City leaders are once again debating how best to spend Jumpstart revenues as they hash out the 2025 city budget and grapple with a projected deficit of at least $250 million next year.
Released in late September, Mayor Bruce Harrell’s proposed 2025 city budget seeks to use $287 million in Jumpstart dollars to shore up the general fund and pay for other policy priorities; dedicate another $43 million to a new reserve fund; and spend $233 million on the housing, climate, small business and community development programs the tax is meant to support.
The mayor’s office has framed it as a win-win proposal that allows the city to address its deficit and invest in Jumpstart priorities without resorting to far deeper cuts to city programs and services. But a coalition of housing and service providers, labor leaders and advocates argue it’s a mistake to move money away from its intended programs while the need for progress on affordable housing and climate is so acute.
With the Jumpstart payroll expense tax playing such a central role in the 2025 budget process and the possibility the mayor and Council could pass legislation altering in perpetuity how it’s used, it’s a good time look back at how and why its revenues have been spent the way they have over its first three years.
The brief history of Jumpstart
Jumpstart was created by the City Council in 2020. The tax was initially proposed as a way to provide immediate economic relief from pandemic fallout, and to support housing, small businesses, climate projects and community development in the longer term.
It levied a tax of 0.7%-2.4% on businesses with annual payrolls of at least $7 million and employees earning at least $150,000. The tax, pegged to the Consumer Price Index, now applies to companies with payrolls of at least $8.8 million and salaries of at least $189,371.
After surviving legal challenges from the Seattle Metropolitan Chamber of Commerce, the Jumpstart tax took effect in 2021.
That same year, the City Council passed another piece of legislation to create the Jumpstart spend plan, which set the categories and percentages for how the revenues could be spent. The legislation dedicated 62% to affordable housing, 15% to economic development, 9% for Green New Deal climate projects, 9% for the Equitable Development Initiative and 5% for administrative costs.
In 2024, the Council increased the Jumpstart tax rate to raise money for youth mental health services in Seattle Public Schools.
Seattle Mayor Bruce Harrell announces his 2025-2026 budget proposal at City Hall on Sept. 24, 2024. (David Ryder for Cascade PBS)
In 2020, the tax raised significantly more than projected. In 2022, it was projected to bring in $219M, and ultimately raised $255M. In 2023, it was projected to raise $223M and brought in $315M. The 2020 projection for 2024 Jumpstart revenues was $227M, but it is now expected to raise more than $404M by year’s end.
Because of that, the Council has passed legislation every year to use some Jumpstart revenues to balance the budget.
How Jumpstart has been spent
With the tax far outraising its initial projections, it has been a boon to city efforts on housing, economic development and climate and an essential backstop against big cuts to the city budget each year.
That impact can clearly be seen in Seattle’s investment in affordable-housing construction and operations. In 2021, the city spent $84.5M for new affordable housing, the majority of which came from the Seattle Housing Levy property tax. In 2022, that investment jumped to $208.4M, thanks to the inclusion of Jumpstart dollars. In 2024, thanks to Jumpstart and a voter-approved increase in the housing levy, the city invested $339.3M in affordable housing.
A report from the City Council’s policy analysts delivered in May of this year breaks down all of the city’s Jumpstart investments to date.
In 2024, the city used $85M to balance the budget, $141M for affordable housing, $34M for economic revitalization, $20.3M for climate programs and $20M for community-led development through the Equitable Development Initiative.
Of that $141M for affordable housing and services, $116M was used for affordable rental housing production, $17.6M was used to help community organizations purchase land for housing development and $6.7M was invested in affordable homeownership programs. Another $455,000 was used to support organizations that provide free legal services for low-income residents facing eviction.
The $34M the city invested in economic revitalization in 2024 was spread across 12 city departments and several dozen programs. They include everything from investments in Harrell’s Downtown Activation Plan and money for “activating” City Hall Park to jobs programs for youth experiencing homelessness, implementation of the app-based worker deactivation rights law and staffing of a program to help low-income residents access financial assistance and discount programs.
In 2024, the city divided its $20.3M in Green New Deal investments among the Office of Sustainability and Environment, the Office of Housing and the Department of Finance and Administrative Services. It helped fund rebates for homeowners converting from oil heat to electric heat pumps; implementation of the Building Emissions Performance Standard program; green jobs programs; Indigenous-led sustainability projects; a new urban forestry staff position and more.
The $20M for the Equitable Development Initiative is being used to help grassroots organizations pay for community-led developments including affordable housing, health clinics, child care and education facilities, arts and culture spaces and more.
The debate over its future
For 2025, Harrell has proposed using $287M in Jumpstart revenue to balance the budget; $43M to create a reserve fund for Jumpstart; about $144.5M for affordable housing; $35M for economic revitalization; $21M for Green New Deal projects; $21M for the Economic Development Initiative, $19.5M for youth mental health and $11M for administrative costs.
The mayor is also proposing legislation that would allow ongoing use of Jumpstart funds above the 2020 projected revenues to bolster the general fund, rather than the current year-by-year allowance.
At a Sept. 24 briefing about the mayor’s budget proposal, interim City Budget Office Director Dan Eder framed their proposal as a choice between making deep cuts to city services and redirecting Jumpstart funds into the general fund. He said that while preparing the budget, they explored the possibility of making a 14% cut to all city departments in the general fund. They also explored making a 30% cut to all departments except those with public-safety functions.
“Both would have been devastating to public-facing services that people rely on,” said Eder at the September briefing.
Council budget chair Dan Strauss, who co-sponsored the legislation to create Jumpstart, told Cascade PBS that he thinks the mayor’s proposal is consistent with how the tax has been used to shore up the budget every year since its creation. But he said he will be taking a closer look at the mayor’s legislation to permanently modify Jumpstart spending to make sure the original four spending categories remain a priority.
“Here we are four years out from passing the original legislation. It’s time to take a review and map the future,” said Strauss. “We have to make sure we’re maintaining the promises originally made and look at the realities that have changed since that original passage.”
A coalition of 35 housing and service providers, labor groups and community advocates has come out against the redirection of Jumpstart, arguing instead that the city should pass new progressive taxes or increase the Jumpstart tax rate so it can balance the budget and continue investing fully in Jumpstart priorities.
“I would hope to see a longer-term plan where we recognize that the Jumpstart tax and all of its revenue is meant to address profound systemic issues the city has failed to address for a long, long time, including affordable housing, the climate crisis, the displacement crisis,” said Katie Wilson, general secretary of the Transit Riders Union, one of the coalition members.
The coalition argues that the need for investments in housing and community development especially have grown in recent years. Wilson points to the staffing shortages, rising construction costs, unpaid rent and other issues affordable-housing providers are grappling with.
“If you’re going to broaden out what you’re spending Jumpstart money on, it feels like very much the wrong time to be de-emphasizing affordable housing,” said Wilson. “One could imagine repurposing some of the quote-unquote extra Jumpstart funding to really bolster skilled staffing and operations at permanent supportive housing projects.”
Speaking for herself and not the coalition, Wilson said she recognizes the need for using Jumpstart funds in the short term to avoid far deeper cuts to city services, but takes issue with the mayor’s longer-term plan. For one, the city is using the 2020 projections for Jumpstart to decide what constitutes “excess” revenues that can be used for purposes other than the Jumpstart spend plan. The 2020 projections estimated a 2.5% rate of inflation, which is lower than reality.
“Capping it at arbitrary amount is not taking seriously what this money is supposed to do,” said Wilson.
The coalition has an ally in Councilmember Tammy Morales, who has expressed concern with repurposing Jumpstart, calling instead for the city to pass new taxes.
“What I am taking away from this proposal [from the mayor] is a tacit acknowledgment that we need more revenue to fund basic city services, especially as a growing city,” said Morales at a Sept. 25 budget hearing.
But it’s unlikely new taxes are coming from the City Council any time soon. Some Councilmembers have expressed concerns about the specifics of what Harrell has proposed – for example, Councilmember Cathy Moore has concerns about using $43 million of Jumpstart for a new reserve fund while the need for affordable housing is so great. The majority of Councilmembers have opposed the idea of imposing any new taxes.
