The Seattle City Council is holding a special meeting Thursday afternoon to handle legislation to create an alternative to a new social housing tax for the February ballot.

Thursday, the council is expected to pass the bill from Councilmember Maritza Rivera representing the city’s northeast District 4 that would put a competing measure on the February ballot presenting voters with an alternative for funding the newly created Seattle Social Housing Developer.

The Let’s Build Social Housing ballot Initiative 137 would add a 5% tax on companies for every dollar over a million paid to a Seattle employee in annual compensation including salary, stock, and bonuses. It will appear on the ballot in the special election in February.

The House our Neighbors group behind the salary tax proposal says is would add up to around $50 million a year to fund the development authority and power its ability to borrow to build or acquire 2,000 units of housing over 10 years.

The Rivera alternative to be voted on by the full council Thursday to be included on the ballot for voters in February would amend the existing JumpStart payroll tax to provide $10 million annually to the Seattle Social Housing Developer in funding administered by the Seattle Office of Housing for five years with an option for extending the program.

Social housing advocates have blasted the move saying the proposal would slash funding to the newly formed Social Housing Developer while also limiting how that funding can be used in ways that would undermine the effort’s key tenets around expanding affordable housing to include a wider range of income levels. Under the Rivera proposal if approved by voters, JujmpStart funding would limit the Social Housing Developer to offering affordable housing to only the lowest income levels.

In February 2023, Initiative 135 to create a Seattle social housing developer won handily with 57% of voters approving the proposal. But the program came without funding components because of limitations imposed on the state’s initiative process. Meanwhile, Public Development Authorities do not have taxing authority in Washington.

The JumpStart tax on the payrolls of Seattle’s largest employers, meanwhile, was instituted to help power pandemic recovery but now one of the more flexible sources of major revenue available for city hall’s spending plans.

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” was listed atop the city’s Revenue Stabilization Workgroup’s so-called “short list” for possible alternative revenue sources to help Seattle overcome the deficit.

With approval Thursday, the competing JumpStart measure would join the proposed new payroll tax on the February ballot.

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