Each week, Trent House AFA's Government Relation's Director, gives you insight into Olympia, providing an update on the week's proceedings.
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Week of February 1-5
How to fund the economic recovery was a significant and divisive topic of discussion this week as members introduced, heard, and passed a variety of bills aimed at directing funds to those hard-hit by the COVID-19 pandemic.
On Monday evening, February 1, HB 1368 (Ormsby, D-3) received a 61-36 floor vote in the House and was heard in Senate Ways & Means the following afternoon. It received executive action on Thursday, February 4 and is rumored to be scheduled for a Senate floor vote on Wednesday, February 10. The bill appropriates $2.2 billion in federal funding from a combination of the federal CRRSA Act, the CRF under the federal CARES Act, and Medicaid for public schools, public health, healthcare, assistance to individuals and families, housing assistance, and business assistance. On the House floor, Republicans argued the bill did not provide enough relief and attempted to amend the legislation to include additional money from the Rainy Day Fund, but majority Democrats held firm preferring to move the bill quickly. Early action is a priority both for legislative Democrats and Governor Inslee. Democrats contend more will be done later in session, perhaps funded by several revenue bills heard this week.
Working Families Tax Credit
On Tuesday, February 2 the House Finance committee heard HB 1297, a bill that funds the working families tax credit. The working families tax credit dates back to 2008, when the Legislature passed a tax exemption for low-income workers, which works similarly to the federal earned income tax credit. Then Governor Christine Gregoire chose not to fund it. In the years since, Governor Inslee and legislators have introduced proposals to fund it, none of which have passed. The bill has bipartisan sponsorship and would give eligible filers a base credit of $500, plus $150 per child (up to three children). Notably, ITIN filers would also benefit. More than 500,000 families would qualify, approximately 1 in 6 Washingtonians. The bill passed out of committee on Thursday, February 4. The companion, 5387 (Nguyen, D-34) was also heard in Senate Human Services, Reentry & Rehabilitation on Thursday, February 4. Like its companion, 5387 attracted a massive crowd of supporters almost no opposition from members of the public. 5387 has not yet been scheduled for executive action.
After HB 1297, the House Finance committee heard a potential funding source for the working families tax credit, the so-called “Wealth Tax,” 1406 (Frame, D-36), a bill that will impose a 1% tax on “extraordinary financial intangible assets” such as cash and cash equivalents; publicly traded options; futures contracts; and stocks and bonds. The revenue would be used to offer credits against taxes paid by low- and middle-income families, start-up and low-margin businesses as well as fund education, childcare, public health, public housing, and public safety. The Department of Revenue estimates approximately 100 Washington billionaires will be impacted. The first $1 billion of assessed value would be exempt. The fiscal note cautioned: There is some litigation risk that the courts would invalidate the wealth tax on the grounds that it is a property tax that conflicts” with the provisions of the state Constitution. The bill has not yet been scheduled for executive session.
Rep. Mia Gregerson proposed two tax bills this week, seeking to fund the digital divide. HB 1450 (Gregerson, D-33) would impose a $2 tax for a wireless smart device with a selling price between $250 and $1,000 or $5 for a device with a selling price of $1,000 or more. The fund would seek to provide computers for students and teaching staff. The proposal is scheduled for executive action in the House Education Committee on Friday, February 12. HB 1460 (Gregerson, D-33) would impose an excise tax of 25 cents per month for each interconnected voice over internet protocol service line, radio access line, or telephone service line. The tax would fund a newly established communication service program for seniors and low-income individuals. The bill is scheduled for a hearing in House Finance on Monday, February 8.
Rep. Tana Senn added another capital gains proposal into the mix this week, HB 1496 (Senn, D-41). The bill exempts the first $200,000 in profit for single taxpayers and $400,000 for joint filers. Capital gains above those thresholds would be subject to a 7% tax rate on the sale of real property and a 9.9% rate on the sale of corporate stocks, bonds, and other high-end financial assets. Exemptions also exist for primary residences sold for $5 million or less; retirement accounts, including IRA and 401K retirement plans; livestock; and the sale of agricultural land and timber. Governor Inslee’s capital gains bill, 5096 (Robinson, D-38) remains in Ways & Means. HB 1496 will be heard in House Finance on Thursday, February 11.
Vaping & Health
On Tuesday, February 2 the House Commerce & Gaming committee heard HB1345 (Pollet, D-46). Among its impacts, the bill bans all flavored vapor products and menthol flavored tobacco products, limits nicotine concentrations of vapor products, requires vapor product ingredient disclosures, establishes a vapor product manufacturer’s license, authorizes local governments to limit the location of vapor product retailers near schools and youth activities, restructures the vapor product tax to be a 45 percent excise tax paid at retail by the customer, imposes a 4.4 percent surcharge on manufacturers and distributers of vapor and tobacco products, and repeals the state preemption of local licensing and regulation of vapor products. Moneys from this tax will be split between the Andy Hill Cancer Research Endowment Fund Match Transfer Account and the Foundational Public Health Services Account. While supported by public health advocates, the bill is opposed by vape and convenience store owners who claim the bill will devastate their businesses and trigger layoffs. The bill has not yet been scheduled for executive session.
Expanding Sports Betting
The Senate Labor, Commerce & Tribal Affairs heard yet another revenue option in SB 5212 (King, R-14) a proposal to expand sports betting outside of tribal casinos on Thursday, February 4. Sports betting was illegal nearly everywhere nationwide until 2018 when the U.S. Supreme Court left it to states to chart their own course. In 2020 the Legislature passed and Governor Inslee signed legislation to legalize betting on professional and college sports (except college teams based in Washington), but exclusively at tribal casinos. Last year, the proposal was met with fierce opposition from Maverick, a Nevada-based company operating several cardrooms in Washington. It seems Maverick hopes to have another chance to expand sports betting outside of tribal casinos in SB 5212. The contentious bill would lift the tribal-only restriction and allow all licensed cardrooms in the state to host sports betting through sports pools and online sports pools. The bill would allow bets to be placed in-person, via self-service machines, or online. The bill also applies a 10% tax on gaming revenue. Senator King, Maverick Gaming, and Teamsters 117 contend opening sports betting up will bring the state much-needed revenue and create jobs, but Washington Indian Gaming Association remains opposed.