The legislation itself is in two parts: an ordinance implementing the tax, and a separate resolution setting direction for the spending plan and requiring a detailed implementation plan by December 2018. Each has proposed amendments in the queue.
First, the tax ordinance. So far, six amendments have been posted (amendment numbers are not sequential, suggesting others are still in the works or have been abandoned):
Amendment 1, offered by Herbold, does several things:
- it removes the payroll tax that under the current bill would replace the employee-hours tax in 2021. So the EHT would continue on.
- however, starting in 2024 it reduces the tax rate from $500 per full-time-employee annually to $180. It’s claimed that this would cover the long-term commitments in the spending plan: debt service on the 20 year bonds, operations and maintenance costs for new permanent supportive housing units to be built, and rental subsidies, but would eliminate funding for other programs in the original spending plan. This is, in effect, as close to a “sunset clause” as they can get for the tax while still allowing for the spending plan to leverage the city’s bonding authority and invest in much-needed long-term programs — though it could have gone further and included a full sunset at the conclusion of the 20 years of debt service for the bonds issued.
- it anticipates that in 2023 the Council will conduct a thorough evaluation of the impacts of the head tax in order to determine what the tax rate should be in 2024 and beyond.
Amendment 2, offered by Bagshaw, allows companies to switch back and forth between methods for calculating the employee-hours tax; the current bill allows for switching only once. The previous head tax allowed for multiple switches.
Amendment 5a, also offered by Bagshaw, provides exemptions to the head tax for:
- hospitals, as defined in state law;
- healthcare organizations that provide at least 25% of their services to clients covered by Medicare and Medicaid, as measured by the charges for those services. (call this the “Polyclinic Exemption”)