Legislative Update from Rep. Mike Steele

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

information and images published by Rep. Steele

Dear Friends and Neighbors: It’s hard to believe we’re approaching the halfway point of the 2022 legislative session. Here’s a quick update on some of the important bills, discussions, and debates happening at the State Capitol. .

Long Term Care Payroll Tax Delay | WA Cares Fund

Legislation for the controversial long-term care insurance program and accompanying payroll tax was approved by the House a few days ago. Although this program was enacted in 2019, it has been in the headlines for several months. Indeed, most workers in Washington are forced to subscribe to 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 Just months after the measure was approved in 2019, nearly 63% of voters said it should be repealed by Advisory Vote No. 20. Since then, more than 450,000 workers have made the decision to sign up to an eligible private plan and apply for an exemption. Many more wanted to retire but couldn’t find a private plan in time.

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

Workers will have to pay $0.58 for every $100 of their earnings to support the program. That might not seem like a lot, but if you’re living paycheck to paycheck, it can mean 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. This means that maintaining the WA Cares Fund will require large 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

Both bills have been fully approved by the Legislative Assembly and signed into law by the Governor. This means that the payroll tax that pays for the benefit – which was due to start being collected by employers last month – is now postponed to July 1, 2023, and employers are required to refund any premiums that have been collected to this day.

House Capital Budget Committee

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

Last Friday was the deadline for submitting applications from local communities. Currently, we have received over $280 million in requests from local entities across the state.

Stay tuned. I will provide more information on approved projects, including those for the 12th Legislative District, in future email updates.

2022 Supplementary Operating Budget | Tax relief

We live in historic times. Especially when it comes to the three major state budgets. Before the end of the 2022 session, the Legislative Assembly will approve the supplementary operating, transportation and capital budgets. An additional budget is intended to make minor adjustments to the previously approved biennial budget.

But 2022 is not a typical year. This is because the Legislative Assembly has a extraordinary amount of excess revenueover $8 billion.

With all that extra tax revenue, it would be appropriate for the legislature to offer Washingtonians some kind of tax relief.

Unfortunately, instead of approving the tax relief legislation, it looks like the majority party is planning to spend the bulk of the additional state tax revenue. It is not a good thing. Why? Because history shows that high government spending often hurts the economy.

If the goal is to help Washingtonians recover financially from the pandemic, we need to stimulate the economy, not weigh it down. That means approving bills like the 1858 House Bill, sponsored by Rep. Drew Stokesbary, R-Auburn, that would lower the Business and Occupational (B&O) tax rate for manufacturing.

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

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

That’s why I was heartened to see that Democratic Sen. Mona Das, 47th District Leader of the Majority Party, this session proposed legislation that would reduce the state sales tax. This simple change would give Washingtonians about $2 billion in tax relief. House Bill 5932 would make everything more affordable, with the vast majority of benefits going to working families.

Unfortunately, Das’ bill was not well received by his own party. The bill has yet to be heard by the Senate Ways and Means Committee. This 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.

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

Here are some other bills under consideration that would help taxpayers:

Thank you!

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

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


mike steel

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