[{"_1":2,"_99":-5,"_100":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,75,87],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":68,"_72":73,"_74":73},"mediaId",6143696,"mediaKeyId","5535460-1109aa826e1065b2ac885ff380a3c054","parentId",5535460,"title","Sales-tax forecast hit by construction downturn, high downtown office vacancy; B&O policy changes add uncertainty","audioSeconds",184,"startMs",2236000,"endMs",2420000,"viewUrl","/Search/View?dp=1&key=5535460-1109aa826e1065b2ac885ff380a3c054&start=2236&end=2420","thumbnailUrl","https://assets.pipeline.soar.com/5535460-1109aa826e1065b2ac885ff380a3c054/thumbnail_2236000.jpg","articleUrl","/articles/6143696/Seattle/King-County/Washington/Sales-tax-forecast-hit-by-construction-downturn-high-downtown-office-vacancy-BO-policy-changes-add-uncertainty","mediaUrl","https://secure.pipeline.soar.com/6143696-5ea4776ef3e8a81e58bd4fe1f47caed6/orig.mp4?Expires=1775054215&Signature=nPt-Q4IEnjj5wewq2JPLevkSfyT5ra2Ew4ng4scptujxupNpc~VZIP3pZ~0Ah1RiIMgAeggAb-xyguKjQ6TsvshlAW9SipAWTOScbJpylIpfoGAVUIEftHTbuW9Eypb89~6~7PVFHOHhBBGreLxCkQJXNl9UMHRkxw2KJbqUnLa-SoKv3nHJolIbnfS-nk3EQbSEkxMKuEcci98xiOeWTavImDNEgrp4QMzuTdea3iUwFzdv54kiswG8mZ0Hl9VDZbGk-EkzYjrJuDe9rFe4aPZflJXUSwI-dzqzDN85vY~UlP9kLAEgGbeBcdX1PM~8vVlQ0Ifeo7VtgR2iuahL3w__&Key-Pair-Id=KUT5TJCACFTXG","author","Seattle City, WA","date","2025-08-06T12:04:50.543Z","article","Forecast Office staff told the Forecast Council that sales-tax collections have been weakened by a marked decline in construction activity and by lower demand for office space that is especially pronounced in the Seattle Central Business District.

Staff showed that the value of building permits issued through June had fallen from a 2016–19 average of roughly $3.9 billion to about $2.0 billion year-to-date, and noted that construction-sector declines were a significant downward contributor to sales-tax obligations. CoStar data cited by staff show elevated office vacancy rates and projections that meaningful declines in downtown vacancy are unlikely before the mid-2030s.

Tourism data were also cited: Forecast staff said a Tourism Economics analysis expects a large drop in international visitors for 2025 and only a partial recovery beginning in 2026, which reduces leisure-and-hospitality sales-tax receipts and short-term rental tax collections.

On business and occupation (B&O) taxation, staff reported two policy items affecting forecasts: Washington State Senate Bill 5814 (which reclassified certain services and changes tax treatment) and a separate local proposal to restructure Seattle’s B&O tax (not yet approved by voters). The Forecast Office said SB 5814 was incorporated in the August forecast; the local restructure was analyzed but not incorporated because it had not been adopted. Staff noted limited data to fully estimate behavioral responses by large taxpayers, and that combined policy changes can increase variance between forecasted and actual collections.

Council members asked for industry-level detail and for comparisons showing how the August baseline would have differed if the April baseline had been adopted instead of the April pessimistic scenario. Staff agreed to supply additional visualizations and more disaggregation on request.","mediaType","Video","parentTitle","Economic and Revenue Forecast Council meeting of 8/4/25","oneSentenceSummary","Forecast staff reported weak sales-tax growth driven by a sharp drop in construction permit value and rising office vacancy rates downtown. They also flagged state and local B&O tax changes (Senate Bill 5814 and a proposed Seattle B&O restructure) as added sources of uncertainty for business-tax collections.","taxTitle","Seattle, King County, Washington","taxId",2543,"location","headline","","shortSummary",{"_33":76,"_35":36,"_37":38,"_39":77,"_41":78,"_43":79,"_45":80,"_47":81,"_49":82,"_51":83,"_53":84,"_55":56,"_57":58,"_59":85,"_61":62,"_63":64,"_65":86,"_67":68,"_69":70,"_71":68,"_72":73,"_74":73},6143701,"Forecast office flags payroll-expense tax volatility, wide uncertainty around social housing tax estimate",330,2340000,2670000,"/Search/View?dp=1&key=5535460-1109aa826e1065b2ac885ff380a3c054&start=2340&end=2670","https://assets.pipeline.soar.com/5535460-1109aa826e1065b2ac885ff380a3c054/thumbnail_2340000.jpg","/articles/6143701/Seattle/King-County/Washington/Forecast-office-flags-payroll-expense-tax-volatility-wide-uncertainty-around-social-housing-tax-estimate","https://secure.pipeline.soar.com/6143701-e248f5666546e5fafd22e5fdc7dbab94/orig.mp4?Expires=1775054215&Signature=ozyHPDXI~UOSOdYysVO7PzpB0WoPhoCNaLNpX~JR87OygFrNmX~-Zb74L5w1zrZT0ttJyYLUW~l9fJArbydjax~t13DdVT5DgcQ6kQAp~SYus7yV83QUamvdVqpwL-REqnKWf7Y2m68HLfmIGnmlSosYbMPneiDLDng0VkthJM6MxV7u202Rx4nCRSoSv8GeXaA37Agp0Gld16UD4ndVAP9fuyHVRwclZM402lSeje-tkWJGvB497bScvB-plgAqFArYZvvgQM2ow8EMHTS40dY~EuFlyPKwi7FZMeTwjYxKgCYNG6adpuiCQINu16rthdQr66IkCrNY3P7BO0lPkQ__&Key-Pair-Id=KUT5TJCACFTXG","Forecast Office staff told the Forecast Council on Aug. 4 that payroll-expense tax collections are unusually volatile this cycle because a large share of compensation at major taxpayers is delivered as restricted stock units (RSUs) and other equity-linked pay. Staff said payroll-expense tax forecasts depend heavily on expected stock prices and analysts' outlooks for large companies.

Director Duras said the office uses an average of commercial US forecasts (S&P Global and Moody’s Analytics) as inputs to limit single-source optimism. Under the pessimistic scenario, staff said payroll-expense tax collections could be nearly $40 million lower over the two-year window than under baseline assumptions, driven by equity price declines and weaker compensation realizations.

Forecast staff also presented a preliminary estimate for the proposed social housing payroll tax for the 2025 tax year (taxes due Jan. 2026). The office estimated $65.8 million as a midpoint and presented a plausible range of roughly $39.2 million to $80.0 million, describing the number as subject to substantial uncertainty. Staff explained the uncertainty arises because the administrative payroll data from the Employment Security Department (ESD) are reported at employer sites and do not map cleanly to the city tax base; some firms report payroll at a single headquarters location that does not reflect worker location for tax liability.

Council members asked for further breakdowns and for the Forecast Office to refine estimates as additional data become available and as tax implementation rules are clarified.","Forecast staff told the council payroll-expense tax collections are highly sensitive to equity prices and restricted stock compensation, producing large swings across scenarios; the office also reported a preliminary social housing tax estimate with a wide range and substantial data limitations.",{"_33":88,"_35":36,"_37":38,"_39":89,"_41":90,"_43":91,"_45":92,"_47":93,"_49":94,"_51":95,"_53":96,"_55":56,"_57":58,"_59":97,"_61":62,"_63":64,"_65":98,"_67":68,"_69":70,"_71":68,"_72":73,"_74":73},6143706,"Seattle forecast council concurs with August 2025 baseline revenue forecast",4035,615000,4650000,"/Search/View?dp=1&key=5535460-1109aa826e1065b2ac885ff380a3c054&start=615&end=4650","https://assets.pipeline.soar.com/5535460-1109aa826e1065b2ac885ff380a3c054/thumbnail_615000.jpg","/articles/6143706/Seattle/King-County/Washington/Seattle-forecast-council-concurs-with-August-2025-baseline-revenue-forecast","https://secure.pipeline.soar.com/6143706-2d985a5e1445dcc7c33f6a2090950ded/orig.mp4?Expires=1775054215&Signature=Ixnc4bGeSHXKKjl3mUuTVaSrtoOqX02ZMuk8X05kT~7TnIk0lcxv9le2YgcybAdxbg3DNmDnSZLDfm7Zh~GxJySa1E6DTWnpd~Rpmt8EmFG8cGl6wu8Ipru9FZtkLWKMV-sy~mYPKoX4mWTYMQioRAx9RL-2sXiWn2BreoutrblJuiOBVajWIHft9KNO-y61re6-IiR4U3oXkgbwiYG-sBP0j6bVgSi~Ps3M3SFxcSXENdnTj4YYS3lyRksVnTpyNBczjla4F7ii--Hl9u~IqG6Fko4v0eOR~H5BodtjivoGzOvKRdpMMv8VqDlXntstkEnSwEK8rJDByBbTxTlgXQ__&Key-Pair-Id=KUT5TJCACFTXG","Seattle’s Economic and Revenue Forecast Council on Aug. 4 reviewed updated economic scenarios and recorded its concurrence with the Forecast Office’s recommendation to adopt the August 2025 baseline revenue forecast to inform the mayor’s proposed budget. Forecast staff presented baseline, pessimistic and optimistic scenarios and recommended the baseline as the official forecast.

The baseline matters because it sets the revenue assumptions for the mayor’s proposed budget and for the City Council’s subsequent review. Forecast staff told the council the baseline reflects an improved outlook since April but that material downside risk remains and that the pessimistic scenario now incorporates a recession.

Forecast Office staff summarized recent economic developments, including tariff-related volatility, weaker-than-expected employment data in the latest report, and recovery in equity markets since April. Staff said they used an average of two commercial US forecasts (S&P Global and Moody’s Analytics) to temper optimism and reduce downside risk to the city’s revenue outlook. Staff reported a current probability assignment of 50% baseline, 25% optimistic and 25% pessimistic. The office recommended the baseline; the council registered no objections and asked that the minutes record concurrence with the Forecast Office’s recommendation.

Council members and budget staff asked for additional detail on specific revenue lines and stressed the high uncertainty around the coming months. Forecast staff cautioned that near-term reports could shift the outlook and encouraged budget planners to recognize the possibility of downward revision between now and the final October forecast.

The meeting also noted timing: the Forecast Council is scheduled to provide a final revenue update Oct. 20, 2025, which will establish the total resources available for the City Council’s appropriation decisions.","The city’s Forecast Council reviewed updated economic and revenue scenarios and recorded concurrence with the Forecast Office’s recommendation to adopt the August 2025 baseline forecast as the official forecast for the mayor’s proposed budget.","actionData","errors"]

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Sales-tax forecast hit by construction downturn, high downtown office vacancy; B&O policy changes add uncertainty

Forecast office flags payroll-expense tax volatility, wide uncertainty around social housing tax estimate

Seattle forecast council concurs with August 2025 baseline revenue forecast