We're not Seattle, Pierce County leaders tell companies upset with head tax

The leaders of nine cities and the county government stood in the hot, dry air of a Puyallup data center to send a largely symbolic message to Seattle and beyond.

Consider Pierce County.

Earlier this month the Seattle City Council approved a $275 per employee tax on companies earning $20 million or more per year. The money would pay to alleviate homelessness to the tune of about $47 million per year.

To counter that, Pierce County governments are pledging a one-time benefit to companies who relocate here, valued at $275 per employee earning $65,000 or more as long, as those companies each provide at least five of those jobs.

The incentive would take different forms in different cities. Permit discounts or business-and-occupation tax credits, for instance.

DuPont Mayor Mike Courts said many of his city's 9,500 residents head north on Interstate 5 to go to work. In recent years, the corridor has become among the most congested in the nation.

If a business were to locate in DuPont, he said, its workers could commute by bike instead.

"Let them walk in the park at lunch. Let them coach their soccer teams in the evenings," Courts said. "The biggest thing we can do to solve congestion on the I-5 corridor is get off of it."

From the Centeris data center, fronted by several TV cameras, mayors said they want people living and working in their communities. They want to see a more equitable spread of high-paying jobs across the region, rather than having them all concentrated in Seattle.

This shouldn't be considered a hostile move on Seattle's interests, said Pierce County Executive Bruce Dammeier.

"We don't want to steal from Seattle," Dammeier said. "But if they are thinking about leaving the state of Washington, we want them to come to Pierce County."

Dammeier and others said they worry the perception of the region would change because of Seattle's vote, and that Pierce County, because of its proximity, will be discounted out of hand.

"We want to send a message that Pierce County is a very different place than Seattle," Dammeier said. "We have a very different approach to solving problems."

One of those problems has been affordable housing and the homelessness crisis. But even in Pierce County, communities cannot agree on how to tackle or pay for it.

Dammeier said bringing family-wage jobs here would help residents "upgrade their jobs" so they can have a better quality of life.

"We've got other discussions we need to work on ahead of us, and one of those is clearly housing affordability," he said.

Whether companies up north pay attention remains to be seen. Tacoma, the largest city in Pierce County, has offered much larger tax credits for over a decade.

Since 2001, the city says 2,833 new positions have qualified for a $500 job credit. Those jobs must pay about $41,100 per year, which Tacoma's municipal code says is a living wage. Companies can claim the tax credit for five years. Businesses can claim a second $250-per-job tax credit if the work involves international services and is located in a specific area of the city.

These two tax credits have cost the city about $250,000 per year, according to a memo to the City Council late last year. It's a small fraction of the city's annual take for business-and-occupation taxes, which total about $41.1 million.

In December the city added two more ways to reduce the business-and-occupation tax obligation: $500 more for hiring a Tacoma resident and another $250 if it's considered a "green job" according to federal standards. A business could claim $1,500 per worker if each requirement were met.

Mayor Victoria Woodards said Tuesday that Tacoma enjoys record growth in multi-family development and restaurant openings.

"Tacoma students are highly qualified and ready to go to work," Woodards said.

Many residents are being pushed out by Seattle's high cost of living. Already restaurants in Seattle are moving to Tacoma because rent is cheaper here.

Cities and the county will propose law changes in the coming weeks to provide the $275 incentive to companies that create these jobs, Dammeier said.

This story was originally published May 22, 2018 at 6:21 PM with the headline "We're not Seattle, Pierce County leaders tell companies upset with head tax."