It will be the JumpStart tax to the rescue for Mayor Bruce Harrell and the Seattle City Hall budget in 2025.
The Seattle mayor Tuesday unveiled his administration’s 2025-2026 budget plan including proposals to overcome a projected $250 million deficit by grabbing JumpStart revenue and slicing more than 150 jobs at City Hall.
The city’s projected budget will reach $8.3 billion under the plan.
The tax on the payrolls of Seattle’s largest employers was instituted to help power pandemic recovery with affordable housing and social services but is now one of the only flexible sources of major revenue available for the city’s spending plans.
Tuesday, Harrell justified the 2025-2026 JumpStart decision, saying the revenue from the tax has doubled over the last four years and that the city has leaned on the tax to support general spending “every year since it was introduced.”
“The proposals you hear about in this budget – and the deep, unacceptable cuts that we didn’t have to propose – are possible only because of this approach,” Harrell said.
Harrell’s proposed budget calls for JumpStart Payroll Expense Tax revenues of $287 million to be allocated to support the city’s General Fund to pay for the city’s core costs including the salaries of city and police employees, leaving a projected $233 million to what the mayor called “Payroll Expense Tax categories” including affordable housing and social services. The proposal would also carve out $43 million to create a new Payroll Expense Tax reserve “to add fiscal stability to the revenue source.”
The 2025 budget gap has been looming.
A review of the city’s spending showed the city is facing the same pressures as the rest of the nation when it comes to ballooning costs. A city audit reveled nearly 80% of Seattle’s $1.7 billion budget increase is due to inflation and soaring wages. New programs accounted for only 19% of the jump with the remaining two percent of spending being powered by one-time revenue injections like federal aid during the pandemic.
Seattle has seen continued cost increases with new agreement on higher wages for its workers and a new deal with 23% raises for its police officers.
Officials have been eyeing revenue from the city’s JumpStart tax on its largest employers as a potential source to patch part of the hole.
More than $200 million in JumpStart tax dollars were earmarked for affordable housing and human services in the city’s 2024 budget.
Last year, “Changes to JumpStart Payroll Expense Tax” were listed atop the city’s Revenue Stabilization Workgroup’s so-called “short list” for possible alternative revenue sources to help Seattle overcome its deficit.
As originally legislated, the payroll tax’s flexibility for being partitioned to contribute to the General Fund was intended to sunset next year so the revenue could be fully dedicated to the program’s affordable housing and social services funding goals.
Meanwhile, the city council is also looking to further lean on the funding with its alternative ballot measure that would utilize funds from the tax to pay for a new type of affordable housing development in the city. Critics say restrictions on JumpStart revenue that would eliminate the ability for the development of affordable housing across a wide spectrum of income levels would hobble the city’s nascent Social Housing Developer public authority.
Tuesday, a coalition of community and labor organizations criticized the mayor’s decision to lean on JumpStart and called on Seattle City Hall to develop sources of “new progressive revenue to help meet our city’s commitments as soon as possible.”
“Balancing the budget through cuts to vital city programs and services is not acceptable. Additionally, the Jumpstart Payroll Expense Tax provides crucial revenue for affordable housing, Green New Deal programs, Small Business Assistance, and the Equitable Development Initiative,” a statement from the group including the Transit Riders Union and the Seattle/King County Coalition on Homelessness. said. “The need for all these investments has grown significantly since the tax was first implemented, and the need for strong city infrastructure and resources is needed now more than ever. For these reasons, the City must create additional streams of revenue.”
Overall, the mayor’s proposed budget includes $8.3 billion in spending, including $1.9 billion in General Fund. Within the General Fund, the budget proposal includes $916 million for public safety services, $264 million for education and human services, $145 million in arts, culture and recreation, $91 million in utilities, transportation, and the environment, and $57 million in livable and inclusive communities,” Harrell’s office said.
Harrell’s office said the proposal also includes a $342 million investment to support affordable housing in 2025 and an additional $343 million in 2026, “the largest single investments in affordable housing in Seattle’s history, building on significant housing investments throughout his tenure as mayor.”
Around half of the planned job cuts are currently unfilled after a hiring freeze put in place this year in anticipation of the coming deficit.
You can review the full set of 2025-2026 budget proposal documents here.
Learn more about select proposed investments organized by category: Public Safety | Public Health | Housing and Homelessness | Thriving Communities
Additional investment highlights in the 2025-2026 budget proposal include:
- $3.2 million to keep 300 shelter beds open that were previously funded by one-time federal investments and otherwise would have closed.
- $1.9 million to add 23 new positions in the Community Assisted Response and Engagement (CARE) Department, expanding services citywide, seven days a week.
- $19.25 million for youth mental health and safety outcomes for Seattle students, advancing the investment strategy announced at the start of the 2024-2025 school year and building on the $12.5 million in ongoing youth investments through the Human Services Department.
- $7.4 million in small business supports, including activating vacant storefronts and supporting access to capital.
- $5.7 million to establish the Opioid Recovery & Care Access (ORCA) center, a post-overdose stabilization facility.
- $28 million for Equitable Development Initiative to prevent displacement and support property ownership and capacity building at community-based organizations.
- $1.2 million to more than double Automated School Zone Cameras at 19 school zones to address dangerous speeding and support student safety.
- $3.1 million to establish a Real Time Crime Center to leverage technology to triage and coordinate emergency responses and hire civilian staff to support sworn officers.
- $2.9 million to provide dedicated detox and inpatient treatment beds for substance use disorder.
- $2.7 million to add firefighter recruits and paramedic students to the Seattle Fire Department.
- $2.5 million to bring new art activations downtown, building on the success of the Downtown Mural Project.
- $2.3 million to expand service hours for the Unified Care Team focused on responding to areas most frequently repopulated with encampments to keep public spaces accessible and welcoming.
- $2 million to increase supportive services for survivors of commercial sexual exploitation on Aurora Avenue and citywide.
- $500K to abate and demolish dangerous vacant buildings, supporting legislation proposed by Mayor Harrell this year to reduce fires and other hazards.
- $350K for a supplemental environmental impact statement to support the One Seattle Plan and identify new housing opportunities in places that already have increased density like Regional Centers.
The Seattle City Council will now take up the proposal and begin weeks of debate and changes to the plan.
The council’s budget chair Dan Strauss supports the JumpStart reallocation and City Hall job cuts.
““As Budget Chair, I look forward to leading a transparent and collaborative process,” Strauss said. It’s crucial that we center both fiscal responsibility and prioritize the investments the people of our city depend on — improving public safety, creating affordable housing, and addressing homelessness. We can and we must do both.”
District 3 representative Joy Hollingsworth, meanwhile, encouraged her constituents to dig into the 2025 budget plan.
“As we enter a pivotal time in Seattle, District 3 is at the forefront of shaping our community’s future. With the city’s budget season upon us, there is no better time to get informed and engaged in the process,” Hollingsworth said. “From addressing housing affordability, resources, city services, transportation improvements, public safety, and economic development, the decisions made will have impacts on our community.”
You can reach the council member at [email protected].
HELP KEEP CHS PAYWALL-FREE
Subscribe to CHS to help us hire writers and photographers to cover the neighborhood. CHS is a pay what you can community news site with no required sign-in or paywall. To stay that way, we need you.
Become a subscriber to help us cover the neighborhood for as little as $5 a month.
Why not just increase taxes on the wealthy so they pay what they owe the public for also utilizing all of our city’s wonderful utilities, infrastructure, and transportation modes??? The poor has to foot the brunt of the 10% sales tax, and now you raid the funds for affordable housing to pay for the increased salaries of murderous antisocial cops?
Leave the Jumpstart Tax funds alone and balance the budget by making wealthy Seattleites PAY WHAT THEY OWE
Seattle has so much grift. I do not support increasing taxes because it will just enable more. If I honestly believed that the money collected from this would be used to benefit the entire city rather than the activist industry I would be for it. But as things have shown again and again this money is constantly funneled to programs and organizations which show no reliable history of ever accomplishing anything of substance with the enormous amount of money they are already given.
“…activist industry”. Is that your own framing or was it lifted from elsewhere? Do you have specifics in mind?
How about we cut out all of these groups that are draining the city government and just fund services that we can hold accountable?
Let’s raise more money, but with the intention of creating social services that are publicly run.
The money is not the problem, it is the lack of accountability.
Why shouldn’t the wealthy pay more when they benefit from avoiding so many taxes already, just by the nature of our tax code? What “grift” are taxes contributing to? Helping vulnerable people? If you’re referring to social services when you blabber out the words “activist industry” I will have to unfortunately inform you that, from personal experience, those jobs don’t pay anywhere near enough to consider them part of any “industry”. You sound delusional, for real.
Give examples that refute the fact that increasing taxes would increase the amount of funding that smart and educated people with good hearts (unlike yourself) could have access to in order to make the changes we as Seattleites would like to see, at city and state levels. I say increase taxes on the wealthy locally, in addition to implementing a state income tax, to support all public schools in order to prevent the concept of school closures due to budget shortfalls from even existing. Use the tax increases to massively fund public transit to remove the blight of cars from our streets to make them safer, cleaner, healthier, and more accessible to all residents. The wealthy are getting away like BANDITS in this state because they are tax cheats stealing from your public coffers.
These are called ‘Solutions’ Lori Lee. It’s what you offer after seeing empirical data that backs certain ideas over others. All you’ve suggested is that tax increases don’t work (even though they do) and then you just make vague hand-waving motions as evidence as to why no new taxes. “Programs” and “organizations” that do nothing supposedly…why don’t you get specific?
You ever seen this? It’s right along with your detailed evaluation. It is what it is as they say.
Nickel and Dimed
this person needs to be rate limited. The entire comment section on this blog has devolved into chHill’s screeds at everyone.
Start your own blog dude. this is just neighborhood news.
I couldn’t agree more.
you also presented ZERO DATA… just an fyi
Oh and of course…the tax increases would also fund public housing!! The thing being currently scuttled by Harrell and Hollingsworth by improperly re-allocating the funds to avoid said tax increases in what is actually an open grift…not that you were earnestly looking for one.
Also, federally, we remove the faircloth amendment limit on the current supply of public housing and fund it through, you guessed it, tax increases.
You have no solutions of worth.
“Seattle has so much grift. I do not support increasing taxes because it will just enable more.”
Says who? EVERYTHING Has oversight.
You are certainly revved up about imaginary things. Everything you said there is simply made up. Why?
I’m one of those poor. This is Seattle’s elected perversion of choice. Says so much about the myth of Seattle vs. the reality.
The top 10 percent of income earners pay 76 percent of taxes in this country. How much is enough?
What point does that prove? Of course the people with all the money pay the majority of tax as a function of gross money being taxed, but current tax rates for the 0.1% are barely over 33%, genius. And those rates are marginal. Do you know what the income tax rate was during the beginning of the great compression (1940s – 1970s) — the top marginal tax rate was over 90%!!!
What the hell are you complaining about with this fake argument? You and all your landlord buddies need to pay up for what you owe the public. Sell some extra properties if you need some cash to pay the tax bill and then cry me a river in your mansion.
You mean income tax, not total tax. As high income earners earn nearly all of the income, yes, you they also pay nearly all the income tax. Is that surprising? The bottom 50% of income earners only earn 3% of the total US income, so of course low income people will pay lower percent of taxes, because their income is lower. That problem is that the majority of people earn low incomes, not that they pay low income tax…
And as a percentage of income, low income people often pay overall as high or higher total tax rates. That is because they also pay property, sales, and other taxes. And, with lower incomes, of course these taxes are a larger share of their income.
So, how much is enough for low income earners?
And what about the ultra high income earners. The Forbes 400 paid an average income tax rate of 8.2 percent…
I’d be fine with higher federal taxes. Local taxes are high enough and do not have a solid record of being spent well. If we were actually investing in new government expertise and capacity at the local level, maybe, but as of now it’ll just be flushed down the nonprofit/consultant/etc toilet with nothing to show for it.
Well that’s not the “tax’s” fault that the money generated by it could be wasted or improperly allocated. I hate the concept of wasteful private consultancies draining public funds and not providing good solutions as much as the next taxpayer, but that is frankly an obscure boogeyman that often gets used to disincentivize increased spending on projects that serve the public good. Wealthy Seattleites are doing perfectly fine, and why they would think local tax increases wouldn’t work here but work in places like Springfield, Ohio, where the massive influx of legal migrants has reinvigorated the dying town by practically doubling the tax base. The same effect can be had by increasing taxes on those that have the ability to pay…aka the wealthy.
I think the issue will continue to be an overall lack of tax base from which to draw the funds for bigger projects that make us all proud to live here and feel fortunate and thus happier. Federal money should be used as well, and not wasted like the current Biden federal dollars are set to be, since they dry up in 2 years which is unfortunately before some major additions to our rail and bus transport infrastructure are set to break ground. It’s also hard to invest in new government expertise and capacity when Harrell is cutting jobs as a form of budget balancing. Bring in more money!
This is exactly correct.
This is how we got to this moment in time. The REAL reasons why. It’s powerful stuff. You can’t argue these facts in the documentary. You can bet your life that the folks who are so alarmist so it hides the true motivation. All for them, none for the rest. Why? The have nots are not worth what we pay them already. Minimum wage will devastate the economy et ilk. When in fact power is in the hands of the wealthy.
There’s no obscure boogeyman here, our local tax dollars are currently being wasted by unaccountable nonprofits and consultants because we’re not funding government expertise and capacity. More money will not create that expertise and capacity at this time, it will just be funneled to more waste.
It’s pretty good news the budget is coming out balanced without major cuts. I heard many predictions over the last year that this budget was going to be a bloodbath…
I’ve supported some of the recent public safety legislation and want to highlight the following public health approaches that are getting funded:
$3.2 million to keep 300 shelter beds open$1.9 million to add 23 new positions in the CARE Department$19.25 million for youth mental health and safety outcomes for Seattle students$5.7 million to establish a post-overdose stabilization facility.$28 million for Equitable Development Initiative to prevent displacement$2.9 million to dedicated detox and inpatient treatment beds for substance use disorder$2 million to increase supportive services for survivors of commercial sexual exploitation
Ummm…you forgot the 200 million they cut for housing.
That’s the “pretty good news” for you isn’t it? You are against spending the money. But now you praise the money distribution?
Gimme a break with you fake concerns.
Yeah so exactly zero housing projects are canceled, but as usual your hostility is the main story of this comment
Ummmm…200 million worth just got cancelled.
I speak the hard truths. Others obviscate. Don’t address the obvious. If they had more money? We’d plan more housing.
I failed remedial math twice. True fact. But this is easy math. Even for me.
It was a bad faith reply and I responded in brief because I don’t want to interact with that poster.
The $200 million number is JumpStart’s unexpected windfall, not a sum that would entirely go to housing. No projects are canceled or delayed.
You’re right that this year we could have invested hundreds of millions of dollars in new funding to non-profit developers to do more building or buying. Let’s put that in context. The city is spending over $340 million each this year and the next two of years, whereas in 2019 we spent $70 million. A billion dollars from 2024-2026: big increase.
Still, I’m open to changes to this as the council goes through its budget process. I’m not endorsing every single line item.
I made a post highlighting public health investments I support and want to see more. Is it impossible to find common ground and is it always a five alarm fire with you guys?
Bad faith? Gimme a break
You made 200+ million disappear.
And so now you have high earners paying for schools through the Jump Start tax. Why are you still whining? Go get an income tax on the ballot if that’s what you need, but crying on the blogs does nothing.. unless your real goal is to simply argue online. STFU!
This makes me sick. We are getting stabbed in the back repeatedly. The city council is simply bought and paid for.