Friends and Neighbors,
If you click on this link above and enter your name and email address, you will be registered and emailed a new link that will allow you to participate in the event. Once in, you are welcome to ask us questions, share your thoughts, or just listen in. I encourage you to join us. Please let me know if you have any questions.
The troubled long-term care insurance program and payroll tax
One of the most important issues this legislative session is addressing the troubled long-term care insurance program and payroll tax. Initially established in 2019 through House Bill 1087, a measure I voted against, the program has been mired in controversy since last summer when Washington workers realized they would need to purchase a qualified, private long-term care insurance policy by November 1 or face a career-spanning payroll tax.
Long-term care is an important issue and need for many people. But like any other kind of insurance, it's a financial decision that should be left to an individual and based on his or her unique circumstances. It's not right for state government to make that decision for someone.
Unpopular and insolvent
The long-term care insurance program is very unpopular. Nearly 63% of voters said House Bill 1087 should be repealed through Advisory Vote No. 20 in 2019. To date, around 450,000 people have sought an exemption – which creates even more challenges for the already-insolvent program. That means the payroll tax will likely need to be increased in the future. You can read what our State Actuary had to say about the program here.
The payroll tax is also regressive. So many people are living paycheck-to-paycheck and can't afford any more to be taken from them – especially when so many of their current expenses are rising rapidly. Imagine struggling to pay into a system for decades and then either not needing the modest benefit ($36,500 over a lifetime) or not being able to access it. That's not fair. This website allows you to estimate what your payments would be based on your gross salary.
The modest “benefit” of $36,500 will cover very little and for a short period of time, so this isn't really long-term care.
Democrats understand there are problems with their program, but unfortunately are standing by and defending it. To alleviate pressure and give themselves more time to figure out what to do, the majority party passed House Bill 1732 last week. The measure would delay implementation of the program by 18 months and delay premium collections until July 2023. No longer having this deducted from paychecks is a good thing – and why I voted for the bill. It was fast-tracked through the Senate this week and signed into law by the governor yesterday.
However, this is only a temporary measure. I continue to oppose the program. In fact, I am a co-sponsor of legislation that would repeal it.
Alternative proposals were not even considered. My colleague, Rep. Drew Stokesbary, proposed House Bill 1913. The measure would replace the program with an affordable and optional alternative. You can learn more about it here.
Providing meaningful tax relief
In my first email update, I talked about the opportunity for the Legislature to provide meaningful tax relief with the state's large budget surplus. This not only can be done, but should be done, as families struggle with inflation, gas prices, and other financial burdens.
There are different ways to provide tax relief. I have introduced House Bill 1898. The measure would reduce both parts of the state property tax levy and return $2 billion back to taxpayers through a reduction and rebasing of the state levy from overcollections from 2018-2022. This has occurred because property values have risen much faster than anticipated since the “McCleary Fix” legislation passed in 2017.
Another option is expanding the Working Families Tax Credit. House Bill 2015 would enhance the Working Families Tax Credit by expanding income eligibility, doubling the base payment, and increasing the minimum benefit for working families with children.
The majority party has signaled they are open to discussing options for tax relief. But we'll see what, if anything, happens. Every state lawmaker must be mindful of how legislation might impact the finances of Washingtonians. Well-intended bills have passed the last few years that will add to the financial pressures facing individuals and families.
For example: As people fight inflation, on the horizon is the implementation of the low-carbon fuel standard and cap-and-trade policies – two bills passed last year that were part of Gov. Inslee's climate change agenda. Once implemented, they are expected to increase the costs of gas, goods, and energy. State lawmakers must understand the consequences and cumulative effects of their actions and stop imposing more harm to our citizens.
Just a reminder that while you cannot physically be in many places on the Capitol campus, there are several ways for you to be involved in the legislative process virtually. Please call, email, or send me a letter any time if you have thoughts to share.