Seattle passed a "head tax" in May, charging local tech giant Amazon and other big companies to pay up for affordable housing — only to repeal it less than a month later after a backlash from the business community and a surprising shift in public opinion.
Now several Silicon Valley cities are wading into the same debate. Mountain View voters will decide in November on their own per-employee tax, charging Google and other companies to fund transportation projects. Cupertino and Sunnyvale also have considered charging similar taxes on their own tech titans, although they aren't expected to take action in the near future.
In Seattle, the issue spiraled from a single tax proposal to an acrimonious dispute over the tech industry's place in the city and the effectiveness of local government. The city's experience provides a cautionary tale that leaders in the Bay Area are trying to avoid.
"This was the first time the tech industry really flexed its political muscle" in Seattle, said Ethan Goodman, a local tech entrepreneur who grew up in the Bay Area and supported charging the companies to offset impacts they created. "There was a widespread sense within the business community of feeling like they were being made out to be a villain."
In some ways, Seattle and the Bay Area are on the same track, going through similar throes of tech-induced change. Even as the two West Coast metros have reaped the benefits of a wave of tech investment with big boosts in jobs, they've also experienced dramatic rises in housing costs, bumper-to-bumper traffic and homelessness.
Seattle's median house price grew 58 percent in the last three years, according to real estate firm Zillow — even more than the 55 percent jump in Mountain View over the same period.
Proponents of Mountain View's tax say they're working to avoid Seattle's mistakes and trying to engage the tech and business communities up front. The proposed tax is half the size of Seattle's: $143 per employee at Google and less for smaller businesses. The Mountain View City Council passed a nonbinding resolution saying 80 percent of the revenue would go to transportation projects, including road work, bike and pedestrian improvements and an automated tram connecting downtown with Google's neighborhood, and smaller amounts would go to building affordable housing. But the funding wouldn't be guaranteed for those purposes.
Mountain View put the tax directly on the ballot, unlike the Seattle council, which provoked anger by approving the tax without voter approval. And transportation is probably an easier sell than homelessness, said Mountain View Mayor Lenny Siegel, who's championed the tax.
"We are planning to spend the money on projects that directly benefit employers," Siegel said. "It's not like we're hostile to them. ... They need us, and we need them."
Google, which has more than 23,000 employees in Mountain View, has not yet taken a public position on the city's proposal.
It's not clear yet whether there'll be a well-funded campaign against Mountain View's tax. But several prominent business groups, including the Silicon Valley Leadership Group and the Bay Area Council, have spoken out in opposition to it.
"Cities have very legitimate concerns about traffic, but doing this on the backs of their employers is a mis-aimed missile," said Jim Wunderman, the council's president and CEO.
Opponents could turn to Seattle's anti-tax campaign for a playbook. Already, detractors of the Mountain View tax are framing it in the exact same language, calling it a "tax on jobs."
Seattle advocates said they'd encourage Bay Area cities pushing similar taxes to outline specific projects the revenue will fund, countering arguments that the money would be squandered. They also recommended that pro-tax activists and officials prepare for a hard-fought political battle.
(c) 2018 the Contra Costa Times. Distributed by Tribune Content Agency, LLC.
