Jumpstart Seattle: how Amazon won the battle, then lost the war

Yesterday, the Seattle City council did something good: They passed a new payroll tax, effecting earners over 150,000, that will raise about 240 million dollars in revenue, which will be used for affordable housing development and COVID relief programs. The story of how we got here is a great one, and one that serves as a lesson on the limits of the power of money in politics.

A good starting point is just over two years ago: the city council, in order to address a growing and severe homelessness crisis and housing shortage, and with fairly limited options for new revenue streams (in Washington, Seattle and its metro area is often reduced to begging the state legislature for permission to tax itself; most traditional revenue streams are off limits without explicit authorization from Olympia), negotiates and settles on a “head tax” on large employers—$275 per employee per year for firms over a certain level of annual revenue. It’s pretty far from ideal tax policy in a variety of ways, and generated strong opposition from the usual suspects (Amazon, Starbucks, Grocery chains, Vulcan, the Chamber of Commerce) but also from some labor unions, fearing, perhaps not entirely unreasonably, that taxing jobs directly might lead to less of them, or at least less of them here. The total size of the tax was reduced in negotiation with a then-new mayor, who was (and is) more conservative than the council. The tax was projected to raise around 45-50 million dollars a year, a large portion of it (in part by design) of which would be paid by Amazon.

The business community’s response was swift and fierce. They began a signature gathering campaign for an initiative designed to repeal the tax, easily raising hundreds of thousands of dollars in a matter of days, with amazon the largest contributor. A strong media narrative that the Council had swung “too far” to the left for the city, as demonstrated by the election of Durkan as Mayor over the much-more-progressive Cary Moon (how progressives and the left screwed up that election is a much less happy story deserving of a post of its own) signaled a desire to move back to a center they were foolishly ignoring. That the council was overreaching and out of step quickly became conventional wisdom across local media outlets.

After just a few weeks, before the tax had gone into effect, the council president announced a sudden reversal: apparently spooked by some non-public polling, they determined a) the tax would be overturned with the initiative and b) they were dooming themselves by pursuing and defending an unpopular policy for no good reason, so they announced they’d be repealing the tax. Only the council’s lone socialist, Kshama Sawant, and recently elected AL CM Teresa Mosqueda (one of only two of the nine CMs whose seat wasn’t up in 2019), voted against the repeal. The head tax was dead, and Amazon had played a key roll in killing it. They hadn’t been all that involved in Seattle politics before, but this flex, which involved sums of money quite large for Seattle politics but mere pocket change for them, had been impressively effective.

This incident profoundly shaped the 2019 council elections and coverage of them. Seven of the nine seats—all seats representing specific districts—were up for re-election. (Seattle city council has seven district-representing members and two AL members, the former are on a different re-election cycle than the latter.) One long-serving progressive CM, Mike O’Brien, who’d put a lot of effort and energy into the head tax, determined he was simply too unpopular to win and announced he wouldn’t be running. In the end, only three of the seven CMs ran for re-election. The backlash narrative still dominated the discussion. Amazon, feeling their oats, had led the charge for more aggressive involvement of the business community and several shady, generic sounding PACs like “People for Seattle” and “Moms for Seattle” were spending the kind of money on these races that Seattle politics had never seen before.

These are non-partisan seats with a two-round election, top two from round one face off in the general. Two of the three CMs running for re-election were generally seen as pretty strong incumbents, and didn’t attract particularly strong opposition. The four open seats and the seat held by Kshama Sawant, a controversial figure and member of the Trotskyist Socialist Alternative party, saw considerable attention and many potentially viable candidates, leading to a chaotic and unpredictable first round election. The results didn’t really affirm the conservative backlash narrative, but didn’t definitely disconfirm it either. On the one hand, the candidates who came in first in D6 and D7 seemed like probably the leftmost of the viable candidates, although neither were running a particularly lefty campaign. Tammy Morales, a prominent left-progressive, who’d come within a few hundred votes of winning the diverse, poorer D2 seat in South Seattle in 2015, dominated in her district, getting a bare majority in a crowded field, and the fairly progressive (on most issues; don’t get me started on her housing and parking politics) incumbent in D1, Lisa Herbold, looked safe for reelection. But the best result for the conservative backlash narrative came in D3, where the incumbent Sawant was held to under 37% of the vote, generally a very bad sign for a non-partisan incumbent with extremely high name recognition. One of the recipients and beneficiaries of the big corporate spending campaign was Amazon/Chamber darling Egan Orion, who cleared 20% and defeated several other promising Sawant challengers to advance to round two.

The general election saw the spending by Amazon and Chamber-aligned PACs explode in volume, shattering records for expenditures in city council elections. Picking the right-most candidate in six of seven seats (incumbent Deborah Juarez in D5 drew an utterly deranged and obviously non-viable wingnut for round two, so she was endorsed by both the business community and the left), they spent money lavishly. Suddenly, the largely theoretical conservative backlash gave way to a new, actual backlash against this spending. Orion, Amazon and the chamber’s preferred candidate, who they helped emerge out of a crowded field, had a very thin resume and inability to speak about his plans and goals beyond bland clichés. By the end, lots of non-radicals and Sawant skeptics on the left (including the two AL council members, who had previously endorsed a different non-Sawant candidate who finished third in the first round) rallied behind her. She won by 4%, a stunning improvement on her first round totals, without doing a damn thing to attempt to broaden her appeal. Setting aside D5, where the amazon candidate and the left’s preferred candidate were one in the same, they went 1 for 6, winning only in D4. Their preferred candidate there, generic status-quo NIMBY Alex Petersen, eked out a narrow 4 point victory over a young Black DSA-affiliated organizer with limited experience and some unresolved tensions with labor, he’d been the campaign manager for a particularly obnoxious DSA left-Nimby candidate who had, rather pathetically, tried to attack labor from the left two years earlier. (Note: that candidate is Shaun Scott and he’s really, really great; if DSA candidates look more like him and less like the lame left-NIMBY union-basher he tried to get elected in 2017 going forward, I’ll be very happy.)

Amazon’s failure was spectacular and, save one seat, nearly complete. They arguably ended up helping their bete noire, Sawant, stayed on the council, angered and radicalized both AL CMs, and demonstrated to the political class that taxing amazon isn’t political poison at all.  Two of the beneficiaries of the backlash against the backlash were Andrew Lewis in D7 and Dan Strauss in D6. The Seattle left wasn’t particular excited about either, but didn’t really have a viable standard bearer in either of those races. They both presented as earnest young (early 30’s) white men with left-liberal but not particular radical or status quo threatening political ambitions. They took a kind of “nice young man with a back to basics, good governance, here’s some wonky details you might like” approach to their campaigns and seemed at least a little uncertain about their new, unsought and unexpected status as the candidates of the left.  

Yesterday both joined with the five more clearly progressives to give the Jumpstart Seattle payroll tax a veto-proof 7-2 victory. While the old head tax that motivated amazon to go to war would have raised around 50 million a year, this tax raises five times that. It’s also probably more politically resilient, as it adds a payroll tax only for those employees making over 150K a year. Unlike the head tax, it’s not flat, and as such eliminates the threat of a perverse incentive by taxing lower wage jobs at a higher rate. The latter is part of what motivated unions to sign with capital in 2018; this time labor appears to be in full support. One of the moderate, accidental leftists created by the politics of the 2019 election, Andrew Lewis, is planning to propose a city-wide capital gains tax as well.

My preferred narrow interpretation of the lessons of this story is that, in non-partisan two round elections without ranked choice and with a crowded field, a blitzkrieg of corporate money is a good way to get your support up to 15-20% and limp through to the second round, but becomes a real liability after that in jurisdictions, like Seattle, where being known as the big corporate money candidate is serious net-negative with the median voter. It also helps that the media, primed by the head tax drama of the previous year, was eager to make the sudden influx of PAC money a major story.