Seattle Mayor Bruce Harrell announced his planned 2025-26 budget, which includes $287 million from the Payroll Expense Tax to address a $250 million shortfall in the city’s general fund. The tax, also known as JumpStart, targets payrolls at the city’s largest companies, including tech giants like Amazon. JumpStart was passed to fund affordable housing, homeless services, economic development projects, and environmental goals. The recent proposal is the largest reallocation of JumpStart funds thus far, with the excess money being used to support essential services without tapping into the rainy-day fund or the city’s fiscal reserves.
Harrell’s budget plans include $287 million going to the general fund, $233 million to priority areas, and $43 million to a new Payroll Expense Tax reserve. The revenue from JumpStart will help protect programs that Seattle needs to revive parts of the city affected by COVID-19 shutdowns. Amazon’s decision to have employees return to the office five days a week has been praised by city leaders, as it will increase foot traffic in downtown Seattle. The mandate for the city’s employees to return to the office was also applauded by Amazon.
The city has been facing budget shortfalls, leading to potential layoffs and job eliminations. While there were suggestions to increase tax rates imposed by JumpStart to boost revenue, Harrell’s proposal aims to prevent deep cuts to the budget without raising taxes. The Seattle Metropolitan Chamber of Commerce and Downtown Seattle Association recommended suspending the JumpStart tax to increase competitiveness and attract new companies to the city. Chamber of Commerce President and CEO Rachel Smith praised Harrell’s budget plans for balancing the budget without raising taxes while making significant investments in housing and homeless services.
In his proposal, Harrell stated that the higher sum collected through JumpStart allows the city to maintain the spending levels initially forecast when the tax was enacted. The funds will be used to support housing, equitable development, climate action, economic development, and youth mental health and safety. The allocation of funds from JumpStart will help the city meet its obligations under the tax and allow for additional resources to be used where needed. The revenue generated by JumpStart will help support essential services and programs such as public safety, administration, education, human services, and arts and culture.
The decision to reallocate JumpStart funds and maintain essential services without tapping into reserves or risking the city’s credit rating has been praised by city leaders and business organizations. The budget proposal aims to revitalize parts of the city that have struggled post-COVID-19 and prevent layoffs without raising taxes. By using JumpStart revenue to address the budget shortfall, Seattle can continue to fund critical programs and support economic development initiatives in the city. Overall, Harrell’s budget plans have been met with approval from various stakeholders as a way to balance the budget while making investments in key areas like housing and public safety.
