Spokane Journal of Business



The Journal's View: Head tax controversy is opportunity for Spokane


Seattle’s new head tax has been greeted by business with sharp criticism in some cases and begrudging acceptance in others. For Spokane economic development leaders, now is an opportune time to send the message to West Side companies: Come on over. 

The Inland Northwest is an ideal landing spot for West Side companies looking to expand their operations and finding that difficult to do in the Interstate 5 corridor. Many of the reasons for our attractiveness are time tested: lower cost of living for employees, lower cost of space in which to do business, and a strong labor pool supported by breadth and depth in higher education offerings. 

Now, add to the list the fact that Spokane doesn’t have the same head tax.

With the head tax, the city of Seattle will charge $275 per employee annually to companies with gross revenues exceeding $20 million a year, starting in 2019. The tax is intended to help Seattle address its homelessness issue. 

In a well-documented string of events, the Seattle City Council first proposed a $500-per-employee tax, prompting Amazon.com Inc. to halt construction of an office tower. The council lowered the tax as a compromise with the city’s mayor. Since then, Amazon reportedly has resumed construction on the tower project.

In the wake of the decision, one Starbucks Inc. executive questioned whether the city can effectively address homelessness while he also criticized its overall financial efficiency. Now, West Side business groups are working on a referendum to undo the tax. Earlier this month, the Puget Sound Business Journal ran a story with the headline “Seattle Divided” that talked about the fissure that has formed between city government and the business community.

That dynamic could be a cautionary tale for the Spokane City Council, which we’ve argued has turned a deaf ear to business concerns at times in the past. In fairness, though, the city and some nonprofits here have been proactive in addressing homelessness, as well as streets and other basic services. If Spokane stays on its current path, it’s unlikely to paint itself into a corner like Seattle appears to have done.

We don’t mean to come across as exhibiting schadenfreude over the disputes between government and business on the West Side. Certainly, a business exodus out of Washington state of any scale stands to affect the state as a whole, which is all the more reason to position the Spokane area as an ideal landing spot: less expensive and only an hour’s flight away.

Some West Side companies have had success expanding into Spokane. Rover.com, a Seattle-based company that has created an online marketplace for pet-care services, has become an ideal recent example, having opened an office in downtown Spokane last year and reporting that it could have as many as 100 employees here in the near future. 

We, as a business community, could use more success stories like that.