Olympia Fizz: House Committee Passes Wealth Tax, House and Senate Take Action on Tenant Rights and Funding

1. After nearly two months of inaction, the House Finance committee passed the progressive wealth tax (HB 1406) out of committee Wednesday morning. The bill made it out of committee with no amendments, despite Republican efforts.

The wealth tax is arguably the most progressive piece of tax reform legislation this session; the House is taking the lead, while the Senate took the lead on the capital gains tax.

The wealth tax legislation would require anyone with more than $1 billion in intangible financial assets, such as stocks, bonds, or cash, to pay a one percent tax on their worldwide cumulative wealth. The Department of Revenue estimates the tax will affect 100 Washington state taxpayers and generate $5 billion per biennium.

Finance committee chair Rep. Noel Frame (D-36, Seattle) urged her colleagues to vote yes on the bill so the state could begin rebalancing Washington’s tax system, which, according to the progressive Institute on Taxation and Economic Policy, forces the lowest income Washingtonians to spend 18 percent of their income on taxes while the very wealthiest spend just 3 percent of their income on taxes.

“The Washington state wealth tax would take a giant step forward in trying to right that wrong by asking the wealthiest Washingtonians, including some of the wealthiest people in the world, to pay their fair share,” Rep. Frame said.

Members of the finance committee passed the bill 9-7 with Democratic senators April Berg (D-44, Mill Creek) and Larry Springer (D-45, Kirkland) along with all Republican committee members, voting no. PubliCola has reached out to both Berg and Springer for comment.

Patinkin Research Strategies found that 58 percent of Washingtonians support the tax and just 32 percent are opposed. (The pollster gets a B/C rating from 538.)

According to Frame, the legislature will direct revenue from the wealth tax into a dedicated Tax Justice and Equity fund, rather than into the state’s general fund as the bill originally specified. Legislators will use the Tax Justice and Equity fund to support an anti-displacement property tax exemption (HB 1494) that the finance committee also passed Wednesday.

The finance committee passed the wealth tax in their last regularly scheduled meeting of the session. April 2 will be the last day for finance bills to be read into the record on the house floor, leaving little time for the bill to be deliberated on in the Rules committee, which will take up the bill next. If Rules passes it out, the bill will go to the House floor where progressives hope to send it to the Senate.

2. The Legislature’s latest biennial budget proposals made two traditional foes, tenants and landlords, happy—with some footnotes.

In budgets released this week, legislators from the House and Senate allocated roughly $1 billion to new rental assistance and eviction protection programs. (The House allocates $1 billion, the Senate $850 million). The state will use the money to pay off rent debt accrued by tenants during the statewide eviction moratorium and fund legal counsel in eviction cases.

Michele Thomas from the Washington Low-Income Housing Alliance said her low-income tenant advocacy group is happy with the rental assistance funding. “Without rental assistance people will lose housing, no mistake about it,” she said.

However, she added that rental assistance alone would be “insufficient.” Thomas and the Low-Income Housing Alliance want protections for renters who could be evicted by their landlords once their debt is paid. “We need rental assistance and much deeper tenant protections, together. That is how we’re going to protect tenants after the eviction moratorium is over.”

The Washington Multi-Family Housing Association (WMFHA), a group that represents landlords and residential property management companies, said they were supportive of both budget proposals, including rental assistance funding and funding to help arbitrate landlord-tenant disputes. “We really appreciate the house incorporating $1.3 billion in rental assistance and efforts to assist landlords and tenants in the financial component of the renting relationship,” Brett Waller, Director of government affairs for WMFHA, said.

Waller also supports a senate provision that allocates $44 million that includes funding (through SB 5160) for a pilot Eviction Mediation Program in which landlords attempt to resolve disputes with tenants through mediation or negotiation before they go to court to evict them. The proposal also pays for legal counsel for tenants facing eviction. The mediation program already exists in six counties; the new funding  would help expand the program. “We’ve been supportive of those programs and those opportunities and it’s good to see the legislature is considering funding those at the requested levels,” Waller said.

The House also passed legislation in March aimed at mitigating evictions, landlord-tenant disputes, and homelessness. HB 1236 would limit the potential causes for eviction to 16, including failure to pay rent after the moratorium ends; registering as a sex offender during a tenancy; or breaching the terms of a rental agreement. The housing alliance likes the new protections the bill offers renters by specifically identifying (and thus limiting) when landlords can evict tenants. It’s not clear if landlords and tenants agree on this one: PubliCola was not able to reach the WMFHA for a comment on the bill.

The second, and related, housing bill, HB 1277, will start a permanent fund for rental assistance and a fund source for permanent supportive housing by adding a $100 surcharge to the state document recording fee.

Homeless shelters have had to pivot during the pandemic from a congregate model to hotel-based and other non-congregate shelters that give people a place of their own. “That needs to expand and the temporary funding that created those opportunities in some communities across the state needs to be made permanent,” Thomas said.

One thought on “Olympia Fizz: House Committee Passes Wealth Tax, House and Senate Take Action on Tenant Rights and Funding”

  1. Bravo to attempt a more equitable/progressive tax regime — sorely needed. But how in the world does the state plan to unravel the complicated assets of our wealthiest citizens? Their portfolios are packed with very complex investments and contracts — most of which do not have a “market value”, and even “cost” would be difficult to determine. How many lawyers/advisors/accountants do our wealthiest employ? How many of the same will need to be on a government program to even do a poor attempt at calculating wealth? (Better to just ask the “100 richest” to just give the state a donation? Or, just make it a civic penalty to be legally successful.)

Comments are closed.