Seattle's Mayor Harrell proposes BNO tax increase to combat $251M deficit

Seattle City Council is set to address a significant $251 million budget deficit with a new proposal aimed at generating $90 million annually through a temporary increase in Business and Occupation (B&O) tax rates. This initiative, known as the Seattle Field Initiative, is designed to safeguard essential human services that are currently at risk due to federal funding threats and economic uncertainties. The funds will support critical programs, including housing vouchers, shelter services, and food access, particularly in light of recent federal cuts to programs like SNAP.

The proposed changes to the B&O tax structure would raise the tax threshold exemption from $100,000 to $2 million in receipts, allowing approximately 76% of small and medium-sized businesses to avoid taxation altogether. This adjustment aims to bolster Seattle's economy and enhance its competitiveness with neighboring jurisdictions, as nearly 90% of businesses would see a reduction in their tax burden.

In addition to the B&O tax proposal, the council will also discuss the "Roots to Roofs" legislation, which seeks to address the city's ongoing affordability crisis. This bill promotes community-led affordable housing initiatives while focusing on anti-displacement and racial equity. It introduces a pilot program that incentivizes affordable housing production through height and floor area bonuses, particularly in historically marginalized areas. This initiative is a response to community feedback and aims to mitigate the adverse effects of new developments on vulnerable populations.

Lastly, the council will consider legislation to streamline the subdivision approval process. This change would delegate final approval authority to the Department of Transportation, reducing the time required for housing projects to move from planning to execution. This effort is expected to enhance governance efficiency and expedite the development of much-needed housing.

These discussions will take place in committee meetings this week, with the council emphasizing the urgency of these proposals in light of the current economic landscape and the pressing need for affordable housing solutions in Seattle.