How Will Cutting the "Head Tax" Impact Transpo Funding? No One Really Knows.

By Erica C. Barnett June 24, 2009

[caption id="attachment_7849" align="alignleft" width="150" caption="Image by Flickr user freedryk."]Seattle pothole image by Flickr user freedryk.[/caption]

Mayor Greg Nickels—attempting to take away opponent business guy Joe Mallahan's marquee issue—has proposed getting rid of the so-called "head tax" charged to employers whose employees drive to work. The tax—$25 per employee per year—exempts any employees who don't drive to work alone.

The proposal, which Nickels supported, passed the council by a 5-4 vote in 2006. Currently, the tax brings in about $4.7 million for street improvements and sidewalks every year.

Nickels staffers scoff at the suggestion that they're hijacking Mallahan's issue and say they've been working on the repeal with council member Tim Burgess for months. However, council staffers couldn't say how much the repeal would cost or what projects, if any, would have to be cut to make up the difference. They do note that revenues from the commercial parking tax have been coming in higher than expected (because people are still parking their cars downtown), and that the city can save some money by putting off paying for some transportation projects.

However, skeptics point out that the additional commercial parking tax revenues have already been allocated, so that money isn't actually available, at least not for this year; and there's no way to know whether parking tax revenues will continue to go up, or for how long.
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