Amazon’s headquarters and neighboring towers in downtown Seattle. (GeekWire Photo / Kurt Schlosser)
Updated with comments from Seattle Mayor Katie Wilson.
A new Downtown Seattle Association report asserts that Seattle’s signature tax on big employers is backfiring, five years after it went into effect, holding up nearby Bellevue as an example of the jobs and prosperity the city has missed out on in the process.
The report, released Monday afternoon, finds that downtown Seattle has lost about 30,000 jobs since 2020 and that the taxable value of its office buildings has fallen 48% — even as Bellevue, which has no comparable tax, added jobs and saw commercial values rise 7%.
JumpStart, passed in 2020 and in effect since 2021, taxes the payrolls of Seattle’s largest employers, including Amazon and other big tech companies. It’s projected to raise about $388 million this year, down from earlier forecasts, due in part to the loss of high-paying jobs.
It is, to a large extent, a tax on big tech. About 70% of JumpStart revenue comes from just 10 companies, most in the technology sector, according to the city’s budget office. That’s a reflection of how heavily Seattle’s economy leans on a handful of large tech employers.
“These were a set of taxes that may have provided some short-term gain to the city coffers, but are inflicting long-term pain,” DSA President and CEO Jon Scholes said in an interview. “We predicted that at the time, and were sort of dismissed and ignored.”
Seattle Mayor Katie Wilson, in a statement Monday evening, credited JumpStart with helping the city recover from the pandemic and cautioned against blaming downtown’s challenges on any single cause.
The tax has raised far more than originally projected over the past several years, she said, and let the city avoid deep budget cuts that would have dragged on the local economy.
“We should be careful not to oversimplify the challenges facing downtown and our regional economy,” Wilson said, blaming “chaotic and counterproductive national economic policies” for higher costs and interest rates that have slowed investment across the city, region, and country.
Wilson also cited the pandemic, the rise of remote work and broader shifts in the tech sector as forces that have affected cities well beyond Seattle. The city’s recovery, she said, has remained resilient and competitive even as her administration works to diversify the economy for the future.
Amazon had started to expand in Bellevue prior to the JumpStart tax, following the city’s short-lived 2018 “head tax,” a JumpStart precursor that the council at the time passed and quickly repealed. The company has since built its Bellevue workforce to about 15,000 people, part of what it now calls its broader Puget Sound regional headquarters.
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JumpStart was an early example of a wave of new taxes in Washington that has prompted business and tech leaders to warn of an increasingly anti-business climate. Lawmakers have since added a capital gains tax and, this spring, a 9.9% tax on income above $1 million — fueling concerns from some executives about the state’s competitiveness.
The DSA is not calling for outright repeal of the Seattle tax. Scholes said the group wants a “course correction” — incentives and the temporary suspension of payroll or business taxes for companies that invest in Seattle, along with a more welcoming posture from City Hall toward employers.
The tax was created to fund affordable housing, small-business support, climate programs and equitable development, with the largest share (about 62%) going to housing. But amid recurring budget shortfalls, the city has tapped JumpStart to help prop up its general fund, transferring about $201 million — roughly 47% of the tax’s revenue — to general government operations this year, according to budget documents.
DSA may face a challenge in proving a direct causal link between the tax and the trends in downtown Seattle. Downtowns across the country, including San Francisco, Portland and Chicago, have seen office values fall and vacancies climb since the pandemic with no comparable tax, due to remote work, tech-sector layoffs and AI-driven cuts.
Scholes asserted that Bellevue has faced similar pressures yet kept growing.
“We think it’s a pretty good control group over there,” he said, attributing the divergence to Seattle’s higher cost of doing business and an unwelcoming “tone and tenor” toward employers.
Scholes said he was encouraged by early signals from Wilson, who has asked city departments to identify spending reductions ahead of her 2027 budget, due late this summer. He credited the mayor for that but added that the DSA is taking a wait-and-see approach overall.
In her statement, Wilson said Seattle “remains one of the fastest-growing big cities in the country,” but added that the city needs “to do more to push against the global and national headwinds and build a city with more businesses opening here, thriving here, and providing jobs here.”
The key to improving its economic climate, she said, is addressing homelessness, improving public safety, and making Seattle a better, more affordable place to live and work.
Read the DSA report here.
