A looming $140 million revenue gap facing the City of Seattle would be addressed through the city’s JumpStart payroll tax that is expected to bring in more than $277 million into the city this year.

Seattle Mayor Bruce Harrell’s proposed budget for 2023-24 would see approximately $105 million in 2023 and $130 million in 2024 as the maximum amounts available to transfer from the JumpStart Payroll Expense Tax Fund to the General Fund. 

The proposed budget would have a total of $306.3 million in expenditures backed by JumpStart Payroll Expense Tax revenues in 2023 and $309.5 million in 2024, if passed by the Seattle City Council.

In support of general city government services, Harrell is proposing $85.9 million to support the city’s general operating expenses and $8.8 million to support evaluation work anticipated as part of the overall programming of the payroll expense tax. The following year would see a total of $93 million in JumpStart dollars go towards general government services

The JumpStart payroll tax requires businesses with at least $7 million in annual payroll to pay between 0.7 percent to 2.4 percent on salaries and wages paid to Seattle employees who make at least $150,000 per year. Companies such as Amazon, Meta and Google would be subject to paying the tax.

Last year, the tax brought in $248.1 million. According to the budget, as of Aug. 8, the Seattle Office of Economic and Revenue Forecasting projects 2023 payroll tax revenues at $294.1 million.

For housing initiatives, the proposed budget includes $138 million in payroll taxes. Out of the allocated funds, $137.6 million would support the Seattle Office of Housing’s work to develop and acquire affordable housing and foster affordable homeownership opportunities. The remaining $400,000 would go toward providing eviction legal defense for the Seattle Department of Construction and Inspections and the Department of Finance and Administrative Services to provide compliance efforts for affordable housing development.

The city’s Green New Deal, which established a goal of putting Seattle at the forefront of innovative policies to reduce emissions, has a proposed budget of $20.5 million from payroll taxes. Over $8 million will go to the Office of Sustainability and Environment to support green economy workforce development, building performance and emissions standards, electric vehicles and environmental justice, according to the budget.

The proposed budget also sets aside $29.4 million in unallocated 2022 payroll tax revenues into what is effectively a city savings account. 

Harrell said that his office looked into other ways to close the $140 million revenue gap. This includes focusing on reducing budgets by 3 percent to 6 percent for various city departments and determining the proper amount of budget to be allocated for salaries and benefits in department budgets.

“We closely scrutinized the work we do, looked for efficiencies, and found savings wherever we could,” Harrell said at a press conference. “We used revenue from the payroll expense tax to balance the budget . . . a necessary decision to prevent harmful reductions in services.”