The Seattle City Council is set to approve a new “investment agenda” for the $290 million JumpStart payroll tax that will create new opportunities for the city’s small businesses and help launch new initiatives like The Liberty Project, a new initiative focused on Black-owned businesses and businesses owned by underrepresented communities in the city.
CORRECTION: The agenda is for application of the 15% of the JumpStart revenues earmarked for “small business” expenditures.
Wednesday, the council’s Economic Development Committee will get a briefing from the Office Economic Development about the stakeholder process to create an “investment agenda to prioritize the use of these funds.”
The city says the “Future of the Seattle Economy” framework (PDF) was created with “stakeholder partners from over 80 organizations and government offices, as well as community leaders from a range of racial, ethnic and immigrant identities, neighborhoods, and sectors to create the FSE investment agenda, comprised of immediate investment recommendations and longer-term big bets.”
The council passed legislation creating the new payroll tax in the summer of 2022. Seattle companies with payrolls $7 million and up now pay 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 and was created with hopes of patching the massive COVID-19 crisis-ripped hole in Seattle’s budget forecasts. Late amendments approved include an expanded 20-year sunset clause that puts the tax in place for two decades.
The JumpStart spending plan originally called 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 but that focus has been under pressure as the city’s wider budget picture continues to be weakened by economic challenges.
The new guidelines for spending could help. Included in the framework are priorities including resources for small businesses, investments in neighborhood business districts, and resources to address “wealth building” in BIPOC communities including small business ownership and real estate assistance.
Initiatives like the launch of The Liberty Project will also be boosted. The city says the program offers “a wide array of services, including business consulting and strategy services, finance and accounting services (including loan application assistance), marketing services, technology services (such as website development and equipment assessments/upgrades), and contract bid preparation.”
It also offers “limited legal support.”
The Liberty Project goal is to annually serve a minimum of 30 Black-owned businesses from the retail, personal services, commercial construction, food and beverage manufacturing, restaurant, and power utilities contract industries. The industries were chosen “due to their high concentration of Black-owned businesses and significant market demand for their services,” the city says.
Approval by the council committee will send the plan to the full council to codify the agenda and help guide how future JumpStart revenue will be spent in support of the city’s small business communities. Forecasts predict the JumpStart tax revenue will rise above $310 million in 2024.
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