JumpStart Revenues Flatten and Council Questions Strauss Proposal to Mandate Earplug Sales at Venues
Today's Afternoon Fizz.
1. As we reported on Bluesky Tuesday afternoon, the city of Seattle's revenue update for the last quarter of 2024 shows that the JumpStart payroll tax fell about $47 million short of expectations last year, raising questions about the wisdom of discarding the original spending plan for the tax and using it to pay for basic city services.
Instead of bringing in $406 million last year, as the city's budget forecast predicted, the payroll expense tax yielded $360 million—more than the $315 million the tax brought in for 2023, but more than 11 percent shy of what city budget planners expected. If this trend continues, it could be a major problem; last year, the mayor and city council added tens of millions of dollars in new spending, much of it ongoing, to the city's budget, using $287 million in "extra" JumpStart revenues over two years to pay for the new spending and close a massive budget deficit.
Revenues from JumpStart are potentially quite volatile, because the entire tax base consists of fewer than 500 companies, with about 10 companies contributing around 70 percent of JumpStart revenues (and about 90 percent of the tax coming from just 100 companies). Changes at any of those companies, such as layoffs or relocations, can lead to dramatic shifts in the amount of revenue the tax produces.
Despite knowing this, the city has increasingly used these revenues to pay for basic, ongoing city services. Last year, the council gutted the original spending plan for JumpStart, making the original spending categories (housing construction and acquisition, economic revitalization, equitable development, and the Green New Deal) optional instead of mandatory. As we've reported, even with ever-increasing JumpStart transfers, Harrell's 2025 budget already projected another deficit starting in 2027.
The city's Office of Economic and Revenue Forecasts will release its new budget projections in two weeks, on April 10. That forecast should provide a better sense of how much trouble the city is in financially, and whether the council will need to make budget cuts this year to keep the budget balanced. The budget the city adopted last year assumes that JumpStart revenues will grow continually every year, bringing in $430 million this year, $452 million next year, and $469 million in 2027.
2. Council member Dan Strauss' colleagues expressed skepticism last week about his proposal to require all venues that host live music to provide earplugs to patrons for less than $1, with fines of up to $50 a week for those that fail to comply.
The proposal, which Strauss called "simply a good little bill," would create a new business category called "loud music venues," which would include all existing music venues as well as some other businesses that allow dancing, sell alcohol, or host live music.
Strauss introduced the legislation in his finance committee the morning after a marathon meeting on housing in the city's stadium district at which Strauss accused his colleagues of voting to destroy Seattle's maritime industries by allowing 990 apartments around First Ave. South. The plan passed 6-3 with Strauss, Bob Kettle, and Alexis Mercedes Rinck voting no.
Strauss said he decided to introduce the bill after talking to a "concerned audiologist" who spoke to Strauss about hearing loss during his office hours in Ballard. "This bill is about making sure that people have the opportunity to both enjoy Seattle's vibrant music scene and protect their hearing health, no matter where they go," he said.
But Kettle, along with Rob Saka, Sara Nelson, and Maritza Rivera, all questioned the wisdom and timeliness of Strauss' "good little bill."
Kettle noted that there are many other situations, such as street racing, where people may be exposed to loud noises involuntarily, as opposed to live music shows, where people know what to expect.
Rivera wondered why only two cities in the US—Minneapolis and San Francisco—have adopted similar laws, and "they did it 10 years ago. No one else has done it again."
Saka—who reminisced about "screaming like a teenage girl" at a Justin Timberlake concert last year—suggested that instead of requiring venues to offer earplugs, the city could require signs notifying patrons about the risks caused by listening to loud music without hearing protection.
And Nelson said she was concerned about the impact the new regulations might have on venues that are still struggling. "What I hear from music venues is that they just got through pandemic, and they're really focused on rebuilding their businesses."
Strauss said he plans to formally introduce the legislation on April 16, and hopes to pass the proposal by the end of next month.