To Protect Critical Services From Trump Cuts

The Seattle City Council’s budget committee just unanimously passed Council Member Alexis Mercedes Rinck’s Seattle Shield Initiative, a nifty little restructure to the City’s Business and Occupation (B&O) tax that would relieve the burden for the vast majority of businesses while also raising funds for critical services under threat of the Trump administration. If it passes out of full council next week — and never doubt the City Council’s ability to pull some last minute fuckery — then voters will have the final say on the November ballot. But Seattle may get stuck with a tax with lower revenue to spend and higher expectations for what the City will spend it on given the amendments the council just tacked on.

Rinck proposed the Seattle Shield Initiative in June. Her original proposal: lower the B&O tax rate for about 90% of Seattle businesses (entirely exempt about 76%) and hike the rate for the top 10% to not only account for the loss revenue from the smaller businesses, but to raise $90 million a year. That money would pay for housing vouchers, shelter, food access programming, gender-based violence services, and the enforcement of labor standards — the critical services at risk under Trump 2.0. 

Let’s be honest: The Seattle Shield Initiative was already a fairly modest proposal I mean, Mayor Bruce Harrell glommed on to it. From the beginning, progressive have supported the measure with the strong caveat that the initiative should be the floor, not the ceiling, in the City’s efforts to bring in new progressive revenue. The City already faces a $251 million deficit and its unclear how much it would cost to truly shield Seattle from all the incoming devastation of the recently passed Big Beautiful Bill Act. 

Even considering all the budget challenges the City faces, the very modest Seattle Shield Intiative went too far for the conservative majority.

Rinck and Council Member Dan Strauss asked that their colleagues wait to introduce exemptions until next week when they would have an amendment to raise the tax rate to offset the loss in projected funds. Strauss held off on his amendment to grant an exemption for companies that loaded or offload cargo from ships, which would shrink the revenue generated by another $1.5 million.  But Council Member Maritza Rivera refused.

Rivera shaved more than $9 million off the projected revenue with two amendments to exempt Seattle Children’s Hospital and Fred Hutchinson Cancer Care. Cleaning up her logic perhaps a bit, Rivera argued if the restructure is meant to address the federal government's attacks on vulnerable populations, it shouldn't exacerbate the tax burden on institutions help care for those populations, especially when the health sector feels the pain of losing funding for research and Medicaid cuts. Rivera acknowledged that the initiative will raise taxes for other hospitals and businesses that deal with vulnerable populations, but she said, multiple times, that the council can't save everyone from Trump.

Rinck argued that the council should help out the health sector in a more "comprehensive way," rather than picking two institutions for exemptions.

Not only will the amended initiative bring in less money, the council also added a whole smorgasbord of new spending priorities, spreading the money even thinner. The move foreshadows a potential repeat of the fate of the City’s JumpStart Payroll tax, a tax earmarked primarily for affordable housing that eventually became a bail fund for a City unable to grapple with its budget crisis. 

But there’s still time. Rinck said in the meeting that she plans to bring an amendment to full council that reworks the math so that the tax raises $90 million even with the new carveouts. She urged her colleagues who supported the carveouts to also support the rate change to restore the $90 million revenue. But with how testy Rivera and Council President got at the mention of that amendment, it may be an uphill battle for Rinck.