(The Center Square) – The Seattle City Council has approved a rate increase to the JumpStart Payroll tax in order to boost revenue for student mental health services.
The newly approved adjustment proposed by Seattle City Councilmember Kshama Sawant increases the minimal rate of the payroll tax to 0.8% and the maximum rate to 2.6%. Overall, there would be a 6.5% increase across all the rates, according to Council Bill 119950.
The JumpStart Payroll Tax requires businesses with at least $7 million in annual payroll to pay a current rate between 0.7%-2.4% on salaries and wages paid to Seattle employees who make at least $150,000 per year. Companies such as Amazon, Meta and Google would be subject to paying the tax.
The payroll tax rate increase would result in an additional $20 million in revenue for the city. The funds would transfer over to the Seattle Department of Education and Early Learning and go towards expanding educational support at Seattle Public Schools.
The school district would prioritize mental health services, including school-based mental health counselors and culturally specific and responsive programming from community-based organizations.
Sawant said there is only one therapist per 1,300 students on average in the Seattle School District.
A report from the Centers for Disease Control and Prevention in 2021 found that 42% of students felt persistently sad or hopeless, 22% seriously considered attempting suicide and 10% attempted suicide.
The Seattle City Council voted 6-3 in favor of the increase at the council meeting on Nov. 21. This will boost the forecasted revenue for 2024, which is currently set at $289.9 million. The adopted 2023 forecast projects $294 million in JumpStart Payroll tax revenue. Notably, total 2021 payroll tax obligations were approximately $293 million, but fell to $253 million in 2022.
