Category: Democratic Party

Democratic Party, Equity, homelessness, housing, income inequality, legislature, Morning Fizz, Renters, Uncategorized

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.

Continue reading “Olympia Fizz: House Committee Passes Wealth Tax, House and Senate Take Action on Tenant Rights and Funding” →

Democratic Party, legislature, State of Washington, Taxes

Democrats Include Capital Gains Tax In Budget Proposals

by Leo Brine

Senate and House Democrats unveiled their operating budget proposals for the 2021-23 biennium late last week. Both budgets included the capital gains tax (SB 5096), signaling that Democrats expect the House to pass the dramatic bill and Gov. Inslee to sign it.

Senators passed the capital gains tax on March 6. The House Finance committee has held a public hearing for the bill, but has yet to pass it out of committee and send it to the House floor. The lead budget writer, Senator Christine Rolfes (D-23, Bainbridge Island), said Democrats included the tax in the budget because the bill had, for the first time, passed the Senate, and “it’s the Senate’s practice to book [earmark] revenue that we passed.”

Representative Noel Frame (D-36, Seattle) said she’s confident the House will pass the bill which she said is why it is included in the House’s proposal. “We booked it in the budget in years past,” Rep. Frame said, “we built it into the budget this year and we are confident it will continue to move.”

Legislators in the House and Senate expect the 7 percent tax on capital gains of more than $250,000, which takes effect in July 2022, to generate more than $350 million a year beginning in 2023. Rolfes said the revenue generated from the tax in the senate’s proposal would eventually help fund the Taxpayer Fairness account, which provides funding for the working families tax exemption for low-income Washingtonians (HB 1297).

Continue reading “Democrats Include Capital Gains Tax In Budget Proposals” →

Democratic Party, legislature, Taxes

Democratic State Senate Sends Capital Gains Tax to House
State Sen. June Robinson (D-38, Everett)

by Leo Brine

For the first time in Washington state history, state legislators had a floor vote on a long-proposed capital gains tax. Even more novel: They passed it.

As expected, on Saturday, March 6, the Senate Democrats, led by Sen. June Robinson (D-38, Everett) pushed SB 5096 through the senate. The bill passed 25 to 24 with most of the Democratic majority, including all of Seattle’s delegation, voting for it. The entire Republican caucus, along with moderate Democratic Senators Steve Hobbs (D-44, Lake Stevens), Mark Mullet (D-5, Issaquah), Annette Cleveland (D-49, Vancouver) and Tim Sheldon (D-35, Potlatch), voted against the bill. A capital gains tax has been part of Governor Jay Inslee’s biennial budget proposals since 2014 and has appeared in every biennial budget proposal since.

The bill proposes a 7 percent tax on capital gains—profits from the sale of stocks, bonds and other long-term assets—over $250,000; the Washington State Department of Revenue estimates that fewer than 20,000 people statewide will be subject to the tax. The bill would take effect in 2022 and an amendment adopted Saturday requires the threshold amount to be adjusted for inflation annually.

The tax excludes capital gains from the sale of real estate, farming and ranching livestock, certain agricultural land sales, timber and timberlands and retirement accounts.

After debating 19 amendments, the senate adopted three, including one that irks progressives; the amendment, inserted in the bill by centrist Sen. Steve Hobbs, struck down the emergency clause that would have protected the bill against a voter referendum.

The other two amendments were proposed by bill sponsor Robinson and another by Sen. Marko Liias (D-21, Lynnwood), respectively.

At most 18,000 people or, roughly 0.24 percent of Washingtonians, will have to pay this tax.

Robinson’s amendment directs the first $350 million collected per fiscal year from the tax to go into the state’s Education Legacy Trust account with the following $100 million going into the state’s general fund. Any more collected would go into a “Taxpayer Relief Account,” which will fund tax breaks for low-income Washingtonians.

Democrats are using the revenue from the capital gains tax to fund another bill the Democratic senate recently passed, a child care bill aimed at expanding affordable child care and early childhood development programs in the state. Democrats say the pandemic has illuminated and exacerbated the issue of unaffordable child care.

That’s certainly good scripting from the Democrats, especially if the legislation goes to a referendum. And there’s no question the pandemic has dramatized inequities in child care. But the pandemic has highlighted all kinds of systemic inequities.

Sen. Liias’ amendment stops people from being taxed twice on real estate sales. Washington’s real estate excise tax (REET) taxes the sale of all real property. To prevent the taxes from stacking, the amendment specifies transactions subject to REET would not also be subject to the capital gains tax.

The most significant amendment, however, was Hobbs’ amendment to strip the emergency clause out of the bill. Hobbs, a moderate Democrat who emerged a decade ago as a sometimes GOP ally during the Republicans’ successful efforts to wrest control from the majority Democrats, said there was no need for an emergency clause; the clause would have put the tax into effect immediately.

There was no floor debate over Hobbs’ amendment. Continue reading “Democratic State Senate Sends Capital Gains Tax to House” →

Democratic Party, legislature, State of Washington, Taxes

Democrats’ Capital Gains Tax Passes First Legislative Hurdle

By Shauna Sowersby

Democrats have proposed several bills this session aimed at taxing the richest Washingtonians, and they passed one of them, a capital gains tax, out of the Senate Ways & Means Committee on Feb. 16, meeting an early session deadline. You can never count out fiscal bills in the state legislature, so some of the other bills, including a wealth tax, could factor in later in the session, but the capital gains tax, SB 5096, now has some momentum.

The bill is being sponsored by Sen. June Robinson (D-38, Everett), at the request of the state Office of Financial Management. Robinson is the Vice Chair of the Senate Ways & Means Committee.

The bill would impose a 7 percent tax on profits of more than $250,000 that result from the sale of certain assets, including stocks, bonds and mutual funds. Unlike a similar capital gains tax that was introduced in the House, Robinson’s version would exclude real estate sales. Other types of capital assets including retirement accounts, timber and certain types of agricultural land would be excluded as well. 

Wealthy households in the state currently only pay about 3 percent of their income in taxes, while the poorest pay more than 17 percent.

Scott Merriman, a legislative liaison for OFM, noted that the measure is a way to balance Washington’s tax code, which is one of the most regressive in the country. In addition to having no state income tax, Washington is one of just nine states that does not have a capital gains tax. Because revenue in the state is heavily dependent on property tax and sales tax, wealthy households in the state currently only pay about 3 percent of their income in taxes, while the poorest pay more than 17 percent, according to a 2018 report by the Institute on Taxation and Economic Policy. 

“This bill is a key part of helping to provide the resources to support the proposed expenditures in the budget for your consideration,” Merriman told the committee.

In Robinson’s bill, $350 million of the yearly revenue from the capital gains tax would go towards the state Education Legacy Trust Account, which would help fund education. The rest, an estimated $200 million, would be put into a new account called the Taxpayer Relief Account, whose exact purpose legislators have not determined.  Continue reading “Democrats’ Capital Gains Tax Passes First Legislative Hurdle” →

Cops, Democratic Party, Featured, Media, Morning Fizz

Morning Fizz: Stranger Editor Nixed, Former County Dems Director 86’d

By Erica C. Barnett

Doing a retro Morning Fizz this morning to round up a few items I haven’t been able to get to.

1. Bailey Stober, the former head of the King County Democrats who lost his position in 2018 due to allegations of sexual harassment, bullying, and financial mismanagement, called police late one Friday night in July to report what he described as a 10-person bar brawl at the Cloud 9 tavern in Kent. According to reports from witnesses, the fight started when security asked Stober to take his feet off a bar stool and he refused. I documented Stober’s downfall as head of the county Democrats—a saga that included misogynistic text messages, thousands of dollars spent on office rent, booze, and boys’ club getaways, and accusations that one of his accusers was an unreliable drug addict—on the Crank.

Stober resigned from his $90,000-a-year job as communications director for the King County assessor in 2018, amid an investigation into whether his behavior as head of the Democrats disqualified him from the position. But he quickly landed on his feet, taking consulting jobs for local campaigns before getting a full-time position as communications director for Kent Mayor Dana Ralph.

Witnesses interviewed by police who arrived at the Cloud 9 around 2 in the morning on July 11 said that after refusing to take his feet off the bar stool or leave the bar when asked to do so, Stober “began yelling that he works for the City of Kent and that he works for Kent PD.” According to the police report, “As [Stober] was proclaiming his employment, he began waving around his City of Kent ID card.”

Stober later told an officer that he had only claimed to work for the mayor, not the police.

At that point, several witnesses told police, someone punched someone else in the face, and a confusing fight between security guards and several patrons who were with Stober ensued.

Stober, according to all accounts, left the bar and went outside to call 911 without getting mixed up in the fight himself. When officers arrived, he told one that “he believed he may have instigated a bar fight without intending to,” according to one officer’s account.

Another officer reported that “[b]efore I could ask any further questions, he stated ‘I already called the Mayor and the Chief.'” Later, the same officer reported, “Bailey was advised he was trespassed from Cloud Nine for life. Bailey said he understood and would not be coming back.

“Bailey appeared to be very intoxicated during this investigation,” the officer’s account continues. “Bailey mentioned he worked for the Mayor’s Office and made comments to myself and other officers’ that Cloud Nine’s liquor license would not be renewed.”

The Kent City Attorney declined to file charges against Stober and the case was closed in early August.

Contacted by email, Kent Mayor Dana Ralph said her office “has reviewed Mr. Stober’s conduct from a personnel standpoint, taken proper disciplinary action, and documented it in his personnel file. We consider the matter resolved.” Ralph did not specify what disciplinary action she took against Stober, and Stober himself did not respond to an email seeking comment.

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2. A Seattle resident has filled a complaint with the city’s Office of Police Accountability against police chief Carmen Best for “using her official position to promote her private affairs.” The complaint centers on Best’s use of the police department’s website to complain about demonstrators who attempted to show up at her house in Snohomish, a small town about 30 miles north of Seattle.

“[T]he time she, and other employees spend on posting the article on the blog, is not a matter for the City of Seattle, and as a resident of Seattle, my tax dollars should not go to waste on this issue outside of the city,” the complaint says. “This is a serious matter, and a full investigation of what resources Carmen is directing to support her private residence needs to come to public attention.”

The complaint bounced around a bit, going to the city auditor’s office and the Seattle Ethics and Elections Commission before landing on OPA director Andrew Myerberg’s desk. Myerberg says OPA is doing intake on the complaint (along with thousands of others stemming from ongoing protests against police violence) now, a process that takes up to 30 days. Once that’s done, the office will determine whether Best violated any city policy and, “even if we close it as a contact log”—a designation that means OPA found no misconduct—”we’ll send some kind of explanation.”

3. Longtime Stranger editor Christopher Frizzelle is no longer employed by the publication. Last week, a majority of the Stranger’s editorial staffers reportedly told upper management it was him—or them. The decision didn’t come out of the blue; according to sources, editorial staffers have been dissatisfied with much of the online content, including daily video messages from people in the Seattle arts scene, and had issues with Frizzelle’s management style.

The paper has not published a print edition since early March, and has downsized dramatically since the onset of the pandemic, laying off all of its print production staff and many editorial staffers. 

Affordability, campaign finance, City Council, Democratic Party, Development, Elections, homelessness, housing, land use, Morning Crank, Taxes

Morning Crank: Public Land for the Public Good

1. City Council member Teresa Mosqueda will introduce affordable-housing legislation that could have major implications for one of the largest land holders in the city, Seattle City Light. Mosqueda’s bill would allow City Light to sell its surplus land to affordable-housing developers for less than market value—all the way down to the amount the city originally paid for the land—and would require City Light to do so if the agency committed to build housing making 60 percent or less of the Seattle median income. (That latter part may be up for negotiation.) For example, if City Light bought a piece of property in South Lake Union 60 years ago for a few thousand dollars, and the land is now worth millions, a nonprofit that agreed to build deeply affordable housing could buy it for the original, decades-old price.

The proposal, if it passes, will mark a significant change in the city’s policy for disposing of excess City Light land, and could invite a court challenge. Currently, the city requires property owned by its electric utility to be sold at fair-market value, thanks to a 2003 ruling striking down a fee City Light imposed to install and maintain streetlights. That ruling found that City Light could not charge ratepayers for any purpose other than providing utilities, and forced the agency to return $24 million to Seattle residents. Mosqueda’s legislation would change this disposition policy. However, Mosqueda’s office maintains that a separate ruling in 2013, in which the state supreme court disagreed with Bellevue developer Kemper Freeman’s claim that it was illegal to build light rail over I-90 because the bridge was built with gas taxes, which are supposed to be spent only on road purposes, establishes a precedent for City Light to sell its property at below-market value once that property is paid off and declared surplus to the city’s purposes.

Separately, Mosqueda’s office says she will introduce legislation that would encourage all city agencies that own surplus land to  give away or sell this excess property for below-market values to public agencies or nonprofit housing providers that agree to use the land to build affordable housing. The legislation comes in response to a new state law, House Bill 2382, passed by the state legislature last year allowing state and local agencies to transfer land to affordable housing developers at little or no cost.  Mosqueda’s proposal would also allow agencies, including nonprofits to exercise this right even if they don’t have all the money in hand or haven’t secured a development partner.

“Through smart management of public land, and using surplus and underutilized public land for the best public good, we can reduce the cost of building the affordable housing our communities need,” Mosqueda says. “This will also help us realize more community-led affordable housing and small-business development” by giving housing providers more time to pull together funding and development plans for properties that become available.

According to the latest city land inventory, there are about 35 pieces of city-owned land larger than 15,000 square feet that are surplus, “excess,” or underutilized, although some are outside Seattle and not all are suitable for housing development.

2. As I noted on Twitter last week, the anti-head tax campaign formed on May 18 and achieved its goal of repealing the tax on June 12. In the course of their brief effort, they spent nearly half a million dollars, according to their latest filing at the city’s Ethics and Elections Commission—more than most of last year’s city council candidates spent in a year-long campaign.

A large amount of that money went to  out-of-town consulting firms, including Scottsdale, Arizona-based firm Morning In America, which was paid $350,000 to gather signatures for the effort to repeal the head tax. Signature gatherers were reportedly paid as much as $6 a signature, belying any notion that the movement to quash a tax that would have impacted nearly 500 high-grossing businesses was primarily a “grassroots” effort. Morning In America, as its name indicates, is a firm closely linked to Republicans; in 2016, the Trump campaign paid Morning In America $256,000 for “ballot access consulting.”
The campaign also paid Swarthmore, PA-based Awareness Analytics Partners $10,000 to target Seattleites with anti-head tax ads on Facebook and Twitter. The firm is also linked to Republicans and right-wing political activism, through its work for individual candidates and national conservative groups such as the D.C.-based Right Way Super PAC. One of the group’s partners, Matthew Elliott, was the head of Vote Leave, the pro-Brexit campaign in England. The campaign was also generous to local burger scion Saul Spady, a political consultant and grandson of Dick Spady, who started Dick’s Burgers. Spady’s consulting firm, Cre8tive Empowerment, received $31,000 for its work on the monthlong campaign to kill the head tax.
3. The state has issued a $24,055 judgment against the King County Democrats for failing to disclose tens of thousands of campaign expenditures and contributions in a timely fashion in 2016, with half of the total suspended if the group doesn’t commit any more violations for the next four years. The judgment, which also includes $12,742 in costs and attorney’s fees, resulted from a series of complaints filed by conservative activist Glen Morgan, who files complaints against Democratic candidates and organizations for violating campaign-disclosure rules—some minor, others significant—in the hope that they will result in significant fines.
As I reported earlier this year, the King County Democrats knew the judgment was coming, but did not know specifically how much they would owe the state. The group was thrown into turmoil earlier this year when its chairman, Bailey Stober, refused to step down after multiple investigations found that he had committed workplace and financial misconduct, including profligate spending on rent, office equipment, and cable service as well as entertainment and travel for himself and his friends. When Stober finally stepped down, after a 13-hour trial in which Stober’s allies turned tables on the woman who accused him of sexual harassment and abusive behavior, insinuating that she was a drug addict who was making up stories to get back at her former boss for firing her, the group had just $3,200 in the bank, with thousands of dollars in outstanding debts.
The group hasn’t filed its latest expenditure reports, so it’s hard to know precisely how much cash they have on hand; at the end of May, they reported raising $3,703 and spending $6,265,  a balance of $13,560, with $3,703 in contributions for the month. Between June 4 and July 6, the group has filed contribution reports totaling just over $1,450. They reportedly plan to pay the judgment in installments.