Corporations hoping to derail Seattle’s JumpStart progressive payroll tax were thwarted in a court ruling released Friday. King County Superior Court Judge Mary Roberts ruled in favor of the City of Seattle, dismissing “with prejudice” the lawsuit that the Seattle Metropolitan Chamber of Commerce brought against it.
The City projects the tax will raise $214 million per year from the 700 largest employers in Seattle. Initially those proceeds are geared toward Covid recovery and filling budget holes caused by the recession, but the Council’s long-term plan is to invest the majority of revenue in building affordable housing.
Several Seattle City Councilmembers celebrated the ruling and thanked City Attorney Pete Holmes for the strong defense of their legislation. JumpStart’s author Councilmember Teresa Mosqueda said the Council had tried to put the bill on solid legal grounds from the beginning because “too much was at stake, making sure we had funding for investments in housing, small businesses, equitable development, and the Green New Deal.”
“This is huge for the people of Seattle. This is an incredible victory for hard-working families and small businesses,” Mosqueda added. “I’m jumping up and down for JumpStart.”
The Chamber responds
The Chamber of Commerce, meanwhile, is plotting its next move. Either it or its members are likely to try another legal challenge, particularly after JumpStart collects its first year of proceeds in January 2022 which will open up the possibility of challenging the law “as applied” rather than on “facial” constitutional footing in any circumstance.
“We are disappointed by the court’s decision,” said Chamber President and CEO Rachel Smith in a statement. “We believe our lawyers presented a strong case for why this tax on employee compensation goes beyond the city’s authority, and we are working with our legal team to explore next steps. We remain committed to being a champion for members on this issue. We filed this legal challenge as part of our duty to fully vet policies that impact the business community.”
