(The Center Square) – Seattle Mayor Katie Wilson proposed no new business taxes in her budget plan for next year, instead closing an estimated $175 million budget gap by eliminating 143 positions, most of them vacant.
Wilson had said leading up to the release of Tuesday’s $9.1 billion budget proposal that she was considering new progressive business taxes, setting off alarm bells in the business community and warnings that job losses could follow.
“I have made the difficult decision to transmit a budget without major new revenue,” Wilson said in an afternoon speech at the city’s main public library branch. “Right now, we don’t have good options to raise more progressive revenue that don’t also come with great risks. Our economy and especially our downtown are fragile.”
Wilson said in that context, raising additional revenue through the city’s payroll tax on companies called JumpStart is not the right move.
Seattle’s downtown office market has a close-to-40% vacancy rate, and it has never fully recovered from COVID-19 shutdowns.
Major corporations like Amazon have moved jobs to Bellevue to avoid the JumpStart tax, which applies to companies with payrolls of more than $7 million. Tech layoffs have also hit Seattle hard.
The city began collecting the tax in 2021.
Wilson’s budget plan calls for a 13% increase to the city’s police department to about $1.135 billion. The general fund would direct 53% of its roughly $2 billion in spending toward public safety.
The $68 million increase is supposed to fund 1,250 police officer positions.
Wilson has been heavily criticized by City Council members and the Metro Chamber for not emphasizing public safety enough.
Metro Chamber President and CEO Joe Nguyễn applauded Wilson’s budget in a statement Tuesday.
“This budget reflects a thoughtful approach to a difficult fiscal challenge,” said Nguyễn. “Mayor Wilson has been clear that Seattle must address its budget realities while continuing to invest in the services residents and employers rely on. We appreciate her decision to put forward a balanced proposal with a focus on public safety.”
“These are issues that business leaders, community organizations, and neighborhood stakeholders have consistently raised, and it’s encouraging to see them reflected in Mayor Wilson’s proposal.”
City departments that would see budget reductions include the Office of Economic and Revenue Forecasts, the Office of Sustainability and Environment, Seattle’s planning and community-development functions, Human Services, Emergency Management, the Office of Inspector General, and the Fire Department’s overtime budget.
Wilson’s proposal allocates $500 million for affordable housing, renters and homelessness services. That includes $140 million in JumpStart funding for the Office of Housing.
The Seattle City Council will now take the mayor’s proposed budget under consideration. The council must approve a new budget by Dec. 2.