Seattle Lost 30,000 Downtown Jobs and $10 Billion in Office Value Since Its 2020 Payroll Tax. Bellevue Gained Both.

The Numbers

The Downtown Seattle Association released a report this week comparing Seattle's and Bellevue's economic trajectories since 2020. The findings are direct: downtown Seattle has shed roughly 30,000 jobs, office vacancy in the downtown core climbed to 32%, and assessed commercial property values dropped 48%, a loss of more than $10 billion, according to the report.

Bellevue, which sits just miles east across Lake Washington and does NOT impose an equivalent payroll or social housing tax, moved in the opposite direction. Bellevue's assessed office values rose 7% over the same period. Its office vacancy rate, while elevated post-pandemic, stands at 24%, eight percentage points below Seattle's. And it attracted more jobs to its urban core while Seattle lost them.

What JumpStart Actually Costs

Seattle enacted the JumpStart Payroll Expense Tax in 2020 targeting businesses with annual payrolls above $7 million. It took effect in 2021. For 2026, a business owes the tax if its 2025 payroll exceeded $9,074,409 and it employs at least one worker earning $194,452 or more. Rates this year range from 0.746% to 2.557% depending on payroll and wage tiers, per the Everett Post's reporting sourced from The Center Square.

The Downtown Seattle Association calculated that at the lowest applicable tier, the tax costs Seattle businesses between $1,450 and $9,390 per job. Larger companies — Amazon being the most prominent — pay at the higher rates.

Seattle also imposes a B&O (business and occupation) gross receipts tax running from 0.342% to 0.658% on revenues above $2 million. Bellevue's equivalent B&O rate is 0.1596%. That's two to four times lower depending on the industry, according to the Downtown Seattle Association's analysis. Seattle added a 5% social housing tax on high compensation on top of that. Bellevue has none of these additional layers.

The Tax Is Producing Less Than Projected

The JumpStart tax was projected to generate $388 million this year. That figure has already been revised down by $76 million from earlier estimates, according to a city budget document cited by the Everett Post. The reason: a decline in high-paying jobs in Seattle has shrunk the taxable base.

That's a self-reinforcing problem. Fewer high-wage workers in the city means less payroll tax revenue, which means less money to close a budget gap that is itself growing because of reduced economic activity. This year, nearly half of JumpStart funds — roughly $201 million — were moved to support basic city operations, according to city budget records.

Downtown Seattle Association President and CEO Jon Scholes put it plainly in an interview with The Center Square: "The city of Seattle's budget rises each year, and the city makes up the difference by taxing companies. And that's not the signal that we know has been productive over the last five years when it comes to creating new jobs in Seattle, keeping employers and attracting new ones."

The Case for the Tax

The strongest defense of JumpStart deserves a fair hearing. When the Seattle City Council passed it in 2020, the city faced genuine COVID-19 relief needs, a housing affordability crisis, and severe budget pressure. Proponents argued that taxing large corporations — such as Amazon and other major tech firms — was more equitable than cutting services or raising taxes on residents and small businesses. JumpStart was also designed to fund affordable housing construction, which addresses a real supply shortage that drives up costs for working-class Seattleites.

Mayor Katie Wilson defended the tax directly: "Seattle's JumpStart Payroll Expense Tax is a key reason the city successfully bounced back from the worst economic impacts of COVID." She advised against attributing the commercial core's struggles to a single variable, pointing instead to national inflation, high interest rates, remote work trends, and tech sector restructuring that have disrupted metropolitan areas nationwide.

There is also a legitimate methodological question about the report's framing: correlation is not causation. The 2020-2026 period included a global pandemic, a structural shift toward remote work, and a tech-sector contraction that hit Seattle particularly hard because of its concentration in the industry. Bellevue's gains may reflect the general suburban office migration that occurred in cities across the country, not specifically Seattle's tax policy. The Downtown Seattle Association, which represents downtown business interests, is not a neutral party in this debate. Notably, Amazon's migration toward Bellevue began before JumpStart, sparked by a brief corporate head tax in 2018 that Seattle leaders passed but quickly nullified.

The 8-percentage-point gap in office vacancy and the 55-point gap in property value trajectory between two cities in the same metro, subject to the same pandemic, is a data point that advocates of the tax will need to explain.

Where This Goes

Mayor Katie Wilson, who ran as a Democratic socialist in 2025, now faces an estimated $140 million budget shortfall heading into 2027. Projections show that gap could balloon to nearly $500 million by 2029. The Downtown Seattle Association's report was timed explicitly to the approaching budget season, with its call for the city to "embrace a more pro-business and pro-jobs tone," lower business costs, and speed up permitting.

The concrete unresolved question is whether the City Council responds to a shrinking tax base by raising rates further on the businesses that remain, compressing the base more, or whether it cuts spending and revises the JumpStart structure before the 2027 budget is finalized. Wilson has said she is looking for new sources of progressive revenue, including potentially imposing new business levies.