March 27, 2018 Seattle City Council 600 Fourth Avenue 2nd floor Seattle, WA 98104 Dear City Councilmembers, We write to you today as business leaders who collectively employ or through our associations represent more than 700,000 jobs in the Seattle region. The business community of Seattle urges the Seattle City Council to reject the call for $150 million a year in additional taxes from your Progressive Revenue Task Force. As you know, the business community respectfully declined to participate in the Task Force process because the members were directed to justify, rather than evaluate, the need for an employee hours tax of $25-75M a year. The rushed process was designed to respond to the political environment at Council, rather than the scale or depth of the problem facing our region. Additionally, we feel the public-facing rhetoric in support of an employee hours tax has been intentionally misleading. For example, some task force members and Councilmembers have publicly stated that “business needs to pay their fair share,” ignoring the fact that an estimated 57% of Seattle’s General Fund revenue comes from taxes paid by businesses. Many in the business community have repeatedly supported multiple local and regional measures that raised our own taxes, but improved the quality of life for all – such as the Seattle Housing Levy, the Move Seattle Transportation Levy, Sound Transit Phase 3 and more. We believe the false narrative that business is paying less than its share, coupled with a rushed process with a predetermined outcome, resulted in the task force’s current recommendation, which is double the maximum end of the range the Council had initially identified. The City of Seattle’s treasury has long benefited from the generosity of Seattle voters and taxpayers and from the prosperity of its booming economy. Spending by the City of Seattle has far outpaced both population increases and inflation – by nearly 4 to 1. The City’s General Fund and voter-approved spending has grown from $1.28 billion in 2012 to $1.78 billion in 2016, a 39% increase. Over the same period, Seattle’s population grew by only 11%, and cumulative inflation was only 6.8%. One must ask, what do we have to show for this drastic increase in spending? These spending increases have not produced positive results in managing our homelessness crisis, which is the number one issue facing our region. Recommendations from national homelessness experts that Seattle could make serious progress in addressing homelessness have been ignored (at best) and arguably rejected by the Council (at worst). For example, the Council recently restored funding to certain homeless service providers that failed to meet the performance requirements of the recent Request For Proposal process. This is a concrete example of the Council’s politicization of the homeless services contracting system, and lack of discipline and the will required to demand outcomes for the tax dollars it is spending. The ineffectiveness of the City’s approach to homelessness is on display on our streets and sidewalks and in the annual data from the One Night Count. The number of unsheltered homeless in Seattle has increased by 37% in the last three years despite the City of Seattle’s increased spending. This is more than just a squandering of Seattle taxpayers’ generosity; this is a basic failure to meet the needs of our homeless population despite having a budget that is the envy of cities larger than Seattle. 1 Lastly, we are shocked to hear that, despite raising taxes twelve times since 2014, the City of Seattle may be facing a near-term budget shortfall measured in the tens of millions of dollars. It is astounding to learn that the City Council somehow adopted a budget beyond its means at a time when historically high revenues are rolling into the City from unprecedented economic growth, property values, consumer spending and taxable construction. We are hopeful that the regional One Table process convened by the Mayor and County Executive will result in a balanced approach to include reforms, efficiencies, and priority programs with measurable outcomes that reduce the unsheltered homeless population in Seattle and King County. In anticipation of One Table’s work, we urge the City Council to join with the region to embrace effective and sustainable strategies to eliminate homelessness. If, through that process, it is demonstrated that funds are needed and can be effectively spent, the business community is committed to supporting a regional effort to determine sufficient, appropriate revenue sources that are equitable, sustainable, and entirely focused on solving homelessness. Sincerely, Jon Scholes Downtown Seattle Association Marilyn Strickland Seattle Metropolitan Chamber of Commerce Louise Chernin Greater Seattle Business Association Warren Johnson The Walsh Group Jeff Thompson Freehold Mark Karason NAKretailmgmt Tom Parsons Holland Partner Group Jim Neal Talon Private Capital Cynthia Berne Long Bay Enterprises Inc Larry Larson Hostelling International – American Hotel Erwin Park Madison Bay Commercial Paula Rees FORESEER John Teutsch Teutsch Partners Mark K. Mason HomeStreet Bank Bart Brynestad Pannatoni Development Company Inc Jon Bridge Ben Bridge Jeweler Gary Bodenstab Johnson Barrow Inc EHS International Inc Pat Callahan Urban Renaissance Group 2 Shannon Woodman Washington Alarm, Inc. Jim Sheppard Commercial Filter Sales Kari Kirkland Emerald City Trapeze Arts David W. Goldberg Mithun David Martin Austin-Mac, Inc. Chuck LeFevre Esquin Wine & Spirits Bernie Griffin The 5th Avenue Theatre Bill Kaczmarek Seattle Textile Company Matt Lincecum & Sara Nelson Fremont Brewing Russell Flint Rain Shadow Meats Darcy Hanson Merchants Cafe & Saloon Jesse Sweeney Caffe Umbria Nadia Rodriguez Bodytonic Pilates D. Chad Quilici ACG, Inc. Dani Cone Cone & Steiner/Fuel Coffee Heather Chitty Madres Kitchen Nathan McLaughlin & Andie DePaul SoDo Grocery Outlet Rebecca Sanders First Pointe Management Michael Porter Greenwood Heating & Air Conditioning Billy Pettit Pillar Properties Bruce Eastes MFS Properties, Inc. Ronda Babcock General Manager Moco, Inc. Kima Yandell Katwall, Inc. Randy Redford Puckett & Redford Michael S. Medina Graphite Design Group Mary Bass StaffPM Rob Aigner Harsch Investment Properties Christopher Cutting Cutting Law Office Lance Mueller Lance Mueller & Associates Richard Waller United Electric Motors Dave Stolecki Valley Electric Gabriel Benavidez Washington Chain & Supply Jim Coughlin Coughlin Porter Lundeen Jonathan Hill JHdev Consulting Mike Voorhees Security Properties Nicole Russell Studio Seven / Monster Concerts INC 3 Rick Beaubelle Seattle Canine Club A-P Hurd SkipStone Brian Tatman Tat’s Deli Angela Stowell Ethan Stowell Restaurants Craig Schafer Hotel Andra Linda Lillevik Carey & Lillevik, PLLC Megan Coombes Altstadt Kathy O’Kelley Hines Ken Cederstrand Cederstrand Rentals LLC Tamara Murphy & Linda Di Lello Morton Terra Plata Ron Klemencic Magnusson Klemencic Associates Paul Zuckerman Bravo Branding Zahoor Ahmed R.C. Hedreen Co. Mark Barbieri Washington Holdings Harvey Ward Van Allen II Casco Antiguo Seattle Tomas E Odell MHT Insurance Don Wise Metzler Edwin Shepherd III, DC Shepherd Family Chiropractic Marilyn Boss Marsh Julia Obien YOM Reporting Scott Shapiro Eagle Rock Ventures LLC Les Biller Harborview Capital Linda Suyama Azuma Gallery Bill Weise Silver Cloud Hotel - Seattle Stadium Patrick A. Gordon ZGF Architects, LLP Steve Vincent Puget Sound Bank Brian F Carter Integrus Architecture Clark Schaefer MEECO Manufacturing Company, Inc. Jason Pecarich Division Road Inc. Brian Carter Integrus Architecture Phen Huang Foster/White Gallery Bob Rebar Rebar & Associates, Pllc Mark Houtchens Vance Kimberly Kean Gene Johnson Plumbing & Heating 4 Brad Miller Miller-Nicholson, Inc./Honda of Seattle/Toyota of SEATTLE Jeffrey Pelletier Board & Vellum Lenka Mittelbach Alternative Suites International LLC James Alberson Top Tier Training and Development Mason Hebert Lottie's Lounge/Jude's Juergen Oswald Hilton Seattle Charles Stempler Alphaprint Inc DBA AlphaGraphics Chris Rosbough Synap Consulting Brian T Duffy Duffy Wealth Management Brian F Carter Integrus Architecture James R. Blissett The design COLLECTIVE P. Troy Sorensen Sorensen Consulting LLC Todd V. Biesold Merlino Foods Paul Silver LaVida Massage Nans Trees Nan Trees Massage and Yoga Mary McWilliams Mary Williams Company Laura Clise Intentionalist Kevin C. Barry Industrial Communications LLC Amanda O’Rourke Greenwood, Ohlund & Co., LLP Paul Suzman Office Lease Rodney Kuhn Envision Telephony, Inc. Edward Beeson Gigs4U, LLC Megan Managan Washington Bankers Association Fran Bigelow Fran's Chocolates Terry N. Gangon Gangon Insurance Agency, Inc. (State Farm) Joe Fugere Tutta Bella Hamilton H. Gardiner Holmquist + Gardiner PLLC Lisa McNelis McNelis Architects Zoehana Minkove Fox’s Seattle 5 John Veentjer Marine Exchange of Puget Sound Cheryl Mangio Yamaguchi Obien Mangio, LLC Harry Pohlman Fine Cuts Tom Norwalk Visit Seattle Thomas S. Bayley C. D. Stimson Company Arvind K. Nerurkar Coffman Engineers, Inc. Craig Swanson Redside Partners, LLC Heidi de Laubenfels Nyhus Communications Jill Cronauer Hunters Capital Real Estate Bill Weisfield Elliott Bay Asset Solutions Taylor Hoang Pho Cyclo Café Chris Tudor Travelodge Seattle by The Space Needle Travis Rosenthal Tango, Rumba, Sand Point Grill Todd Carden Elliott Bay Brewing Co. Bill Hilf Vulcan Inc. Brent Norton Elliott Bay Brewing Co. Ryan Suddendorf Evergreens Salad Linda Derschang The Derschang Group Judith Runstad Foster Pepper Wendy Gillihan Gryffin Consulting 6 Juergen Oswald Hilton Seattle Rachel Marshall Rachel’s Ginger Beer Jenne Oxford Kimpton Hotels & Restaurants Dan Austin Peel & Press, Flight Path Pete & Emily Hanning The Red Door Tony Toppenberg President, NAIOP Washington State Frank Foti Vigor Jim Waird Washington Multifamily Housing Association Ted Caloger AIA - MG2 Corporation Lee Chain HKA Elevator Consulting, Inc Julie Alexander Artspace Projects, Inc. Rich Fox Seattle Restaurant Alliance Shaiza Damji Hotel Nexus Travis Stanley-Jones Mulleadys Irish Pub & Restaurant Destiny Sund The Confectional Aaron Barthel Intrigue Chocolate Co. Brian Stadings CenturyLink Brian Huseman Amazon Leslie Thomson Dream Dinners Peter Schrappen Northwest Marine Trade Association Richard Hill W Seattle Carol Nelson KeyBank Chad Mackay Fire & Vine Hospitality Louise Little University Book Store, Inc. Julie McAferty Greenlake Guest House Sue Anderson Virginia Mason Medical Center Hannah and Grant Carter Bitterroot and Mammoth Kevin Carty & Roy Goecks Exhibits Northwest Elise Lindborg ZippyDogs Anne Davis & Suzanne Royer McCone Annie’s Nannies, Inc. Jean-Pierre Vidican The Westy Jeff Hawes FC Bloxom Co. Paul Ritums The Westy Christopher D. Johnson Parsons Shannon Sheron Seattle Hotel Association Laura Robinson 5Focus Movement Studio Joe Quintana, Randy Bannecker, John Engber ClearPath Partners Jim Spady Dick’s Drive-In Restaurants, Inc. Steve Vincent Puget Sound Bank H.S. Wright III Seattle Hospitality Group Eleana Del Rio Koplin Del Rio Paul Heppner Encore Media Group Bonnie Harris Scotty’s Juicetree Ron Sevart Space Needle 7 Carla Murray Marriott International Kamala Saxton Marination Mobile Pamela Hinckley Tom Douglas Seattle Kitchen