KOMO 4: Seattle business group says JumpStart tax is pushing jobs, investment toward Bellevue

This story was originally published by KOMO 4 on June 16, 2026.

By Chris Daniels

BELLEVUE, Wash. — Seattle’s payroll tax was created nearly six years ago with a promise to tax the city’s highest-paid workers at its largest companies and use the money to help fund COVID relief, affordable housing, and long-term economic recovery.

But a new report from the Downtown Seattle Association argues the tax, known as JumpStart, has instead become part of a wider cost problem that is making Seattle less competitive with Bellevue.

The report compares the two cities’ business tax structures and downtown recoveries since 2020. It says downtown Seattle has lost tens of thousands of jobs, office vacancy in the downtown core has climbed to 32%, and downtown office values have fallen sharply.

In Bellevue, the report says job growth has moved in the opposite direction, office vacancy is lower, and downtown office property values have remained more stable.

“We’ve lost 30,000 jobs. We’re going in the wrong direction,” said Jon Scholes, president and CEO of the Downtown Seattle Association. “We thought it was appropriate to take a look back at what these taxes have meant for job growth in Seattle.”

Scholes said the organization is not blaming JumpStart alone. The report also points to Seattle’s business-and-occupation (B&O) taxes, property taxes, minimum wage, new social housing tax on high compensation and what Scholes described as an unpredictable regulatory climate.

“It’s much more expensive to have a job here as an employer than it is in Bellevue,” Scholes said. “It’s the B&O tax, it’s the payroll tax. I think it’s also the tone and tenor over many years of city government toward employers, toward business.”

The DSA report says Seattle’s B&O tax rate can be two to four times higher than Bellevue’s, depending on the industry. It also estimates Seattle’s JumpStart tax could cost affected businesses between $1,450 and $9,390 per job in 2026, with additional costs for compensation above $1 million. Bellevue does not have a comparable payroll expense tax.

Seattle Mayor Katie Wilson rejected the idea that JumpStart has weakened the city’s economy, saying the payroll tax has been a key reason Seattle was able to bounce back from the worst economic impacts of COVID.

“Because of Seattle’s ongoing economic strength, this tax on the highest salaries paid by the largest corporations has raised far more money over the past several years than originally projected,” Wilson said in a statement.

Wilson said JumpStart revenue helped Seattle avoid deep budget cuts that would have otherwise been necessary in recent years.

“JumpStart revenue is the key reason why the city has been able to avoid the negative impacts of the deep budget cuts which would have otherwise been necessary over the past few years, and which would have been a massive drag on our local economy,” Wilson said.

The mayor also cautioned against drawing a straight line between one tax and the broader challenges facing downtown Seattle.

“We should be careful not to oversimplify the challenges facing downtown and our regional economy,” Wilson said in the statement.

Wilson pointed to higher costs, higher interest rates, national economic uncertainty, the pandemic, remote work and shifts in the technology sector as factors that have affected cities across the region and country.

“My administration is committed to a balanced approach that supports economic growth while advancing our values,” Wilson said. “I believe that the key to improving our economic climate is addressing homelessness, improving public safety, and making our city a better and more affordable place to live and work.”

Scholes said those broader pressures are real, but argued Seattle is still underperforming compared with nearby cities facing many of the same post-pandemic challenges.

“Bellevue is dealing with a lot of the same thing Seattle is when it comes to remote work and shifts in the tech economy, but they’re growing jobs and Seattle’s losing jobs,” Scholes said. “The big difference is the cost of doing business here relative to Bellevue is much more expensive.”

In Bellevue, developer and former city councilmember Kevin Wallace said the city’s advantage is not necessarily that it cut taxes, but that it has avoided the kind of new business taxes Seattle has added.

“Bellevue has remained the same,” Wallace said. “Bellevue just hasn’t increased taxes over the last 10 or 15 years, and our neighbors have been the ones that have really increased the taxes.”

Wallace said Bellevue’s economy has also benefited from the presence of Amazon, Microsoft and a growing cluster of technology workers and companies.

“That’s allowed us to continue to create a brain trust of tech company employees that call this place home and continue to grow,” Wallace said.

Bellevue business owner and City Councilmember Claire Sumadiwirya said she has seen that growth firsthand. She said corporate investment and more workers returning to offices have increased foot traffic for small businesses.

“We see way more foot traffic because of the big investment from corporations around the world being here in Bellevue,” Sumadiwirya said. “It’s not only the neighbors I grew up with. It’s workers from all around the world.”

Sumadiwirya said she does not see Seattle and Bellevue as rivals, but said tax policy matters to small businesses as well as large employers.

“When a big company gets overtaxed, what suffers actually is the small business,” she said.

The report also argues Seattle’s weakening office market has consequences beyond downtown. As commercial office values fall, the DSA says more of the property tax burden shifts toward residential property owners and small businesses.

Scholes said the answer is not another business tax, but a strategy to make Seattle more attractive for employers and investment.

“We do not need more business taxes,” Scholes said. “We need more businesses in Seattle paying taxes.”

The report comes as Seattle leaders prepare for another budget cycle and continue debating how to pay for city services, housing, transit, and public safety.

For DSA, the message is that Seattle has to compete harder for jobs and investment. For Wilson, the city needs a balanced approach that supports business growth while continuing to fund housing, safety, and affordability.

“We will continue partnering with businesses, workers, labor, and community leaders and leverage the unique assets that have always set Seattle apart: our talent, our innovation, our culture, and our unmatched urban experience,” Wilson said.