No Seattle budget season would be complete without the Mayor forcing Council Member Teresa Mosqueda to defend revenue the council won for affordable housing.
In his proposed 2024 budget, Mayor Bruce Harrell spent $71 million from “JumpStart,” the City’s payroll expense tax on big business, to balance the general fund rather than to support affordable housing, Green New Deal initiatives, and economic development, as the council specifically directed in statute to prevent it from becoming a slush fund.
For the most part, Harrell’s use of the tax follows the letter of the law, but he’s asking for even more money from the precious pot to pay for stuff the council supports, forcing them to choose between the sanctity of the JumpStart spending plan and important programs. The Mayor's proposal aligns with an intense anti-tax campaign from big business and its thralls, giving cover to conservatives who'd rather fill deficits with money reserved for making a dent in the housing affordability crisis and impending climate catastrophe instead of bumping up a tax on wealthy corporations.
Stick With Me in These Weeds, Please
To understand what the Mayor is up to here, you need to understand a few exceptions the council made to rules about spending JumpStart money on stuff that isn't affordable housing, Green New Deal initiatives, and economic development programs.
The council said the Mayor could transfer up to $84 million from JumpStart to the general fund, which is a pot of money composed of basically every other tax the City levies, to cover programs the council approved in 2023 or endorsed for 2024 that rely on general fund dollars.
Instead of taking $84 million from JumpStart, the Mayor only took $73 million to balance the general fund. However, according to central staff’s most recent calculations, he should have only transferred $56 million from JumpStart to the general fund, which saw a surplus. That way, more JumpStart dollars could have gone to the tax’s specific priorities. On top of that, Harrell cut $8.2 million from affordable housing and economic revitalization programs that the council used JumpStart funds to cover in their endorsed budget. Central staff called the $8.2 million cut "unnecessary" for balancing the budget last week. With a new forecast showing higher revenue for JumpStart and the general fund, the cut looks even sillier.
The council gave the executive even more wiggle room when they allowed for the 5% of JumpStart revenue earmarked for administrative costs to pay for specific “flexible uses.” Those uses include Sound Transit 3 outreach and planning, eviction legal defense, food services usually covered by the soda tax, and mental health services in schools, as demanded by Seattle students after the shooting at Ingraham High School last year.
Harrell funded the approved flexible uses, but he’s asking the council for a few more allowances. His budget proposal uses JumpStart to pay for a staffer to process applications for tenant relocation assistance, the start-up costs for the social housing developer that voters approved in February, a bonus for child care workers, and cost-of-living adjustments for human services workers.
The Future of the Fund
Harrell’s proposal puts the council in the shitty position of having to choose between preserving JumpStart spending norms and funding important programs, a Mayoral political move that’s starting to become routine.
So, central staff asked the council, “Is it time to consider expanding the areas of spending in the JumpStart fund that can be used on a permanent basis?”
Mosqueda certainly does not want to see JumpStart permanently used to balance the general fund. She seems confident that the Council can rework the budget to fund Harrell’s extra expenses in the general fund without issue. Then, the council could pass new revenue to take care of the deficit, expand services, and use JumpStart dollars as God Mosqueda intended! Based on the most recent revenue forecast released Tuesday, the council may have an even easier time reworking the budget to keep JumpStart intact and avoid cutting Harrell's unauthorized line items.
But Council Members Debra Juarez and Sara Nelson found the permanent bastardization of JumpStart ripe for discussion in a meeting last week.
Corporate Queen Sets the Tone for the Conservatives
For her part, Nelson tried to push the conversation to the right by suggesting another way for the Mayor to tap JumpStart money. In addition to the two exceptions I mentioned earlier, the Seattle Municipal Code also allows the City to use JumpStart money to fill the deficit when analysts project general fund revenues to be lower than $1.5 billion. Nelson proposed tying that threshold to inflation, as Harrell had proposed last year.
Central staff noted that the City brought in $1.68 billion in revenue this year, so Nelson’s proposal was “moot.”
But Nelson invited us all to imagine a world where Harrell’s desire to tie the threshold to inflation passed. In that world, the threshold would sit just below $1.79 billion, which would have allowed the Mayor this year to tap into (very roughly) $100 million in JumpStart revenue to balance his general fund, potentially wiping out a third of the pot for his own purposes. And wouldn’t that have been cool?
Big business would certainly think so, since it would have given the council more money to balance their budget without hiking up taxes on the rich.
Earlier this year, the Seattle Metropolitan Chamber of Commerce, the Downtown Seattle Association, and the Commercial Real Estate Development Association called for a three-year pause on JumpStart, which would amount to hundreds of millions in lost revenue for the City. Some speculated the Chamber and its buddies made the extreme demand to stake out a bargaining position, so their real goal would look like a compromise and thus a win for progressives if you don’t think about it. From the Chamber’s behavior on the City’s Progressive Revenue Stabilization Work Group, it seemed to some that the Chamber really just wanted to use JumpStart to balance the budget indefinitely.
What better way for the Mayor to force that choice than to use JumpStart inappropriately to fund objectively good things? Goodspeed, Mosqueda, and may another progressive revenue champion carry your torch on council.