With Only Morales Voting "No," City Council Passes Budget That Repurposes JumpStart, Cuts Jobs

By Erica C. Barmett

The Seattle City Council approved a 2025-2026 city budget this afternoon that makes sweeping structural changes to the JumpStart payroll tax, originally earmarked for a list of progressive spending priorities, instead of imposing the "fiscal responsibility" and financial discipline that its six new members promised in their campaigns.

The budget addresses a long-anticipated structural gap not just by repurposing more than $300 million in JumpStart revenues this year, but by eliminating the spending plan for the tax, allowing it to serve as an all-purpose money spigot in perpetuity—or at least until 2040, when the tax sunsets and a future council will have to take it up again.

As we've written, there are significant risks in turning JumpStart into a primary funding source for the general fund, which includes everything from police to human services to parks. Revenues from the tax have been coming in much higher than the city originally estimated, but they could decline dramatically based on the actions of any of the small number of companies—principally Amazon—that that pay most of the tax.

That hasn't happened in JumpStart's first few years, but it's a bad bet to put the fate of basic city services in the hands of a few large companies whose business decisions could tank the budget overnight; it also puts the city in a poor bargaining position if those companies threaten to move or pull jobs of Seattle unless the city gives them some concession, like a zoning change or support for a favored transportation project.

At the same time, the council narrowly declined to pass a capital gains tax proposed by Councilmember Cathy Moore, which would have funded rental assistance, food for hungry Seattle residents, and homeownership programs. Councilmember Maritza Rivera said the city still lacks enough "data" to know whether renters need financial help, while Councilmember Rob Saka called the proposal the "right tax" at the "wrong time."

The tax, which would have applied to profits on non-real estate investments above $262,000, has a similar volatility problem to JumPStart—at the state level, collections dropped more than 57 percent between 2023 and 2024—but the city could reduce the impact of potential violent swings by reserving most of the revenues for one-time needs or programs that don't need the same funding from year to year. They're unlikely to impose that kind of discipline on themselves, but they could. And the capital gains tax would bring in a fraction of JumpStart collections—between about $16 million and $51 million a year, according to city budget staff.

The underlying budget (to which council members added their own flourishes, including an amendment that sets aside $2 million to remove a curb-height barrier that prevents left turns into the preschool Councilmember Rob Saka's kids attended, which he's been complaining about since 2021) includes new investments in surveillance cameras in so-called crime hot spots, including a 60-block stretch on and around Aurora Ave. N, along with additional cops to monitor those cameras in real time.

It also expands the city's encampment removal team; funds police positions that SPD acknowledges will not be filled this year (SPD routinely uses this money to fund new initiatives outside the annual budget process);  adds $2 million for a "receiving center" for people trying to leave the sex trade on Aurora; expands the CARE team, a group of social workers who respond alongside police to some non-emergency 911 calls; saves the Seattle Channel; and lavishes money on Harrell's "Downtown Activation Plan," a downtown revitalization and beautification effort, while making no significant new investments in similar efforts outside the center city.

The budget also includes significant cuts—laying off many of the internal IT staff who help keep core city functions going; eliminating workforce equity and training programs designed to prevent workplace discrimination and recruit and retain workers from diverse backgrounds; cutting back on parks maintenance and slashing the city's environmental programming in parks by 50 percent; slashing the size of the city's permitting and inspections department; and cutting services to tenants at risk of eviction, including legal assistance, which will now be available only to people making around $30,000 a year, more than $10,000 less than a full-time minimum wage job.

During Thursday's meeting, the council spent more than an hour giving speeches that mostly consisted of thanking staff and each other and praising themselves for their hard work on what Councilmember Maritza Rivera called "the people's budget"—a remark that prompted muffled laughs from some of the advocates holding "Budgets are a moral document!" signs in the room.

Only progressive Councilmember Tammy Morales—the only council member whose top priorities got yanked out of the consent package and rejected by her colleagues—offered any criticism of the budget, which she noted will save a mere $8 million (0.1 percent of the $8 billion budget) by laying off about 80 people. Then she voted against the budget, the first time she has done so in her five years in office.

Her voice breaking, Morales said, "The bottom line is that this council turned a blind eye in a deaf ear to the thousands of constituents who came here for at least 10 hours of public comment and have been emailing and calling us to maintain the Jump Start spent plan to restore the Oversight Committee to fully fund tenant services and to protect our city workers." Advocates in the room stood up and gave "jazz hands"—Strauss' preferred alternative to applause—and quietly whispered "thank you" before the vote.