COMMENTARY: Music tax repeal begins city's economic recovery agenda

(Editor's note: The following article appears originally in Seattle City Council President Richard Conlin's newsletter "Making it Work.")

On Tuesday, May 26, the Seattle City Council voted 5 to 3 (Godden, McIver, Rasmussen voting no) to repeal the admissions tax on small music venues that employ live musicians. The legislation will encourage the employment of live musicians and hopefully encourage the opening of more live music venues.

The repeal had been proposed last fall as part of the ‘City of Music’ initiative, but the council postponed action due to concerns about the budget implications. Now that the full budget situation is known, the majority of the council was ready to move ahead with this legislation, recognizing that the estimated $300,000 annual reduction in revenues will not make a significant difference in Seattle’s $900 million general fund budget.

The repeal was originally proposed as part of a long-range economic development package for the music industry, and the Office of Film and Music projects that it will contribute to the opening of eight new music venues in the next several years. The sales and businesses taxes from these venues and the projected increase in the health of the music industry will likely significantly exceed the foregone revenue from repealing the tax.

As the recession became deeper, the council also saw this proposal as a great way to keep musicians at work – most local musicians have relatively modest incomes in good times, and if this tax break can keep them employed, that’s much better than having them face foreclosure and dependence on social services.

On May 26 the council also unanimously approved allocating $1.4 million in Federal Stimulus Community Development Block Grant funds for small business lending, another part of the Council’s Economic Recovery program. On May 13, the council unanimously approved allocating $5 million in federal Homelessness Prevention funds to provide temporary assistance to those at risk of losing their housing.

Together, these represent the first three actions in the council’s economic recovery plan to move into implementation.

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