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VIEWPOINT 1
<br /> 44 1 i'IGETsc�i'\ItlilslNF.tis.ult'RS.41, IAV'.ui.lI\f; 2 ',
<br /> Editorial 4r— �.tw � -. .�'�
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<br /> Seattle needs to lake responsibility for a
<br /> its square:footage lax mess5 N A.--'1-,,,,,t,---
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<br /> That distant crackling noise heard in Seattle as
<br /> April drew to a close was the sound of pencils break- I. I VE
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<br /> ing in carry offices all over town. - " f
<br /> We're kidding,of course,but most business man-
<br /> agers probably felt like breaking their pencils while SE ARG� n r..—
<br /> ........._•plestruggling
<br /> anile conto voluted ted inke structioof ns for paying the Kp{Z�le's dense,corn- R�'M�4 g J
<br /> city's new square-footage tax. _ -
<br /> Incredibly,Seattle seems to have succeeded in
<br /> generating more frustration over its tax instructions '—" 7 r 4'� I jrpnr,,,
<br /> than over the tax itself.Compounding the prob- x Rq fyR
<br /> tem, the office of Seattle Mayor Greg Nickels /'-,..—•— ` ', AA-.,
<br /> tried to duck responsibility for the mess by blam-
<br /> ing it all on the state Legislature. J �- .
<br /> We hope the Nickels administration accepts re- ------=--� �—� �a- ' "
<br /> sponsibility for a problem of its own making and u
<br /> does everything it can to make it easier—much s'"'(, ' Q' '"'L-t. a.. i
<br /> easier—for Seattle's business taxpayers to com- -- ----------
<br /> ply with the city tax code.
<br /> Seattle cooked up the square-footage tax to
<br /> replace about$22 million that it expected to lose
<br /> from a business-and-occupation lax reform bill Tacoma's play for Russell holds larger lessons
<br /> that the state Legislature passed in 2003,with a
<br /> five-year phase-in period.
<br /> The city's new tax is expected to replace most aybe it's the snow-capped a new headquarters based on the state's
<br /> of the lost revenue by collecting about$18 mil- mountains and surrounding PUBLISHER'S commitment to provide sales-tax exemp-
<br /> lion a year. salt water that lead to-a sense NOTEBOOK tions on construction materials,equipment
<br /> At this point in an editorial it's customary for of self-satisfaction.Perhaps it's and labor.
<br /> us to offer supporting details about the subject at the cool Puget Sound mindset that recoils To be sure,from a national perspective,it
<br /> hand.But the mechanics of calculating Seattle's at the encroachment of newcomers.Or doesn't stand out quite so starkly.Even back
<br /> square-footage tax defy summation. maybe it's the populist streak pervading sit in the early 1990s,for instance,Alabama
<br /> Consider the provision that says compa- the Pacific Northwest. -: put a$253 million incentive package on the
<br /> flies selling services "from a Seattle business Whatever the cause, economic de- �"' table to lure Mercedes-Benz to place an
<br /> location(s)may take a credit equal to the square- velopment guru Angelos Angelou finds Emory auto plant in that state,which it did.Some
<br /> footage tax owed for the reporting period mul- this region's approach to corporate re- Thomas Jr. incentive packages have grown substan-
<br /> tiplied by the ratio of adjusted gross income cruitment remarkable in a certain way: Bally since then.
<br /> to total gross income generated by the Seattle "Economic development in your state Still,the Tacoma offer fur Russell Invest-
<br /> business location." is practiced differently than in other parts of the mens was strong."For the United States."says An-
<br /> It's no wonder that the city's tax division in country,"he says, choosing his words carefully. gelou,"it's one of the strongest in the country so far
<br /> late April fielded about 500 calls a day—more "it tends to be very localized and not leveraged this year."
<br /> than six times the usual volume—about the properly...it's timid...not aggressive." Now Tacoma simply waits ... waits to sec if the
<br /> square-footage tax. Angelos should know. His Texas-based firm long requited relationship between that flagship in-
<br /> Ron Boeing,director of state and local taxa- —AngelouEconomics—has done site selection vestment firm and the city's center and identity will
<br /> tion at the Seattle office of Deloitte Tax LLP, and economic development for clients ranging continue.
<br /> told Puget Sound Business Journal Staff Writer from Citgo to the Czech Republic to the state of But whatever the outcome,Tacoma's creation of
<br /> Deirdre Gregg: "I don't think anyone's ever New York. this package should have implications far beyond the
<br /> written a more complex,less intuitive taxing But among his most recent projects is Tacoma's city's boundaries.
<br /> statute." bid to keep Russell Investments in the city's down. It may well serve as a model for communities
<br /> The mayor's office promptly blamed the Leg- town core.The Economic Development Board for throughout this state—communities that can and
<br /> islature, with spokesman Alex Fryer saying, Tacoma-Pierce County put its offer on the table on should reach further than they have in the past to
<br /> "We see this as Olympias fault." March 31—a$282 million proposal that not only retain and recruit the kinds of businesses that both
<br /> Blaming the Legislature is disingenuous. reaches out directly to Russell but also lays out a improve opportunity and enhance quality of lite.
<br /> Olympia's B&O tax-reform package did not larger plan to continue transforming Tacoma. Among the ingredients:the enlistment of null-
<br /> force Seattle to generate new tax revenue in any "it's as strong as anything I've ever seen out of tiple parties with city,county,state,federal and other
<br /> particular way—or at all,for that matter.The Washington state," says Jeff Marcell, executive participants on the same team;aggressive action
<br /> square-footage tax is a scheme of the city's own vice president and chief operating officer of enter- and reaction (soon after Russell was put in play,the
<br /> making. priseSeattle. Economic Development Board's CEO Bruce Kendall
<br /> And it doesn't have to be that complicated. A small sampling of the items included in the and others fashioned a swift and weighty response);a
<br /> Just ask the city of Bellevue,which has a much deal,the core of which includes 8148 million in di- willingness to set aside timidity and think big.
<br /> simpler square-footage tax on the books. rest investments- "We have followed a style that we think can be du-
<br /> The Nickels administration needs to stop the —816.5 million of business-and-occupation tax plicated,"Angelou says."Economic development is
<br /> blame game and take responsibility for its own phaseout credits from the city of Tacoma. all about leveraging assets and going out and telling
<br /> actions.Then it needs to draft a square-footage —$15 million toward the construction of high- your story and being aggressive and not just waiting
<br /> tax that's either comprehensible—or gone. capacity parking facilities. for your phone to ring"
<br /> —$7.5 million in business-and-occupation tax
<br /> —GEORGEERIS credits from the state. EMORi'THOMAS.1R.,.,prbh,thrrofif:I'u,q.coxa:I's',',"
<br /> Firms —$33 million in lowered construction costs for )Dams[Rraeh Al Pt at rrhssa brzfournalf.(UIM
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