I submitted the following testimony to the House Finance Committee during the 1/22/2026 hearing on HB 2100.
My name is Ryan Frost, and I’m the Director of Budget and Tax Policy at the Washington Policy Center. I'm here in opposition to this proposed statewide payroll tax because it takes Seattle's failed tax experiment and forces it on the entire state.
Seattle's been testing this exact tax since 2020 with their JumpStart payroll tax. The results are concerning. Businesses are leaving and fewer new businesses are starting than at any point in recent history. Seattle City Council President Sara Nelson put it quite plainly when she said, "Instead of 'jump-starting' Seattle's recovery, hundreds of businesses closed or left downtown, taking those jobs elsewhere."
Seattle is also diverting JumpStart funds from its original target, affordable housing, into the general fund to cover basic operations. The city then eliminated the oversight committee that was supposed to monitor spending. The dedicated funding promise lasted exactly as long as it took for the first budget crisis to hit. A budget crisis largely inflicted by the JumpStart tax.
We've seen this type of tax hurt elsewhere too. San Francisco spent years trying to shift from payroll taxes to gross receipts taxes because payroll taxes "disincentivized hiring" and led to volatile revenues. Portland is hemorrhaging high earners to Clark County, Washington. One economist calculated they're losing $1 billion in taxable income annually to tax competition.
When Seattle passed JumpStart, companies could – and did - move to Bellevue or Redmond. They stayed in the region and avoided the tax. A statewide payroll tax kills that option. Our businesses can’t move to another Washington city. They'll leave for Texas, Utah, or Tennessee instead.
Washington is not Alaska. We don't have oil revenue to fund government spending. Our state budget relies on a strong private sector to fund the very programs you believe are needed. Seattle's experiment failed, let's not mandate that failure for the entire state.
