We sent the below letter via email to the City Council regarding the commuter tax. The Council plans to vote on the cut on Thursday, November 12 or Friday, November 13.

Dear Councilmembers,

I am writing to urge you to keep the commuter tax (Employee Hours Tax) and not repeal it during your budget votes on Thursday and Friday. The Council’s concern for Seattle’s businesses is admirable, but this is the wrong solution to the problem -- at $91 per year for the average business, the cut will offer little succor to struggling businesses. Meanwhile, the 20-year Bridging the Gap infrastructure-building program would be robbed of $100 million.

That fiscal hit, together with the city’s likely need to allocate new commercial parking tax revenue and new vehicle fees to the deep-bore tunnel, means the city’s vaunted Bicycle and Pedestrian Master Plans would become empty gestures. For the foreseeable future, too little funding would be available for sidewalks, bike lanes, and other such improvements. Now is time to make good on the Council’s commitments to build a walkable, bike-friendly, sustainable city. Keep the commuter tax.

If you do choose to cut it, I suggest two amendments to your plans. First, merely suspend the tax and reinstate it in two years when the economy will improve. Second, direct council central staff to prepare a report on the cut’s economic effect, with the report due to the Council in one year. The report should focus on the number of jobs and the amount of economic growth created directly by the cut. That way, the Council will accumulate actual evidence whether tax cutting is sound economic policy.

But the Council should not cut the commuter tax, because the economics tilt in favor of retaining it. Interest rates on municipal bonds are very low, and contractors are submitting low bids for city projects. By borrowing money now against future tax revenue, the city can get the most for the taxpayers’ money while giving the local economy a boost, especially in the beleaguered construction industry. Think of all the new construction projects and new living-wage jobs that will result.

Keeping the commuter tax will create more jobs, allow the city to build when its buying power is greatest, and move the city towards achieving its progressive transportation goals.

Sincerely,

Gary Manca
President, Friends of Seattle
 

Councilmember Sally Clark, writing in the July edition of her "Seattle View" newsletter (the bolding added by us):

If you're overwhelmed reading stories about the down economy, join the club. Budget forecasts look grim for this autumn. Employers large and small continue to shed costs – like workers.  It's disheartening to see employers in our neighborhood business districts close up shop, both because of what that means to sidewalk energy, but also for all of the employees who no longer have income or health coverage.

Earlier this year City Council reviewed ways we can help lessen the impact of the recession and possibly speed recovery. Repeal of the Employee Hours Tax (sometimes known as the "head tax") was one of many ideas listed that could help Seattle businesses. To comply with the EHT, passed in 2006 as part of the Bridging the Gap transportation funding strategy, employers pay $25 for every employee who regularly drives a single occupancy vehicle for their commute. They pay zero on employees who bike, walk or carpool.

[read the rest below the jump]