Legislative Update from Representative Mike Steele

Long-term care, payroll tax delay, local community funding requests, budgeting and tax relief

information and images released by Rep. Steele

Dear Friends and Neighbors: It’s difficult to believe we are approaching the midway point of the 2022 legislative session. Here’s a quick update on some of the important bills, discussions, and debates taking place at the state Capitol.

Long-term care payroll tax delay | WA Cares Fund

Legislation related to the controversial long-term care insurance program and its accompanying payroll tax was approved by the House several days ago. Although this program was signed into law in 2019, it’s been making headlines for the past several months. That’s because most Washington workers are being forced into a long-term care insurance plan administered by the WA Cares Fund.

The Long-Term Care Act is deeply unpopular with voters. Just months after approving the measure in 2019, nearly 63% of voters said it should be repealed through Advisory Vote No. 20. Since then, more than 450,000 workers have made the decision to purchase a qualified private plan and seek an exemption. Many others wanted to opt out but could not find a private plan in time.

There are major flaws in the program that need to be addressed

Workers will have to pay $0.58 per $100 of their earnings to support the program. That may not sound like much, but if you are living paycheck-to-paycheck that can be the difference between buying groceries, or not.

To make matters worse, the program is not solvent. You don’t have to read very far into the State Actuary’s report on the program to see that it will soon need more funding. That means sustaining the WA Cares Fund will require steep tax increases in the future.

Learn more about the long-term care insurance program and its regressive payroll tax here.

House Bill 1733 and House Bill 1732

• House Bill 1732 delays implementation of the program by 18 months; and
• House Bill 1733, creates four new voluntary exemptions from the program.

Both bills have been fully approved by the Legislature and signed into law by the governor. That means that the payroll tax that pays for the benefit — which was supposed to start being collected by employers last month — is now delayed until July 1, 2023, and employers are required to refund any premiums that have been collected to date.

House Capital Budget Committee

As many of you know, I’m the ranking member of the House Capital Budget Committee. Although this committee does not get as much media attention as the transportation or operating budgets, it funds critical infrastructure projects across our state. Called the “brick and mortar” budget, the committee works to approve money for the construction and repair of public buildings and for other long-term local community investments.

This past Friday was the deadline to submit local community requests. At the moment, we’ve received more than $280 million in requests from local entities across the state.

Stay tuned. I’ll be providing more information on the projects that get approved, including those for the 12th Legislative District, in future email updates.

2022 Supplemental operating budget | Tax relief

We are living in historic times. Especially when it comes to the state’s three main budgets. Before the end of the 2022 session, the Legislature will approve supplemental operating, transportation, and capital budgets. A supplemental budget is meant to make minor adjustments to the previously approved two-year budget.

But 2022 isn’t a typical year. That’s because the Legislature has an extraordinary amount of surplus revenue — more than $8 billion.

With all this extra tax revenue, it would be fitting for the Legislature to offer Washingtonians some kind of tax relief.

Unfortunately, instead of approving tax relief legislation, it looks as if the majority party plans to spend most of the state’s extra tax revenue. That’s not a good thing. Why? Because history shows that high government expenditures often hurt the economy.

If the aim is to help Washingtonians as they recover financially from the pandemic, we need to stimulate the economy, not burden it. That means approving bills like House Bill 1858, sponsored by Representative Drew Stokesbary, R-Auburn, that would lower the business and occupation (B&O) tax rate for manufacturing.

We should also give direct tax relief to individuals and families.

Unlike the government, people tend to spend their extra money wisely. Many of the things that they buy — items that help themselves and their families, including household repairs, appliances, food, clothing, and home office equipment — make our economy stronger. Those purchases bolster the private sector, encourage investment, and stimulate job creation.

That’s why I was encouraged to see that Democratic Senator Mona Das, 47th District, a leader in the majority party, offered legislation this session that would reduce the state sales tax. That simple change would give Washingtonians about $2 billion in tax relief. House Bill 5932 would make everything more affordable, with the vast majority of the benefit going to working families.

Regrettably, Das’ bill has not been well received by her own party. The bill has yet to get a hearing in the Senate Ways and Means Committee. That delay is not a good sign on the long road to approval. It looks like this bill will be allowed to “die” without even being considered.

Republican Senator Lynda Wilson, 17th District, has also introduced Senate Bill 5769 that would reform the state tax system by providing direct tax relief to residents, employees, and employers. There’s better news on this bill because it has been scheduled for consideration in the Senate Business, Financial Services and Trade Committee.

Here are a couple of other bills being considered that would help taxpayers:

• Reducing state property taxes | House Bill 1898
• Expanding the working families’ tax credit | House Bill 2015

Thank you!

Please let me know if you have questions, comments, or concerns about items in this email update or the legislative session. Your input and feedback are always appreciated.

It is an honor to serve the great people of the 12th Legislative District!

Sincerely,

Mike Steele