(Image: Seattle City Council)

Seattle’s payroll tax on its largest employers is paying dividends.

City Council budget committee leader Teresa Mosqueda is touting better than expected revenue results for 2021, the first year Seattle companies with payrolls $7 million and up were taxed on pay to employees making more than $150,000 per year.

“JumpStart is a victory for everyone in Seattle. I’m thrilled that the progressive revenue raised by JumpStart is above revenue projections,” Mosqueda said in her announcement. “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.”

To date, the City has collected $231 million from the JumpStart tax from taxpayers for their 2021 tax liabilities, about $31 million above the most recent revenue forecast issued in November 2021. The revised 2021 Adopted Budget assumed JumpStart Seattle would generate $200 million of revenue in 2021. Tax payments are expected to continue to come in through the end of February.

The stronger than expected totals will be a boost. CHS reported here on 2022 budget planning that hinged on the new tax even as forecasts predicted lower than expected revenue due to increased work at home rates.

But the payoff on 2021’s launch of the new tax wasn’t dented by the pandemic. The tax rate ranges from 0.7% to 2.4% with tiers for various payroll and salary amounts. It is now generating more than $200 million a year for for a city facing massive COVID-19 crisis-ripped holes 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. Grocery businesses and independent contractors are exempt.

2022 brings the start of the JumpStart spending plan, Mosqueda said, “making historic investments in housing, as well as strengthening small businesses support, the Green New Deal and the Equitable Development Initiative.”

Meanwhile, 2021 left Seattle and the region with job growth that trailed the nation but primed, analysts said, to join the comeback. The city’s largest employers, meanwhile, include giants like Amazon, Microsoft, Expedia, and Starbucks that have weathered the pandemic with relative ease.

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