Democratic socialist Katie Wilson took office as mayor of Seattle at the start of the year with big promises and lots of excitement.
“We have to do big new things,” she said in her inaugural address. “And I’m going to be calling on all the brilliance and creativity and dedication of our public-sector workers as we push the boundaries of what we can accomplish.” This reflects a vision for Seattle that centers government as the answer to the city’s problems and prospects.
On that front, she failed on her first self-established test. In January, Politico reported on her plan “to create 500 new shelter units — including tiny home villages, RVs and apartments — by the time of the first [FIFA World Cup] match at Lumen Field on June 15.”
In April, the mayor sounded optimistic. “Are we going to make 500 by the midpoint of the year? I don’t know. Are we going to get a heck of a lot closer than we would have without setting an ambitious goal and going for it? Absolutely so,” she said, according to the Seattle Times editorial board.
How’d that go?
“As you’ve probably guessed, the shot went wide of the net,” reported the Seattle Times in June. “As of [June 3], the city is overseeing the setup of 75 new shelter units at a site in Interbay, constructed by Pallet Shelter of Everett. Fifty will be open by the first game kickoff here June 15.”
It turns out governments are really bad at executing plans, no matter how good its intentions. But alongside her vision of government-as-the-answer has been Wilson’s tendency to vilify the very job creators who generate the tax revenue the city needs to pay for such a vision, let alone the basics of city services.
Most emblematic of this has been her war of words with the Seattle-based Starbucks. Soon after winning election in November of last year, she joined a barista strike and called for a boycott of the coffee drink company until it caved to union demands. “When workers’ rights are under attack, what do we do? Stand up, fight back,” she chanted.
In April, the company announced it would be investing $100 million and hire 2,000 employees — in Nashville. Hundreds of layoffs in Seattle followed, as did a damning op-ed by former Starbucks CEO Howard Schultz in The Wall Street Journal.
“Seattle’s mayor, Katie Wilson, has chosen to cast business as a foil rather than a partner,” he wrote. “Her socialist rhetoric vilifies employers, even while she continues to rely on them for revenue. She has encouraged residents who disagree with her policies to leave.”
To the latter point, Wilson drew backlash after opining favorably on Washington state’s new tax on millionaires and then being derisive of concerns that such a tax may drive many of the state’s high-income earners out-of-state. “I think the claims that millionaires are going to leave our state are super overblown,” she said. “And the ones that leave? Like, bye.”
“Like, bye” and her public spat with Starbucks have so far come to define Wilson’s relationship with business. She’s tried in recent weeks to walk that back, telling The New York Times in May that she regretted her calls for a boycott.
“Those comments were not productive in the sense that they caused more harm than good,” she told the Times, which noted that “she is learning on the job at a time when Seattle’s political mood and the broader economy may be misaligned, with job cuts and slower growth harming labor markets.”
That’s one way of putting it. Learning on the job when you’re a barista is one thing, but when you’re the mayor of Seattle, the mistakes can mean people’s jobs and a big city budget hole. The extent to which Wilson can course correct and better balance her progressive ideals with the practical need not to scare away business and investment remains to be seen.
She’s very much aware of this tension but has so far sought to defend the city’s litany of taxes, including the city’s payroll tax, dubbed the JumpStart tax, which she helped create during her time as an activist. The city approved the tax in 2020, ostensibly to fund various progressive priorities like affordable housing and green energy. Much of the hundreds of millions of dollars in annual revenue have since been siphoned off to help paper over the city’s general fund budget deficits.
While helping Seattle City Hall, its impacts on Seattle’s economy are basically what you’d expect, with the beneficiary being nearby cities like Bellevue. “The evidence since is clear: Seattle’s Jump Start Tax has jump-started Bellevue’s economy, not Seattle’s,” declared Jon Scholes of the Downtown Seattle Association.
In June, the Downtown Seattle Association released a damning report on the economic impact of the tax. “Since being implemented, downtown Seattle has lost around 30,000 jobs,” the report found. “The office vacancy rate increased to 32% in the downtown core. And more than $10 billion in office value has been lost.”
Meanwhile, Bellevue “has seen more jobs come to its core, lower office vacancy, and the stability of office building values.” Indeed, it’s a point everyone seems to know, including the mayor of Bellevue, who warned the state not to adopt a statewide payroll tax and to learn from what happened from Seattle’s payroll tax. Instead of being able to flee from Seattle to Bellevue, the mayor warned, employers would flee the whole state if a statewide payroll tax came down.
Wilson, for her part, is well-aware that Bellevue is in part an attractive place to do business because it doesn’t have all the taxes Seattle does. “I don’t think it’s good that it is less expensive to do business in Bellevue than in Seattle,” Wilson said when speaking about adjusting taxes like JumpStart in May. “We’re going to be taking that into consideration.”
There are at least some signs the city is getting the message. Following the publication of the Downtown Seattle Association’s report, Beto Yarce, the city’s economic development director, told KOMO News that, “We definitely need to start thinking better about how we really activate our economic development plan beyond the JumpStart and other progressive taxes that we’ve been implementing.”
All things considered, though, it seems like Wilson’s mayorship is off to a rocky and challenging start. From failed government plans to fostering a hostile business environment, Wilson will need to learn from these setbacks and challenges if she’s going to model progressive governance in the way she hopes.
Sal Rodriguez is opinion editor for the Southern California News Group and a senior fellow with the Pacific Research Institute. He is the author of “Dynamism or Decay? Getting City Hall Out of the Way,” published by the Pacific Research Institute.