LIST OF PRIORITIZED LEGISLATION & TALKING POINTS
Budget & Taxes
HB 1189 Tax Increment Financing S Business Duerr Support
• Authorizes local governments to designate tax increment financing areas and to use increased local property tax collections to fund public improvements.
Talking Points
• TIF captures a property’s appreciated value by using its increased property taxes to finance infrastructure improvements that benefit a designated area.
• Local jurisdictions that use TIF benefit from improved public infrastructure, increased economic development, and local job growth.
ESSB 5061 Unemployment insurance C 2 L 21 Keiser Support/Thanks!
• Limits unemployment insurance rate increases by: (1) capping the social tax; (2) suspending the solvency surcharge tax; and (3) relieving certain benefit charges.
• Increases access to benefits by: (1) expanding eligibility for those in high-risk households; and (2) waiving the waiting period when federally reimbursed.
• Makes certain unemployment insurance benefits nonchargeable to employers.
Talking Points
• Businesses did not cause the pandemic and cannot afford increases in experience ratings, the social tax or solvency surcharge, just as they are opening up again.
• At the same time, employees who lost their jobs need an increase in benefits to survive until they can find work again. Thanks for passing this important legislation.
SHB 1095 Emergency assistance/tax C 4 L 21 Walen Support/Thanks!
• Exempts qualifying grants received on or after February 29, 2020, related to a national or state emergency proclamation from state excise taxes.
Talking Points
• Many small and medium-sized business have already closed their doors. Requiring payment of excise taxes on loans and grants could be the final blow to those which have survived.
• The East King Chambers Coalition wrote DOR last spring, requesting agency-request legislation requesting a B&O tax exemption for PPP, but received no commitment. We’re pleased the Legislature has adopted this important measure.
HB 1465 Estate tax H Finance Orwall Oppose
• Makes changes to the Washington estate tax, including increasing the exclusion amount, changing deductions, and making changes to the rates and rate structure.
• Creates the Equity in Housing Account to be funded by 10 percent of revenues.
Talking Points
• Washington already has the highest estate tax in the country at 20%.
• The estate tax is harmful to the state’s economy because it drives investment capital and new jobs from the state.
• Estate taxes result in the concentration of wealth and power into the hands of out of state corporations wishing to avoid our tax.
SSB 5096 Capital gains tax H Finance Robinson Oppose
• An act relating to enacting an excise tax on gains from the sale or exchange of certain capital assets.
• Imposes a 7.0 percent capital gains tax beginning January 1, 2022.
EFFECT OF CHANGES MADE BY WAYS & MEANS COMMITTEE (First Substitute):
• Lowers the tax rate from 9 percent to 7 percent.
• Increases threshold exclusion to $250,000.
• Exempts all sales or exchanges of real estate.
• Replaces sole proprietor deduction with a family-owned small business deduction.
• Exempts the value of goodwill received when a car dealership is sold.
• Deposits the first $350 million in revenues collected each year into the Education Legacy Trust Account and deposits the remainder into a new Taxpayer Relief Account.
Talking Points
• Despite the lowering of the rate from 9% to 7%, increasing the qualifying gross income deduction from $ 6 - $10,000, as well as the elimination of the emergency clause, the legislation still amounts to a backdoor income tax.
• We don’t need the additional revenue to balance the budget, as Washington’s tax receipts have actually increased since the beginning of the pandemic.
• Our economy is still struggling, and the Legislature should focus on doing no harm, rather than creating new ways to tax hardworking individuals and business owners.
HB 1299 Hospitality industry/B&O tax H Finance Vick Support
• Providing business and occupation tax relief to the hospitality industry.
• Provides a preferential B&O rate of 0.3424 percent to businesses engaged in retail hospitality business activities.
Talking Points
• The hospitality sector has been hit extremely hard by the pandemic and will need targeted tax relief to recover. This is a “Main Street Recovery Measure.”
• While this bill did not survive cutoff, we ask our delegation to work with leadership to include the provisions of this legislation in another measure that is still alive.
Economic Recovery
• Authorizes a qui tam action for enforcement of various employment laws under which a relator on behalf of an agency may pursue relief.
• Specifies the distribution of any penalties or damages awarded.
Talking Points
• Relators may claim a large portion of any recovery—up to 40%—plus attorneys’ fees and costs. If the employer prevails in the lawsuit, however, he or she has no right to recover attorneys’ fees or costs.
• State agencies already have the authority to enforce labor and employment laws. A private right of action is not necessary and may result in litigation costing small businesses millions of dollars, with no real benefits to employees.
SSB 5169 Provider PPE reimbursement H HC/Wellness Frockt Support
• An act relating to provider reimbursement for personal protective equipment during the state of emergency related to COVID-19.
• Requires health benefit plans to reimburse health care providers a set amount for personal protective equipment for the duration of the COVID-19 emergency.
Talking Points
• Providers have not been compensated for additional PPE that they have had to purchase during the pandemic and some supplies have gone up in cost 1000 percent.
• Physicians cannot access free supplies and cannot pass the extra cost on to patients. This is the least we can do for the first line responders who places themselves in harm’s way every day.
Housing
SSB 5287 Affordable housing incentives (MFTE) inance Das Support with Concerns
• Authorizes a 12-year extension of existing 8-year and 12-year Multi-Family Property Tax Exemption (MFTE) that is set to expire if they meet certain affordability requirements.
• Establishes a new 20-year property tax exemption for the creation of permanently affordable homes.
Talking Points
• Housing affordability holds the key for continued prosperity on the Greater Eastside. MFTE is the only tool currently available to incentivize the construction of new multifamily workforce housing.
• The new 20-year tax abatement for permanently affordable housing included in the bill will increase opportunities for affordable homeownership.
• However, affordability requirements contained in the bill may actually be a barrier to utilization in some communities. Similarly, the bill includes other cost drivers such as prevailing wage, which may work against the intent of the underlying program.
Transportation
The time priority of the East King Chambers Coalition’s transportation agenda during the 2021 Session, is to secure passage of a statewide transportation funding package. While the state’s general revenue picture has improved, transportation revenues have plummeted due to a dramatic reduction in vehicle miles traveled.
Therefore, we will likely need a statewide transportation package simply to maintain funding for current law projects. With close to $14 billion in unmet needs along the I-405 corridor alone, we have a long way to go.
We ask all Eastside legislators to support a statewide transportation revenue package that will help get people and goods moving again in the Central Puget Sound Area and across the state.
With this in mind, we only list one prioritized transportation policy bill on our list, in part because of the linkage between carbon policy and transportation revenue.
2SHB 1091 Transportation fuel/carbon S Environment Fitzgibbon Oppose
• An act relating to reducing greenhouse gas emissions by reducing the carbon intensity of transportation fuel.
• Directs the Department of Ecology (Ecology) to adopt rules establishing a Clean Fuels Program (CFP) to limit the aggregate, overall greenhouse gas (GHG) emissions per unit of transportation fuel energy to 10 percent below 2017 levels by 2028 and 20 percent below 2017 levels by 2035.
Talking Points
• During a recent hearing before the Senate Environment Committee, the bill report included a table estimating the impact of various carbon reduction scenarios upon the cost of fuel. The CA Air Resources Board Data Dashboard Model estimated that a 10% reduction would result in a range of 9.1 cents to 22.8 cents per gallon, while a 20% reduction would result in an impact of 18.3 cents to 45.8 cents. (See attached).
• Under the above circumstances, it is difficult to estimate the impact of a low carbon fuel standard on our economy, much less the ability of working families to afford to travel to and from work each day.
• Perhaps just as important, unlike a cap and investment system, as currently being considered by the Senate, there is no linkage between a low carbon fuel standard and investing in badly needed transportation infrastructure.