If financial forecasts had been climate forecasts, we’d be grabbing galoshes and rain slickers.
With persevering with chaos round tariffs and weak job progress, the Seattle Metropolis Council properly adopted “pessimistic” income projections for the following few years. The metro space isn’t anticipated to slide into recession, however financial exercise and corresponding taxes — notably the payroll expense tax on companies, so-called JumpStart — have been revised downward.
Mayor Bruce Harrell responded to an April 10 report by the Office of Economic and Revenue Forecasts by cinching down on metropolis journey and different spending. He additionally promised to take a “big-picture view of potential expense reductions by taking a look at strains of enterprise and program outcomes.” Good thought. However he additionally advocated for increased property taxes and “different income options.”
The state Legislature is shifting alongside a invoice permitting cities and counties to levy increased property taxes, now capped at 1%. If this passes, companies, owners and renters can anticipate will increase in month-to-month bills.
And the latest efficiency of Seattle’s payroll tax underscores the perils of going after large employers.
Since these taxes are primarily based on an worker’s compensation together with shares, standard knowledge would recommend that Seattle’s JumpStart revenues can be wholesome. Shares, notably in tech, did very nicely final yr.
But JumpStart generated $46.7 million much less final yr than anticipated, and metropolis economists revised income projections down $81 million this yr and $86 million in 2026. All this as companies similar to Amazon and Meta moved jobs from Seattle to the Eastside in recent times.
Seattle has a popularity as an financial powerhouse, however the actuality is much extra precarious.
General, Seattle-area employment grew solely 0.8% in 2024, in comparison with the 1.3% progress on the nationwide degree, in line with the Workplace of Financial and Income Forecasts.
Seattle skilled a pointy decline within the development sector because the nationwide common grew.
As reported by the Puget Sound Enterprise Journal, the Seattle metro space misplaced 5,100 development jobs between February 2024 and February 2025, in line with information from the Washington State Financial Safety Division.
The marketplace for new workplace buildings — stuffed by the sort of employers prone to be topic to a payroll expense tax — has fallen via the basement.
On the flip facet, what sector had the highest job progress in 2024 in comparison with the yr earlier than? Authorities.
It’s simple to go after rich firms — notably these prone to profit from large federal tax cuts. But it surely shouldn’t be misplaced within the dialogue that Seattle should stay aggressive with the area and different states, or it should hemorrhage good-paying jobs.
As metropolis leaders put collectively a funds, they should agree that the largest progress sector of the economic system ought to by no means be authorities itself.
