If this budget season has shown us anything, it's that Seattle City Council's anti-tax majority worships at the altar of their rich donors while working people pray for scraps. They’ve spent their time in office rejecting, limiting, or hoping for the eventual end of progressive taxation with the pompous, unspoken assertion that they are the fiscally responsible adults in the room. But they have no claim to intellectual superiority when yesterday they voted to siphon off $360 million from the JumpStart Payroll tax - using the City’s strongest progressive revenue stream -to backfill the General Fund. They also set a 2040 sunset date for that tax, and rejected new progressive revenue in the form of a capital gains tax, effectively endangering every program funded by the measure while setting the stage for further cuts in the years to come. 

But, as Head of Central Staff Ben Noble repeatedly emphasized in discussions about JumpStart, it only takes five votes to change these policies. And the tides are turning — the progressive bloc (if you can call it that)will gain another member with Council-elect Alexis Mercedes Rinck taking office in a matter of weeks and the conservative leader. Meanwhile, Council President Sara Nelson seems especially vulnerable to a challenger from her left. The Chamber of Commerce may have seen their last major victory for a while. 

Stop the Steal!

The Budget Committee spent the bulk of Tuesday’smeeting debating changes to the JumpStart Payroll Expense Tax. Ultimately, they passed Budget Chair Dan Strauss’s bill, which while framed as a means to align the Mayor’s maximalist vision with the original intent of JumpStart, did very little to actually safeguard the tax revenue. 

JumpStart imposes a small tax on the city’s largest businesses on their highest paid employees. The City Council passed the tax, supported by a broad coalition, in 2020. At the time, they set a specific spending plan to ensure the money went to issues the City had ignored year over year — 62% for affordable housing, 15% for economic development and revitalization, 9% for equitable development, 9% for Green New Deal initiatives, and 5% to administer the tax. 

However, year after year, the executive proposed using large chunks of the revenue from the overperforming tax to plug the general fund deficit or add new programming without raising new taxes. While that made sense in the wake of pandemc-era, economic ruin, the City Council vowed to end that flexibility in 2025 in order to redirect the revenue toward the worsening housing crisis, displacement, and impending climate catastrophe. No biggie. 

But Mayor Bruce Harrell had a different idea in his 2025-2026 budget proposal. Harrell, determined not to raise taxes on his wealthy donors, sucked more than $360 million from JumpStart to balance the general fund and add new programming. He and others claim this prevented “austerity budgeting” in the face of a budget shortfall, but defunding affordable housing by $200 million feels rather austere to me! 

Harrell also proposed legislation to amend the JumpStart spending plan, shifting from requiring specific allocations for affordable housing and other original priorities to encouraging such spending without specific percentage guidelines. Advocates, particularly from the affordable housing sector and environmental organizations, argued this made JumpStart a “slush fund” for the executive when the broad coalition of JumpStart supporters fought specifically for revenue to alleviate the housing and homelessness crisis, combat displacement, and pay for Green New Deal Initiatives. 

Strauss proposed an alternative JumpStart spend plan, but it did not aggressively challenge the Mayor’s bastardization of the revenue. He proposed retaining the original guidelines, but as a suggestion, not a legal obligation. In effect, the City could still rake up as much as they wanted from JumpStart to the General Fund. But, to be fair, no one ever respects the spend plan anyway. 

Council Members Tammy Morales and Cathy Moore both attempted to install stricter guardrails on the revenue. Morales proposed an amendment to Strauss’ JumpStart spend plan that would limit JumpStart’s general fund support to 20% of the tax’s yearly revenue, starting in 2027. It failed with Morales as the only affirmative vote and abstentions from Strauss and Council Member Joy Hollingsworth, who felt like she didn’t have enough time to review many of the amendments before voting. 

Moore proposed an amendment to Strauss's bill that would limit JumpStart’s general fund support to 45% and require the rest to go to affordable housing only, starting in 2027. Moore wanted the council to be “clear eyed” about the need to siphon JumpStart revenue to support General Fund programming, a popular sentiment among her colleagues, but she also wanted to protect affordable housing development, which is less popular apparently! It also failed with Moore as the only affirmative vote and abstentions from Strauss and Hollingsworth. Saka, Morales, Rivera, Kettle, Woo, and Nelson voted no. 

Strauss's other attempts to wean the council off JumpStart as their easy budget fix also failed.

Some of the more conservative council members, such as Council Member Maritza Rivera and Bob Kettle, turned up their noses at the idea of guardrails, arguing that it implied that they did not care about affordable housing and would not adequately fund it. Love to burst their bubble — the council is allowing a massive raid of affordable housing funding to pay for general fund programs, the largest chunk being the Seattle Police Department. They haven’t proven you can be trusted without guardrails! 

JumpStart, Not JumpStall!

Aside from the spending plan, the council had some other JumpStart rules to hash out. Morales proposed an amendment to reestablish the JumpStart Oversight Board. The Board has never actually convened, but Morales believes it would do important work to increase transparency, make sure dollars get spent properly, and collect data about the tax’s impacts. The amendment failed with Moore, Morales, and Strauss voting yes and Hollingsworth abstaining. Saka, Rivera, Kettle, Woo, and Nelson voted no. 

The only amendment that passed with Strauss's underlying legislation is the incredibly stupid and obvious virtue signal to big business to reestablish the tax’s 2040 sunset date. Strauss removed the sunset date because if they stopped collecting the tax in 2040, “it would leave Seattle in one of the biggest structural budget deficits in its history… somewhere north of half a billion dollars.” he said.

Still, Kettle, who sponsored the amendment, argued that Strauss’s removal of the sunset date is like declaring “mission accomplished” before “budget reform,” which some members think they have started by burdening departments with more data collection and reports in their budget provisos and statements of legislative intent. 

Nelson agreed with Kettle. She liked picking a date to “force examination.” However, since the tax's inception, it has been the centerpiece of budget negotiations. No sign of that changing anytime soon.

While Kettle and Rivera both said they don’t anticipate the City will outgrow their need for JumpStart in 2040, Nelson seemed hopeful. She said, “Wouldn't it be great” if the City could stop spending so much on affordable housing after prioritizing it for the next 15 years. Seattle needs to fund at least 2,100 units of affordable housing every year for the next 20 years. So far, they are not on track to do that. 

Buried just below the surface of her comments seemed an admission that Nelson would one day like to stop levying a payroll tax, which her corporate supporters have asked for in the past. This seemingly reveals a preference for regressive taxes, which disproportionately burden the poor, over progressives ones that target the wealthy few. Perhaps, if the City ever buys its way out of the housing crisis, it could use JumpStart to replace more regressive forms of City revenue such as sales tax. Just a thought. 

Anyway, Strauss disagreed with Kettle’s characterization. He was not declaring the mission accomplished. Rather he saw red lights flashing in the control room and no indication the City could stop relying on JumpStart by 2040, particularly as they continue to vote to use JumpStart to backfill the general fund. 

“To put this very plainly, if the General Fund is an allowed use of JumpStart, then JumpStart needs to continue in perpetuity,” Strauss said. “If JumpStart is not continued in perpetuity, we need to be much more refined about how we use JumpStart to plug our budget” so as to not endanger those programs when the tax expires. 

Still, the council voted to reestablish the 2040 sunset date. Saka, Rivera, Moore, Kettle, Woo, and Nelson voted yes. Hollingsworth abstained. Strauss and Morales voted no. 

The fuckery may be a fluke. Council-elect Rinck will officially swear in on November 26 and the City will host a ceremonial swear-in on December 3, replacing council appointee Tanya Woo. If she governs like she campaigned, Rinck will be perhaps the most dogged defender of JumpStart. On her website, she wrote, “ Protect and defend Jumpstart funding – designated towards affordable housing, equitable development, and Green New Deal initiatives – from long-term backfilling of the General Fund” as the second point of the very first heading of her platform.. And a pro-JumpStart candidate may run against Nelson in the upcoming 2025 election. By the time the council revisits the spend plan, likely in the fall of 2026 for the 2027-2028 biennium, the council could be more friendly to the original intent of JumpStart. 

Capital Gains? More Like Capital Lost

The council also voted down Moore’s capital gains tax proposal with Morales, Hollingsworth, Moore, and Strauss voting in favor; Saka, Rivera, Kettle, and Nelson voting no; and Woo abstaining because her husband is a stock trader. Is there anything she can vote on?

The Mayor’s raid on JumpStart closed the huge budget hole this biennium, but the City will still see a deficit of more than $100 million in 2027. Moore rightly noted the City only has two long term options, make drastic cuts or find new revenue. 

She and her colleagues ran campaigns that promised to take a hard look at the budget before proposing more revenue. Moore said after the deep analysis, she found Hannah Krieg was right all along — there’s not a whole lot of places to cut. Okay, she didn’t shout me out by name, but I told every single one of the 2023 candidates they wouldn’t fill the deficit by scrounging between the couch cushions. 

Her proposed tax, mirroring the statewide capital gains tax, would impose a 2% fee on profits from the sale of stocks and bonds exceeding $262,000. The tax could generate anywhere from $16 million and $51 million in its first year and would only apply to about 860 of the city’s wealthiest residents, according to central staff analysis.

Saka, who co-sponsored the proposal, argued the capital gains tax was the “right tax at the wrong time,” which kind of sounds like how you let down a girl you don’t like without hurting her self-esteem or how you pretend to consider Seattle voters’ overwhelming support of taxing the rich without betraying your corporate donors.

However, the City should not wait until the 2027 budget process to start collecting new taxes when they expect a $100 million shortfall. Moore argued the timing is great. 

Nelson questioned the call to raise more revenue at all. She regurgitated tired talking points from the Chamber of Commerce’s poll suggesting 68% of Seattlites do not support new taxes. However, the Chamber’s survey question did not specify that the taxes in question would not target the average person, but rather the ultra wealthy or corporations. When Northwest Progressive Institute asked Seattle voters specifically about progressive revenue, 58% support levying new taxes on wealth. And, in perhaps the clearest indicator, Seattle voted overwhelmingly to keep the statewide capital gains tax when it faced repeal earlier this month. 

Despite the council’s rejection, progressive advocates should not despair — the council has the votes to pass the capital gains tax soon.  

Rinck tells The Stranger she would have voted yes on the capital gains proposal if she was on the dais today, which would make for a majority.

“I want to make sure we revisit it next year,” says Rinck. “I would love to work with a coalition to determine a spend plan that meets our needs.”

You win this round, Chamber of Commerce. But come December, the council has a pro-tax majority once again.