Category: Equity

It’s Time for a Biden-Era Mandatory Housing Affordability Plan

by Josh Feit

The report is out. Mandatory Housing Affordability: Fail.

With such solid results, how can I say that?

It’s true, the numbers are impressive. MHA dollars accounted for 45 percent of the city’s affordable housing spending in 2020, or $52.3 million. (MHA actually brought in $68.3 million total last year, and the city will carry over the additional $16 million in MHA money for 2021 affordable housing projects.)

And while the longtime Seattle Housing Levy’s $56.7 million accounted for more of 2020’s affordable housing spending, 48 percent, MHA actually created 110 more rent-restricted units than the venerated levy—698 funded by MHA versus 588 funded by the levy.

In short, this brand-new inclusionary housing mechanism, which came online in 2019 after five years of old-school neighborhood lawsuits and challenges, more than matched the levy, a 40-year-old property tax program that cost homeowners a median of $122 a year in 2016.

MHA is an affordable housing mandate that upzoned a sliver of Seattle’s exclusive single-family areas while requiring developers to either pay a fee, which goes into an affordable housing fund, or build a percentage of affordable units on site. MHA applies to every new multifamily or commercial building in the city. And it costs you nothing. Oh, and the $52.3 million for 698 units doesn’t even include the 104 on-site affordable housing units that MHA created; the city does not track on-site units as affordable housing dollars.

So, with such glowing stats, why “fail?”

I mean it the same way Obama’s $800 billion stimulus package was a failure and Democrats are now applauding Biden for going big on his $4.1 trillion infrastructure plan. In other words, if we’re getting a nearly-$70 million-a-year bang for our buck on affordable housing dollars from the polite MHA upzones the council passed in 2019, it’s time to do a Biden and go bigger.

If a bumper-bowling upzone was able to create a fund comparable to the Housing Levy without raising any taxes, imagine what a grown-up upzone would do for affordable housing.

MHA only upzoned 6 percent of the city’s single-family zones, which make up around 65 percent of the city’s developable land. Under MHA, the city also did some earlier upzones between 2017 and 2019 in parts of six  neighborhoods where some density was already allowed, such as downtown, the University District, South Lake Union, and 23rd Avenue in the Central District

Back when the council passed the final pieces of MHA two years ago, the city’s two at-large council members, Lorena González and Teresa Mosqueda, were already playing Elizabeth Warren to the mayor’s Larry Summers. Caving to pressure from the slow-growth Seattle Times, former mayor Ed Murray scrapped his initial MHA upzone proposal, which would have raised the ceiling on height regulations in single family zones at large.

“For some, this housing affordability legislation goes too far,” González said from the council dais when the council passed MHA in March 2019, “for others it does not go far enough.” It was clear which side González was on. “So, let’s chat a little bit about that dynamic,” she said. “Contrary to the name of the Select Committee on Citywide MHA, this legislation is not even close to citywide. This legislation impacts a total of only 6 percent of existing areas currently and strictly zoned as single family home zones. That means even with the passage of MHA legislation, approximately 60 percent of the city of Seattle is still under the cloud of exclusionary zoning laws.” She went on to give a history lesson of racist housing covenants in Seattle.

Councilmember Mosqueda sounded the same note. “I’m sad that we’re not actually having a conversation about citywide changes,” she said. “I think that’s the next conversation to have. Larger changes that create a more inclusive Seattle. Again, this is just an effort to look at 6 percent of the single family zoning in our city.”

González is running for mayor this year, and Mosqueda is backing her. Here’s hoping González is actually committed to doing something about “the cloud of exclusionary zoning.” Not only because it will help create a more inclusive city, but according to the numbers, it would be good affordable housing policy.

Think about it. If a bumper-bowling upzone was able to create a fund comparable to the Housing Levy without raising any taxes, imagine what a grown-up upzone would do for affordable housing. While we created 1,300 units last year, we should be building a total of 244,000 net new affordable homes by 2040, according to the King County’s Regional Affordable Housing Task Force, or about 12,000 a year.

Another important stat, one that’s not in the report: $10 million of all MHA proceeds to date have come from developments within the sliver of city land that used to be zoned exclusively single-family.

Upzoning the rest of the city—the part that remains exclusively single-family—would certainly help. Another important stat, one that’s not in the report: $10 million of all MHA proceeds to date have come from developments within the sliver of city land that used to be zoned exclusively single-family.

This is noteworthy. Here’s why. There are three main streams of MHA money: first, payments from developments in selected multifamily hubs that became subject to MHA in 2017, including parts of 23rd Ave. in the Central District, the University District, and Uptown; next, payments from developments in all multifamily zones, from the new MHA legislation that took effect in 2019; and also payments from developments in the upzoned sliver of former single-family zones.

Over the four years between 2016 and 2020, the hub upzones, which went into effect earlier, have generated about 60 percent of the money from MHA, most of that in 2020. But since 2019, when MHA dollars started flowing in from the multifamily areas and the former single-family areas, nearly a third of the additional money from those new revenue sources—$10 million of $36 million remaining total—has been from development in the sliver that used to be single-family.

That outsized stat indicates just how attractive these formerly verboten zones, which sit on the edges of existing urban centers and urban villages, are for new housing. If we actually upzoned all of the city’s exclusive single-family areas, instead of just six percent, we’d have a better chance at generating the money to build the affordable housing stock this city needs.

While the upzoned former single-family zones did generate $10 million for affordable housing, there is another MHA fail. None of the on-site MHA housing was built in those areas. That needs to change. Opening up the entire city to multifamily housing, as opposed to the begrudging 6 percent allotted in MHA, would create more options for on-site multifamily development in these zones themselves. Hopefully, the next conversation about upzones will address how to actually put multifamily housing in amenity-rich SFZs.

The name of this column is Maybe Metropolis. My verdict on MHA?  Emphasis remains on “maybe” until we do mandatory housing affordability right and make it actually citywide.

Josh@PubliCola.com

Community Groups Support Equitable Development Staffers; Sidran Opposes “Compassion Seattle”

1. Members of Seattle’s Equitable Development Initiative board, along with dozens of community organizations, signed a letter of support for two EDI leaders at the city’s Office of Community Planning and Development who wrote a scathing letter late month accusing Mayor Jenny Durkan and OCPD of emotionally abusing EDI staff while sowing division among the communities EDI is supposed to support.

“As community stakeholders and EDI Board members, we… have witnessed the emotional labor required of EDI staff, valued for their deep ties to community, but directed to lead this program in a way that has perpetuated inequities for those it purports to serve,” the letter of support says. “The City of Seattle, OPCD, and the EDI must do better by BIPOC staff and community organizations.”

EDI manager Ubax Gardheere and EDI strategist Boting Zhang wrote an open letter last week saying they were taking a “mental health break” from the city. “Our bodies have been weaponized in an institution that historically and presently has actively fought against you, and you have sensed this,” they wrote.

The Equitable Development Initiative began in 2015 under then-mayor Ed Murray as a revolving fund intended to advance community-led projects in areas of the city with a high risk of displacement and low access to opportunity. None of four demonstration projects that were chosen to launch the initiative have been built.

By saying “it is city policy” to avoid dispersing people unless they’re impeding the use of public spaces, the former city attorney argues, the amendment will make it impossible for the city to sweep anyone, including, potentially, someone who is “blocking traffic by pitching a tent in the middle of 5th Ave. downtown.”

During last year’s budget process, Durkan proposed eliminating a long-promised $30 million fund to pay for EDI projects out of the proceeds of the Mercer Megablock sale, citing the pandemic; the council restored the funds, but EDI proponents saw Durkan’s willingness to defund the initiative as a betrayal.

Since then, the mayor has appointed her own Equitable Communities task force to recommend spending priorities for $100 million in investments in BIPOC communities, which includes the $30 million; some advocates have criticized the makeup of the task force, saying it is composed largely of Durkan allies and groups that are seeking a slice of the money.

“When she set up the task force, a lot of people didn’t want to join,” Yordanos Teferi, of the Multicultural Community Center, recalled. “And then we learned that those who did join the task force were not coming into the process trying to advocate for communities at large—they were just advocating for their own projects or their own organizations.” The MCC, along with Africatown, the Ethiopian Community in Seattle, Puget Sound Sage, Friends of Little Saigon, and more than two dozen other groups, signed the letter of support.

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2. Former Seattle city attorney Mark Sidran—best known for defending the Teen Dance Ordinance, impounding people’s cars over expired driver’s licenses, and, oh yeah, supporting a zillion laws aimed at criminalizing homelessness—opposes the Compassion Seattle Charter initiative. Continue reading “Community Groups Support Equitable Development Staffers; Sidran Opposes “Compassion Seattle””

Tax Opponents File Lawsuit Against Capital Gains Tax. Democratic State Senator Says Bring it On

Youtube screenshot.

by Leo Brine

On Wednesday, a conservative think tank, the Freedom Foundation, filed a lawsuit against the hot-off-the-presses capital gains tax (SB 5096) and another conservative group announced they plan to do so as well.

In response, Democratic state Sen. Jamie Pedersen (D-43, Seattle) told PubliCola later Wednesday evening: Bring it on. Lawsuits are “great,” said Pedersen, who chairs the Law and Justice committee, because he sees them as a way to challenge old, anti-tax state supreme court rulings.

During this year’s legislative session, as the Democrats moved the capital gains tax bill through the legislature, Republicans decried it as an unconstitutional income tax. This is now the legal argument against the bill, which Governor Jay Inslee has not yet signed into law.

If the modern-day supreme court was to determine that income is not property, Sen. Pedersen said, it “would change the world for us in Olympia about what’s possible.”

The capital gains tax, which Democrats passed on the last day of this year’s legislative session on a 25-24 vote, with three moderate Democrats and every Republican voting no, imposes a 7 percent tax on financial gains from the sale of intangible financial assets, such as stocks and bonds, above $250,000. About 7,000 Washington taxpayers would pay the tax beginning in 2023.

The Freedom Foundation filed its lawsuit in Douglas County on behalf of seven state residents who would pay the tax. The group claims that capital gains constitute income, making the tax an income tax. In 1933, the state supreme court ruled that income is property subject to the uniformity clause in the state constitution, which says that different types of property—such as income below and above a certain threshold—can’t be taxed at different rates. This ruling has been the basis of claims that an income tax is unconstitutional for nearly a century.

Democrats say the capital gains tax is an excise tax because it’s the sale of assets that triggers the tax rather than the income that the sale generates.

Conservatives don’t buy it. “Capital gains are clearly income. And when you tax them, it’s an income tax — no matter what you choose to call it,” Freedom Foundation CEO Aaron With said in a press release. Continue reading “Tax Opponents File Lawsuit Against Capital Gains Tax. Democratic State Senator Says Bring it On”

House Passes Capital Gains Tax with Rep. Frame’s Key Amendment

by Leo Brine

After a month of deliberations, the House finally passed capital gains tax legislation (SB 5096), including a pivotal amendment proposed by Finance Committee Chair Rep. Noel Frame (D-36, Seattle) that restored protections against a referendum—a public vote to invalidate a bill before it takes effect. Senators removed those provisions when they voted on the original bill in March. The bill now includes two sections that protect it from voter referendum; however, it no longer contains an emergency clause that would have caused the bill to go into effect right away.

Republicans say the capital gains tax is unconstitutional and want to make sure it stays vulnerable to a referendum, which is their safest option for defeating the tax. But the new language puts their hopes in jeopardy. Republicans proposed 19 amendments attempting to remove the protections, dragging the debate from Tuesday evening to Wednesday afternoon.

Even with the protections against referendum in the bill, the tax could still be vulnerable to a voter initiative—which Frame noted are a far more common way to challenge tax policy than referenda. An initiative is a way to repeal legislation, whereas a referendum cancels the legislation before it becomes law. For someone to propose an initiative, they would need to gather a number of signatures equal to 8 percent of the votes cast in the last gubernatorial election. That’s about 324,516 signatures. A referendum only requires half that number.

The capital gains tax imposes a 7 percent tax on financial gains from intangible financial assets, such as stocks and bonds, above $250,000. Frame said the bill will fix Washington’s upside-down tax code by making wealthy residents pay their fair share. Roughly 7,000 Washington taxpayers would pay the tax beginning in 2023.

Frame’s revised version of the bill says the tax “is necessary for the support of the state government and its existing institutions.” Under Article 2 of the state Constitution, this language protects the bill from a voter referendum.

House Finance Committee chair Rep. Frame’s revised version of the bill says the tax “is necessary for the support of the state government and its existing institutions.”

Frame said she added the section clarifying the necessity of the tax because “this is an important function of government that needs to be paid for. I think we’re pointing out that’s what we believe this is.”

When the House was debating the bill Tuesday night, Republicans proposed multiple amendments to remove the protective language. Some amendments they proposed struck the “necessary” section altogether. Others added new sections specifying there was no emergency clause in the bill. Rep. Ed Orcutt (R-20, Kalama) even proposed an amendment that would required the Secretary of State to place a referendum on the bill on the next state general election ballot. All of the amendments failed, but it was clear from the final tallies that some Democrats voted for them.

Frame also added a second, subtler protection against referendum to the bill. The revised bill would direct tax revenue into the Education Legacy Trust Account (ELTA) which helps fund public schools and childcare services in the state. Because the State uses the account to fulfill its obligation to fund public schools, the tax would be necessary to support government and its existing institutions, Frame said.

Frame defended the language in her revised bill, saying during the debate Tuesday night, “we have a paramount duty to invest in K-12 education and early learning and childcare, and this capital gains excise tax is intended to pay for that. That’s it.” Frame said the judiciary branch should determine whether or not there is an emergency clause in the bill, not the legislature.

“It’s not the language that matters, it’s where we’re making our investments—that’s what matters,” Frame said after the House passed her revised bill. “We believe the investments made in this bill are for the ongoing function of government. That’s what the lawyers will look at.”

Republicans tried passing amendments to direct the funds into accounts that do not support state institutions, but their efforts failed.

The House passed Frame’s bill 53-45 and sent it to the Senate.

Senate Majority Leader, Andy Billig (D-2, Spokane) said Wednesday that Senate Democrats would caucus to see if they had the votes to pass the House’s updated bill without making any changes. Otherwise, senators could propose amendments to strip the bill of its protective language. Senators from both sides of the aisle voted for Sen. Steve Hobbs’ (D-44, Everett) original amendment that got rid of the original bill’s emergency clause.

If the Senate passes the bill with the protective language intact, Republicans options to block the bill would be narrowed to filing a lawsuit or hoping for a voter initiative. Senate Republican Leader, John Braun (R-20, Centralia) said during a press conference on Wednesday, senate republicans will work to get rid of the protective. language in the bill. “The idea of limiting people’s right to a referendum is wrong,” Braun said.

Transit Advocates Push for Bigger Multimodal Investment from State

by Leo Brine

Transit advocates tolerated the House and Senate’s transportation committees’ underwhelming 2021-23 biennium budget announcement last month believing that legislators were cueing up a more multimodal approach in the pending transportation package. (The previous budget announcement was about funding earlier commitments made by previous legislative sessions.) However, the House Transportation committee unveiled an all-new 16-year transportation package (HB 1564) on Thursday that, once again, provides large sums of funding for highway expansion projects and road and highway maintenance while shortchanging transit.

Troubled by how few dollars the House allocated for multimodal and green initiatives when compared to the highway-related initiatives, advocates are now hoping for big changes before Democrats move the package to Governor Inslee’s desk.

The new transportation package, dubbed “Miles Ahead Washington,” allocates a total of $22.3 billion to funding transportation initiatives. Seventy percent of the funds ($15.7 billion) go to “highway-related initiatives,” including $6.1 billion for highway expansion projects and $4.6 billion for maintenance and repairs over the next 16 years. Meanwhile, the House allocates about 25 percent of the package, $5.5 billion, to multimodal projects, including investments in multimodal transport, bicycle and pedestrian improvements, safe routes to schools, and rural mobility transit grants.

Mobility rights activists say the new proposal is too similar to past transportation packages, with similar funding shortfalls. “We can’t support it because there’s not enough investment in transit service and in sidewalks and other kinds of pedestrian access,” Anna Zivarts, director of the Disability Mobility Initiative Program at Disability Rights Washington (DRW) said. “It makes it hard to get excited about something that we see as just so far from the unmet needs.”

Continue reading “Transit Advocates Push for Bigger Multimodal Investment from State”

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”

State Transportation Budgets Reflect Bygone Era

 

by Leo Brine

The House and Senate Transportation committees unveiled their transportation budgets (HB 1135, SB 5165) for the 2021-23 biennium Tuesday. Or, more accurately, they unveiled the state’s incorrigible commitment to highway and road expansion. Climate and transit activists hope this is the last budget of a bygone era. While they are unsurprised that the two budgets continue prioritizing road expansions, advocates say the transportation revenue packages expected next week must move away from putting more cement on the ground and move the state’s transportation infrastructure toward sustainability, equity, and climate action.

Tuesday’s Senate and House transportation budgets will each follow the typical process: committee votes, floor votes, and then switching houses. Legislators from both houses will then decide which bill moves forward and will hammer out details in a conference committee.

The Senate’s proposed transportation budget allocates $11.7 billion for various transportation projects and the House allocates $10.7 billion. Both direct money to projects—mostly highway expansions—that were a part of 2015’s transportation package, Connecting Washington.

Funding allocated to construction projects dwarfs funding for expansion of public transit access and green initiatives. For example, the House proposal allocates $453 million to widen I-405 between Renton and Bellevue and more than half a billion to the Puget Sound Gateway project, a massive highway expansion and extension megaproject in Pierce County.

The Senate bill would cut $260 million from the multimodal transportation account to fund Connect Washington and ferry maintenance. The House’s cut to the multimodal account is not as dramatic as the Senate’s—just $50 million, to fund ferry maintenance.

“I think the bigger story is that this budget represents big decisions made in the past. As the legislature continues debating the next transportation package, we need to make sure that it’s oriented toward a sustainable and equitable future.”—Kelsey Mesher, advocacy director, Transportation Choices Coalition

“I think the bigger story is that this budget represents big decisions made in the past,” said Kelsey Mesher, advocacy director at the Transportation Choices Coalition. “As the legislature continues debating the next transportation package, we need to make sure that it’s oriented toward a sustainable and equitable future. And that will look really different, and that will focus on transit, access to transit, maintaining the system we already have, and mitigating harm.”

During the public hearing on the Senate transportation budget, Senate Transportation Chair Steve Hobbs (D-44, Issaquah) groused: “It wasn’t easy last year. Last year sucked, too. This year double sucked.” Hobbs said the priorities of the Transportation committee are “keeping the lights on” by maintaining roads and bridges, keeping ferries and buses operating and finishing Connecting Washington projects.

The transportation budgets are supported by the state’s gas tax, as well as state bonds and, this year, aid from federal pandemic relief funds, the American Rescue Plan Act. Washington’s gas consumption dropped during the pandemic and with it went a good chunk of revenue for the transportation budget. State projections show revenue for the 2019-21 biennium declining by $669 million, roughly 10 percent, and another $454 million in the 2021-23 biennium, about 6.5 percent. Over the next 10 years, transportation revenue is expected to decline by $1.9 billion. The state estimates it will be 10 years before gas consumption rates are back to their pre-pandemic levels.

Anna Zivarts, the director of disability and mobility initiatives at Disability Rights Washington, said the gas tax that props up the transportation budget is regressive. “We all know that the gas tax is at some point going to be an obsolete revenue stream,” she said. “The folks who can afford electric vehicles and not [have to] pay the gas tax are wealthier. And with the cost of living in a lot of communities being high, the people who have to commute further are lower-income” and are spending more on gas, thus contributing more to the system. Zivarts said while the tax is regressive, the state should use gas tax revenues to make the state’s transit infrastructure more equitable and environmentally sustainable.

Continue reading “State Transportation Budgets Reflect Bygone Era”

Democrats in Olympia Pursue Sweeping Agenda to Reverse Regressive Tax Structure

On the docket this year: A carbon tax, plus a wealth tax, changes to the estate tax, and a sweetened beverage tax.

by Leo Brine

Progressive legislators have been unleashing a slew of tax legislation this session, with bills like the capital gains tax (SB 5096) and the working families tax exemption (HB 1297) grabbing headlines after historic floor votes on both earlier month.

And they have more cued up. Legislators typically pass tax and revenue bills late in the session as a means of funding the budget, but this year Democrats have a much bigger agenda: They want to pass tax legislation that reforms how the budget is actually funded. They plan to create new taxes on carbon-dioxide emissions, extreme wealth, data collection, and more this year.

Ingeniously flipping the script on Republicans who say that sudden rosy revenue forecasts prove our tax system doesn’t need reform, progressives say the latest revenue forecast actually highlights the volatility of Washington’s current tax structure. In June, the state forecast a nearly $9 billion revenue shortfall. However, a sequence of higher forecasts based on an uptick in retail sales tax revenue between September and March nearly re-balanced the budget.

Ingeniously flipping the script on Republicans who say sudden rosy revenue forecasts prove our tax system doesn’t need reform, progressives say the budget turnaround is being funded on the backs of low-income residents who pay a disproportionate amount of their incomes in regressive sales taxes.

Seizing on the volatility argument, and noting that the turnaround is being funded largely on the backs of low-income residents who pay a disproportionate amount of their incomes in regressive sales taxes, Democrats are pushing a sweeping tax reform agenda.

At the March 17 revenue forecast meeting, House Appropriations Committee chair Rep. Timm Ormsby (D-3, Spokane) said the revenue increase was not a reason to change course on new progressive tax legislation. “I think we have to be quite concerned about ongoing stability of our revenue system. I think that today’s forecast and other economic news will affect our discussion, but I don’t see a wholesale change in discussion [around tax legislation] in the legislature,” he said.

Wealth Tax

One of the most daring pieces of progressive legislation is the wealth tax bill (HB 1406). Sponsored by House Finance Committee chair Rep. Noel Frame (D-36, Seattle), the bill proposes a 1 percent tax on worldwide “intangible financial assets of more than $1 billion.” Intangible assets include cash, stocks, bonds, pension funds and ownership in revenue-generating partnerships such as businesses. (In contrast, tangible and intangible personal property includes things like as homes, farm equipment and federal and state bonds.) The bill is currently in the house finance committee, where it is awaiting an executive session.

The Department of Revenue estimates the tax will generate an additional $2.5 billion in annual revenue for the state.

Rep. Frame surmises Bezos is already claiming residency in a different state.

One of the main critiques of the bill, along with other bills aimed at taxing the rich, is that people like Jeff Bezos or Bill Gates  could just leave the state and live elsewhere. Rep. Frame said she is not worried about this. Frame told GeekWire in February that based on the DOR revenue predictions, she believes Bezos is already claiming residency in a different state. As for Gates, whose father campaigned for an income tax a decade ago, Frame believes he is too invested in his home state to leave.

Carbon Tax

The legislature is working on several environmental bills this session, including two bills aimed at curbing carbon emissions and greenhouse gases. The Senate Ways and Means committee currently has SB 5126 scheduled for executive committee hearings, while SB 5373 remains in the Environment, Energy & Technology committee waiting for an executive session.

Continue reading “Democrats in Olympia Pursue Sweeping Agenda to Reverse Regressive Tax Structure”

Democrats in Olympia Pass Progressive Tax Credit for Low-Income Residents

Rep. My-Linh Thai (D-41, Bellevue), sponsor of Working Families Tax Exemption bill. Image via House Democrats.

by Leo Brine

Democrats continue to advance a slew of progressive bills this legislative session aimed, they say, at making Washington more equitable. While last week’s headlines dramatized the news that Senate Democrats passed a capital gains tax, a longstanding progressive agenda item,  House Democrats were busy ushering through a major lefty item as well, the Working Families Tax Exemption bill (WFTE). Like the capital gains tax, the WFTE legislation would alleviate the pressure the state’s regressive tax system puts on low-income Washingtonians. In this instance: by giving roughly 500,000 of Washington’s lowest-income residents a tax rebate ranging from $500 to $950.

Both bills are longstanding items on the progressive wish list. The WFTE has existed as a state-level benefit program since 2008, but it was never funded because of the recession that hit late that year. The successful House vote this past Tuesday, March 9,  backed the bill for the first time with dollars from the general fund. That money will be allocated when the house rolls out its budget later this month. The Department of Revenue estimates the program will cost roughly $18 million to administer during the 2021-2023 biennium and pay out $250 million to about 420,000 residents, according to a fiscal note from the Department of Revenue.

“There’s been a large effort from the community to show lawmakers how regressive our tax system is,” said Andy Nicholas, senior fellow at the Washington State Budget and Policy Center. Nicholas says awareness of how regressive Washington’s tax system is has grown over time and now politicians understand the effects of regressive taxes on many of Washington’s underserved communities.

Thai was elected to represent the 41 district in 2018 and became the first refugee in Washington’s history to serve in the house of representatives.

Rep. My-Linh Thai (D-41, Bellevue), the sponsor of the WFTE legislation, represents a former Republican stronghold that gradually shifted to swing turf in the 2000s, before eventually turning blue in the late 2010s.

Bellevue’s population continues to grow more diverse. According to the 2000 U.S. census, Bellevue was a largely white community: 74 percent of the city’s residents were white, with Asian Americans, the second-largest group, making up 17 percent of the population. As of 2018, however, Bellevue is 35 percent Asian Americans and white residents make up 49 percent of the population. Bellevue also has a large immigrant population, with 38 percent of the city’s residents being foreign-born.

Continue reading “Democrats in Olympia Pass Progressive Tax Credit for Low-Income Residents”

Guest Post: The Gas Tax is Regressive and Racist. Let’s End It.

Photo by Alexander Grishin via Pixabay.

By Anna Zivarts and Paulo Nunes-Ueno

Maybe we shouldn’t raise the gas tax. In fact, maybe it’s time to get rid of the gas tax altogether.

That might seem like a strange statement coming from advocates like us, who are firmly aligned with the pro-transit, pro-climate justice, pro-investments-in-equity corner of the political landscape. But as we look at the proposed transportation packages in the legislature this session, we are starting to believe that only a truly transformational approach to funding transportation will allow us to address the harm caused by our current system.

What’s wrong with the gas tax? Well, first of all, it’s regressive. You pay the same amount no matter what you can afford, and if you’re wealthy, you’re likely to own a more fuel-efficient vehicle. In fact, these days, you’re likely to own an electric vehicle and pay no gas tax at all. On top of that, as cities become more expensive, you’re more likely to have a long commute if you’re poor.

And the gas tax is receding: Over the last 20 years, gas consumption has not kept pace with population growth. Sooner or
later, this isn’t going to be a reliable revenue stream.

The gas tax is also restricted to funding highways, thanks to the 18th Amendment to the Washington State Constitution, which was enacted eight decades ago in 1944. Every other type of transportation infrastructure, from light rail lines to local bus service, must come from “unrestricted” sources such as car tabs and other vehicle fees—sources of revenue that, thanks to Tim Eyman, have been under constant threat for a generation.

The gas tax restrictions are redlining on wheels, funneling investments away from BIPOC neighborhoods because of the restrictions in where revenue can be spent

Currently, less than 4 percent of our transportation spending goes toward non-highway projects. In fact, in the last three state transportation packages, these non-highway investments have received a decreasing percentage of the total funding.

Which leads us to why the gas tax is racist. You’ve heard of redlining rules that kept banks from giving mortgages in Black or brown neighborhoods. The gas tax restrictions are redlining on wheels, funneling investments away from BIPOC neighborhoods because of the restrictions in where revenue can be spent. Instead of investing in reliable transit service that would benefit BIPOC communities where people are more likely to be transit-reliant, highway expansion funded by the gas tax directly contributes to increased pollution and negative health outcomes in these same communities.

Over the previous year, Front and Centered and Disability Rights Washington have been conducting listening sessions and interviews with our community members across Washington state, resulting in a report and transportation storymap. We’ve heard so many stories from our communities about how our current transportation system is failing us.

For example, Amanda, from Cowlitz County, shared, “I feel like as a senior in high school I should be able to walk to school on a sidewalk. I have to walk on the road with just a guardrail. It’s scary. I don’t want to get hit by a car on my way to school. This is the reality for other people of color.”

We know that what we are suggesting is a departure from the current transportation consensus, but as we’ve seen throughout the last year, sometimes we need to start thinking about how we can fully dismantle systems that perpetuate inequities.

Currently, the Washington State Department of Transportation (WSDOT) estimates they have less than half of what they need to keep the current highway system in good repair because our elected leaders would rather use gas tax revenue to build new highways and overpasses. With so much unfunded mitigation and basic preservation need, it is inexcusable to expand the system further.

The cost of preserving our highway system must include the costs of mitigating the harm it creates. But even though it’s possible to spend gas tax revenue for this purpose, the legislature has yet to invest the $3.1 billion estimated needed to build fish culverts, so salmon can get past highways. They have not even begun to talk about funding the $5.7 billion that WSDOT estimates is needed to repair the gaps and barriers created in the pedestrian network by the state highways that cut through our communities. For decades, our legislators have underfunded the preservation work needed to keep our highway and bridges from crumbling. And, given the health impacts of dirty air caused by highways and roads, WSDOT should pair road maintenance with air quality monitoring. Continue reading “Guest Post: The Gas Tax is Regressive and Racist. Let’s End It.”