‘Our city budget would have been in the red’: Mosqueda touts early returns from JumpStart tax
Early revenue numbers were released for Seattle’s JumpStart big business tax, which is currently sitting $31 million above the most recent forecast.
The tax — sponsored by Councilmember Teresa Mosqueda — was approved by city council by a 7-2 margin in July 2020. At the time of its passage, it was estimated to raise roughly $200 million a year through a tax on corporations with payrolls over $7 million. Under JumpStart, qualifying businesses in Seattle are taxed 0.7% for every employee making over $150,000, and 1.4% for employees making over $500,000.
Mosqueda’s tax was preceded by a larger-scale proposal put forth by Councilmembers Kshama Sawant and Tammy Morales, which would have levied a 1.3% tax on the top 2% of Seattle businesses measured by payroll, while raising an estimated $500 million a year. Sawant and Morales ultimately threw their support behind Mosqueda’s JumpStart tax after failing to gain traction for their initial plan.
In the near term, JumpStart borrowed the city’s emergency and general funds, which were then directed toward spending on COVID-19 relief efforts, rental assistance, homeless shelters, grocery vouchers, and small business support.
It’s estimated that the tax initially raised $231 million from “taxpayers for their 2021 tax liabilities,” before beginning to collect from large corporations at the start of 2022. Mosqueda touted those early funds as an integral piece of Seattle’s COVID response over the last two years, particularly in early months where the city faced the prospect of a significant budget shortfall.
“But not for JumpStart, our city budget would have been in the red,” she said in a Monday press release. “Without JumpStart, Seattle would have faced an austerity budget during COVID. When we needed critical city services, and we would have been forced to scale back support and cut jobs.”
Moving forward, the plan is to distribute 62% of JumpStart funding toward affordable housing and home ownership programs, 15% to small business “recovery and resiliency,” 9% for Green New Deal policy investments, and another 9% for fighting displacement among BIPOC communities.
“JumpStart didn’t only invigorate our economic recovery during a global pandemic, it is jump starting and fundamentally enhancing the services that make communities and our local economy more stable and healthier for the long run,” Mosqueda said.