Seattle divided as leaders halt tax on companies like Amazon

Seattle leaders on Tuesday repealed a tax on large companies such as Amazon and Starbucks after a backlash from businesses, a stark reversal from a month ago when the City Council unanimously approved the effort to combat a growing homelessness crisis.

People in favor of the repeal of a tax on large companies such as Amazon and Starbucks that was intended to combat a growing homelessness crisis hold signs that read "No Tax on Jobs" as they wait for the start of a Seattle City Council meeting, Tuesday, June 12, 2018, at City Hall in Seattle. Members of the Council were expected to vote Tuesday on whether or not to repeal the tax. (AP Photo/Ted S. Warren)

A divided crowd chanted, jeered and booed at the council meeting, drowning out the leaders as they cast a 7-2 vote. People shouted, "Stop the repeal," as others unfurled a large red banner that read, "Tax Amazon." An opposing group held "No tax on jobs" signs.

The vote showed Amazon's ability to aggressively push back on government taxes, especially in its affluent hometown where it's the largest employer with more than 45,000 workers and where some have criticized it for helping cultivate a widening income gap that is pricing lower-income employees out of housing.

The tax was proposed as a progressive revenue source aimed at tackling one of the nation's highest homelessness numbers, a problem that hasn't eased even as city spending grew.

A demonstrator in favor of the repeal of a tax on large companies such as Amazon and Starbucks that was intended to combat a growing homelessness crisis holds a sign that reads "No Tax on Jobs" as he waits for the start of a Seattle City Council meeting, Tuesday, June 12, 2018, at City Hall in Seattle. Members of the Council were expected to vote Tuesday on whether or not to repeal the tax. (AP Photo/Ted S. Warren)

Businesses and residents demanded more accountability on how Seattle funds homelessness and housing and said the city should take a regional approach to the problem. Many worried that Amazon and others would leave the city as the companies sharply criticized the tax.

The online retailer even temporarily halted construction planning on a new high-rise building near its Seattle headquarters in protest. Amazon called the vote "the right decision for the region's economic prosperity."

The company is "deeply committed to being part of the solution to end homelessness in Seattle," Drew Herdener, an Amazon vice president, said in a statement.

City leaders underestimated the frustration and anger from residents, businesses and others over not just a tax increase but also a growing sense that homelessness appears to have gotten worse, not better, despite Seattle spending millions to fight it.

Seattle City Council president Bruce Harrell, left, speaks, Tuesday, June 12, 2018, during a council meeting at City Hall in Seattle. Harrell and other members of the Council were expected to vote Tuesday on whether or not to repeal a tax on large companies such as Amazon and Starbucks that was intended to combat a growing homelessness crisis. (AP Photo/Ted S. Warren)

It poured $68 million into the effort last year and plans to spend more this year. The tax would have raised roughly $48 million annually.

But a one-night count in January found more than 12,000 homeless people in Seattle and the surrounding region, a 4 percent increase from the previous year. The region saw 169 homeless deaths in 2017.

Many supporters called the repeal a betrayal and said the tax was a step toward building badly needed affordable housing. They booed council members, imploring them to keep it and fight a coalition of businesses trying to get a referendum overturning the tax on the November ballot.

Several leaders, including three who sponsored the legislation but voted to repeal it, lamented the reversal and conceded they didn't have the resources to fight the referendum.

Councilwoman Lisa Herbold said it "was truly our best option" and that she repealed it with a heavy heart. She lashed out at business interests for blaming the problems on government inefficiencies.

"Gutless!" someone shouted as she explained her rationale. She and others said they didn't want to spend the next several months in a political fight that would do nothing to address urgent needs.

Demonstrators opposing the repeal of a tax on large companies such as Amazon and Starbucks that was intended to combat a growing homelessness crisis hold a sign that reads "Tax Amazon" as they wait for the start of a Seattle City Council meeting, Tuesday, June 12, 2018, at City Hall in Seattle. Members of the Council were expected to vote Tuesday on whether or not to repeal the tax. (AP Photo/Ted S. Warren)

Councilwoman Teresa Mosqueda voted against the repeal, saying the lack of a replacement strategy would mean more months of inaction.

"It was not a tax on jobs," she said, calling it "a much needed down payment to our housing crisis."

Denise Moriguchi, chief financial officer at Asian grocery store chain Uwajimaya, told the council that she doesn't like seeing people living in tents but that the tax was not the answer. She said it would hurt small businesses with thinner profit margins than Amazon.

Seattle's so-called head tax would have charged companies about $275 per full-time worker each year to fund affordable housing and homeless services. It targeted nearly 600 businesses making at least $20 million in gross revenue and would have taken effect next year.

People attending a Seattle City Council meeting hold signs that read "Tax Amazon, Housing for All," and "No Tax on Jobs" listen to public comment on the debate over a possible council vote whether or not to repeal of a tax on large companies such as Amazon and Starbucks that was intended to combat a growing homelessness crisis, Tuesday, June 12, 2018, at City Hall in Seattle. (AP Photo/Ted S. Warren)

Days after it passed, the business-backed No Tax On Jobs campaign began gathering signatures for the ballot and raised more than $280,000 in cash contributions in just weeks.

It remains to be seen whether Seattle's retreat will have a chilling effect on other cities considering taxes on big tech companies to help mitigate the effects of growth.

The City Council in Mountain View, California, where Google is based, will vote June 26 on whether to put a similar measure before voters in November. The "Google tax" aims to alleviate transportation woes and high housing costs in the Silicon Valley city south of San Francisco.

Mountain View Mayor Lenny Siegel said Seattle's about-face hasn't changed his support for the tax.

"It appears that we have a better relationship with our business than Seattle does," Siegel said.

He said Google hasn't taken a position on the proposal and that no "groundswell" of opposition has materialized from the Internet search giant and other companies.

Amazon has been aggressive about fighting taxes. It recently said it would block Australians from purchases on its international websites after the nation planned to impose a 10 percent consumption tax on online retailers for goods shipped to Australia.

SEATTLE (AP) — The Catholic church is refusing to cooperate with a Washington state investigation into whether it unlawfully used charitable trust funds to cover up sexual abuse by priests, Attorney General Bob Ferguson said Thursday, asking a court to force the Seattle Archdiocese to turn over decades of records.

The archdiocese called the allegations a surprise, saying in a statement that it welcomed the investigation and has been collaborating since receiving a subpoena last July. The archdiocese shares the state's goals — “preventing abuse and helping victim survivors on their path to healing and peace," it said.

“We have a good understanding of the content of our files and we have no concern about sharing them with the Attorney General lawfully and fairly,” the statement said.

Ferguson, a Catholic himself, told a news conference that the archdiocese has refused to provide even a single document that had not already been made public, claiming an exemption as a religious institution. The archdiocese disputed that as well, saying it offered this week to provide private deposition documents, but that the attorney general's office said it wasn't interested.

Ferguson said the archdiocese ignored a second subpoena issued this spring seeking records on how the church handled allegations of sex abuse, including financial records related to how it may have spent charitable trust money moving priests from parish to parish after they were accused of sex abuse.

“The church has more information than it has shared with the public,” Ferguson said. “We believe the public is entitled to see those records."

Some 23 states have conducted investigations of the Catholic church, and so far at least nine have issued reports detailing their findings. In some cases, those findings have gone far beyond what church officials had voluntarily disclosed.

For example, the six Catholic dioceses in Illinois had reported publicly that there had been 103 clerics and religious brothers credibly accused of child sex abuse. But in a scathing report last year, the Illinois attorney general's office said it had uncovered detailed information on 451 who had sexually abused at least 1,997 children.

Similarly, Maryland last year reported staggering evidence of just how widespread the abuse was: More than 150 Catholic priests and others associated with the Archdiocese of Baltimore sexually abused over 600 children and often escaped accountability. In 2018, a Pennsylvania grand jury found that more than 300 Catholic clerics had abused more than 1,000 children in that state over the prior 70 years.

The Seattle Archdiocese has published a list of 83 clerics it says were credibly accused, and it says that beginning in the 1980s it was one of the first in the nation to begin adopting policies to address and prevent sexual abuse by priests. Sexual abuse by church personnel peaked in 1975, and there have been no reports since 2007, the archdiocese said.

But despite decades of lawsuits by survivors of clerical sex abuse, the extent of the scandal in Washington state remains unknown, Ferguson said, because the church has not released its files or explained why it found allegations against other priests less than credible.

Accusers, who have long demanded that the church open its books, welcomed Ferguson's announcement and said they regretted its necessity. Transparency is essential for the church to heal, said Terry Carroll, a member of the steering committee at Heal Our Church, a Catholic church reform organization in Washington.

“We call on the church and its legal representatives to cooperate fully with the investigation by granting full access to all relevant records, including internal chancellery memos, attorneys correspondence and financial information,” Carroll said during the news conference Thursday. "Church members and survivors deserve no less.”

Ferguson's investigation is civil, not criminal, and focuses on the three dioceses in Washington — Seattle, Spokane and Yakima. He said the Spokane and Yakima dioceses have refused to provide documents, but the attorney general's office is not yet seeking court orders to force them to comply.

FILE - Washington Attorney General Bob Ferguson is seen, April 27, 2023, at the University of Washington's Hans Rosling Center for Population Health in Seattle. The Catholic church is refusing to cooperate with a Washington state investigation into whether it unlawfully used charitable trust funds to cover up sexual abuse by priests, Attorney General Ferguson said Thursday, May 9, 2024, and he asked a court to force the Seattle Archdiocese to turn over decades of records. (AP Photo/Lindsey Wasson, File)