The Seattle City Council approved legislation Monday designed to provide better controls and greater transparency for the millions of dollars expected to be raised by the city’s new payroll tax on its largest companies.

The creation of the new JumpStart Fund will ensure “accountability and transparency in the budget for the use of revenues raised from the payroll tax,” according to a press release from councilmember and budget chair Teresa Mosqueda.

“Legislation isn’t finished when we take votes; it’s important to the broad coalition of housing advocates, labor unions, small and large businesses, equity-based organizations, food security advocates, immigrant and refugee organizations, and more, that we fulfill our commitment to prioritize JumpStart investments equitably and in line with the spending plan,” Mosqueda said in the release.

“Good governance dictates the accountability and transparency this budget legislation provides and I look forward to following this legislation with the creation of the JumpStart Seattle oversight board, enhancing trust with members of the public.”

Last summer, Mosqueda and the council passed legislation creating the new $200M+ payroll tax. Beginning January 1st, Seattle companies with payrolls $7 million and up began paying a tax on payroll to employees making more than $150,000 per year. The tax rate ranges from 0.7% to 2.4% with tiers for various payroll and salary amounts. It is expected to generate more than $200 million a year for for a city facing a massive COVID-19 crisis-ripped hole in its budget forecasts and in desperate need of revenue for hoped expansion of housing, business assistance, and community spending. Late amendments approved include an expanded 20-year sunset clause that puts the tax in place for two decades.

The JumpStart spending plan calls for funding to supporting maintaining many city services through impacts of the COVID-19 crisis, pandemic relief for community organizations and small businesses, plus millions in affordable housing investments.

The new legislation passed Monday is intended to help keep the JumpStart funds on plan by directing the deposit of payroll expense tax revenues into the JumpStart Fund and requiring that fund to be used to address only the JumpStart spending plan. “In addition, in the event that General Fund revenues in 2022 do not fully recover from the pandemic, it allows flexibility for the Executive to reallocate a limited portion of payroll tax revenues to support the continuity of staffing and services that were in place prior to the pandemic,” Mosqueda’s office says.

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