[US] New investment agenda for Seattle’s $290m payroll tax revenue

In the US, Seattle City Council is poised to approve a new “investment agenda” for the $290 million JumpStart payroll tax intended to create new opportunities for the city’s small businesses and help launch new initiatives, Capitol Hill Seattle reports.

One of those initiatives - The Liberty Project - focuses on Black-owned businesses and businesses owned by underrepresented communities in the city.

On July 26, the council’s Economic Development Committee was reportedly briefed by the Office of Economic Development regarding the stakeholder process to create an “investment agenda to prioritize the use of these funds.”

The city announced that the “Future of the Seattle Economy” framework (PDF) was created with “stakeholder partners from over 80 organizations and government offices, as well as community leaders from a range of racial, ethnic and immigrant identities, neighborhoods, and sectors to create the FSE investment agenda, comprised of immediate investment recommendations and longer-term big bets.”

Legislation creating the new payroll tax was passed by the council in the summer of 2022. Seattle companies with payrolls of $7 million and up now pay a tax on payroll to employees earning more than $150,000 per year. The tax rate ranges from 0.7 per cent to 2.4 per cent with tiers for various payroll and salary amounts.

It was reportedly created in the hope of shoring up the enormous pandemic-related hole in Seattle’s budget forecasts. Late amendments approved include an expanded 20-year sunset clause putting the tax in place for two decades.

The JumpStart spending plan originally called for funding to support maintaining a number of city services with the impact of the COVID-19 crisis, pandemic relief for community organisations and small businesses together with millions in affordable housing investments. That focus, however, has been under pressure from issues with the city’s wider budget picture as it continues to be weakened by economic challenges.

The new guidelines for spending could reportedly alleviate this. The framework incorporates priorities including resources for small businesses, investments in neighbourhood business districts, and resources to address “wealth building” in BIPOC communities including small business ownership and real estate assistance.

In addition, initiatives such as the launch of The Liberty Project will be boosted. The city stated that the programme offers “a wide array of services, including business consulting and strategy services, finance and accounting services (including loan application assistance), marketing services, technology services (such as website development and equipment assessments/upgrades), and contract bid preparation.” It also offers “limited legal support.”

The goal of The Liberty Project is to annually serve a minimum of 30 Black-owned businesses from the retail, personal services, commercial construction, food and beverage manufacturing, restaurant, and power utilities contract industries. The industries were reportedly chosen “due to their high concentration of Black-owned businesses and significant market demand for their services,” according to the city.

Council committee approval will see the plan sent to the full council to codify the agenda and help guide how future JumpStart revenue will be spent. Forecasts predict the JumpStart tax revenue will rise above $310 million in 2024.

Source: Capitol Hill Seattle

(Link and quotes via original reporting) 

In the US, Seattle City Council is poised to approve a new “investment agenda” for the $290 million JumpStart payroll tax intended to create new opportunities for the city’s small businesses and help launch new initiatives, Capitol Hill Seattle reports.

One of those initiatives - The Liberty Project - focuses on Black-owned businesses and businesses owned by underrepresented communities in the city.

On July 26, the council’s Economic Development Committee was reportedly briefed by the Office of Economic Development regarding the stakeholder process to create an “investment agenda to prioritize the use of these funds.”

The city announced that the “Future of the Seattle Economy” framework (PDF) was created with “stakeholder partners from over 80 organizations and government offices, as well as community leaders from a range of racial, ethnic and immigrant identities, neighborhoods, and sectors to create the FSE investment agenda, comprised of immediate investment recommendations and longer-term big bets.”

Legislation creating the new payroll tax was passed by the council in the summer of 2022. Seattle companies with payrolls of $7 million and up now pay a tax on payroll to employees earning more than $150,000 per year. The tax rate ranges from 0.7 per cent to 2.4 per cent with tiers for various payroll and salary amounts.

It was reportedly created in the hope of shoring up the enormous pandemic-related hole in Seattle’s budget forecasts. Late amendments approved include an expanded 20-year sunset clause putting the tax in place for two decades.

The JumpStart spending plan originally called for funding to support maintaining a number of city services with the impact of the COVID-19 crisis, pandemic relief for community organisations and small businesses together with millions in affordable housing investments. That focus, however, has been under pressure from issues with the city’s wider budget picture as it continues to be weakened by economic challenges.

The new guidelines for spending could reportedly alleviate this. The framework incorporates priorities including resources for small businesses, investments in neighbourhood business districts, and resources to address “wealth building” in BIPOC communities including small business ownership and real estate assistance.

In addition, initiatives such as the launch of The Liberty Project will be boosted. The city stated that the programme offers “a wide array of services, including business consulting and strategy services, finance and accounting services (including loan application assistance), marketing services, technology services (such as website development and equipment assessments/upgrades), and contract bid preparation.” It also offers “limited legal support.”

The goal of The Liberty Project is to annually serve a minimum of 30 Black-owned businesses from the retail, personal services, commercial construction, food and beverage manufacturing, restaurant, and power utilities contract industries. The industries were reportedly chosen “due to their high concentration of Black-owned businesses and significant market demand for their services,” according to the city.

Council committee approval will see the plan sent to the full council to codify the agenda and help guide how future JumpStart revenue will be spent. Forecasts predict the JumpStart tax revenue will rise above $310 million in 2024.

Source: Capitol Hill Seattle

(Link and quotes via original reporting)