Democrats back off longterm care tax

RITZVILLE - Republican efforts to halt implementation of the new longterm care tax on workers in Washington state may be paying off.

For months, Sen. Mark Schoesler, R-Ritzville, has been trying to upend the tax on workers income to pay for a delayed longterm health care benefit. He even prefiled Senate Bill 5503 earlier this month calling on the Legislature to step back from the tax and look at alternatives.

"Many workers won't be able to afford it – people earning an average wage will lose hundreds from their paychecks each year," Schoesler said previously. "Too many people would pay the tax, yet never receive benefits."

Rep. Joe Schmick, R-Colfax, too, has long been fighting for the repeal of the tax on income. He cosponsored House Bill 1594 to repeal the controversial tax.

On Friday, Dec. 17, Gov. Jay Inslee, Senate Majority Leader Andy Billing, D-Spokane, and Speaker of the House Rep. Laurie Jinkins, D-Federal Way, agreed to a delay of Washington Cares Fund taxes on income.

Inslee said his sudden move toward delaying the new tax follows "ongoing discussions with legislators."

According to Inslee, the tax would provide "much-needed care and coverage" for workers facing longterm health care issues, but the bill needs "refinements."

"Therefore, I am taking measures within my authority and ordering the state Employment Security Department not to collect the premiums from this program from employers before they come due in April," he said. "My actions mean that the state will not collect those funds until the Legislature sorts through these issues."

"Many workers won't be able to afford it – people earning an average wage will lose hundreds from their paychecks each year," Schoesler said previously. "Too many people would pay the tax, yet never receive benefits."

"I'm glad that we can take another look at this very controversial proposal," Rep. Schmick said after hearing of the governor's about-face Friday. "It has not much garnered public support at all. We now have a chance to go back to the drawing board."

The delay means employers will not be penalized or fined for declining to withhold the new tax from workers' paychecks.

The long-term care tax was signed into law in 2019 and would have collect a 0.58% payroll tax on those working in private and public jobs in the state. That amounts to a tax of $290 per year on someone earning a $50,000 annual salary for each year they work.

The tax moneys would have been used to establish a fund to provide up to $36,500 in longterm health care benefits beginning Jan. 1, 2025. Those paying into the system would later relocate out of state would lose the benefit.

"It's time for the Legislature to create a joint committee to examine private-market alternatives to this program and look for a better way to provide long-term care in Washington," Schoesler said previously.

Under Schoesler's proposal, a committee would be appointed to study option and review affordability, bundling with a life insurance policy, other insurance options and more and report its findings to the House by July 1, 2023.

"The opposition to this tax is not new," Schoesler said. "When Washington voters in 2019 had a chance to give their opinion through Advisory Vote 20, nearly 63% statewide said the tax should be rejected."

In the 9th Legislative District - the district representing Adams, Asotin, Franklin, Garfield, Whitman and southern Spokane counties – 77.3% of voters opposed the tax, he said. Sen. Schoesler, and Reps. Schmick and Mary Dye, R-Pomeroy, represent the district.

Schmick would rather repeal the entire law than study it.

"If that's not politically feasible, at least we should redraft the policy and start from scratch to make it more equitable, efficient, and economically solvent so that taxpayers down the road don't end up paying more for broken promises," he said.

The state offered an opt-out window for residents who could show they had private longterm care issurance.

But as of Dec. 1, only about 430,000 people had requested an exemption of the tax and benefit.

"Who trusts state government – especially the state Employment Security Department – to manage a program like this effectively," Schoesler asked rhetorically, in reference to the agency's loss of more than $600 million due to fraud while under the direction of Suzy LeVine.

LeVine has since left the post to join the Biden Administration in Washington, D.C.

Author Bio

Roger Harnack, Publisher

Roger Harnack is the owner/publisher of Free Press Publishing. Having grown up Benton City, Roger is an award-winning journalist, photographer, editor and publisher. He's one of only two editorial/commentary writers from Washington state to ever receive the international Golden Quill. Roger is dedicated to the preservation of local media, and the voice it retains for Eastern Washington.

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