If financial forecasts have 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 subsequent few years. The metro space is just not anticipated to slide into recession, however financial exercise and corresponding taxes — significantly 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 traces of enterprise and program outcomes.” Good thought. However he additionally advocated for larger property taxes and “different income options.”
The state Legislature is transferring alongside a invoice permitting cities and counties to levy larger property taxes, now capped at 1%. If this passes, companies, householders 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 counsel that Seattle’s JumpStart revenues can be wholesome. Shares, significantly in tech, did very nicely final 12 months.
But JumpStart generated $46.7 million much less final 12 months than anticipated, and metropolis economists revised income projections down $81 million this 12 months and $86 million in 2026. All this as companies reminiscent of Amazon and Meta moved jobs from Seattle to the Eastside in recent times.
Seattle has a fame as an financial powerhouse, however the actuality is way extra precarious.
Total, Seattle-area employment grew solely 0.8% in 2024, in comparison with the 1.3% progress on the nationwide stage, in keeping with the Workplace of Financial and Income Forecasts.
Seattle skilled a pointy decline within the building sector because the nationwide common grew.
As reported by the Puget Sound Enterprise Journal, the Seattle metro space misplaced 5,100 building jobs between February 2024 and February 2025, in keeping with knowledge from the Washington State Financial Safety Division.
The marketplace for new workplace buildings — stuffed by the type of employers prone to be topic to a payroll expense tax — has fallen by way of the basement.
On the flip aspect, what sector had the highest job progress in 2024 in comparison with the 12 months earlier than? Authorities.
It’s simple to go after rich firms — significantly these prone to profit from large federal tax cuts. However it 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 finances, they should agree that the most important progress sector of the financial system ought to by no means be authorities itself.
