Category: State of Washington

State Wealth Tax Proposal Derailed in Olympia

State Rep. Noel Frame
State Rep. Noel Frame

by Leo Brine

With Democrats firmly in control of all three branches of state government, lefty tax reform advocates hoped for bold legislation this year. Indeed, with newly-elected President Joe Biden—and the crushing COVID-19 recession—making old-fashioned liberal tax policy viable for the first time in a generation, progressive taxation is in vogue in the state legislature.

Kinda. While both the House and Senate included the capital gains tax (SB 5096), a longstanding progressive goal, in their operating budget proposals, a proposed wealth tax (HB 1406), the first of its kind in the nation, is not on track to pass this session.

The wealth tax would require any state resident with more than $1 billion in intangible financial assets, such as stocks and bonds, to pay a one percent tax on their worldwide wealth. The Department of Revenue estimates only 100 Washington taxpayers would pay the tax, which would generate $5 billion annually.

Rep. Noel Frame (D-36, Seattle), the wealth tax’s prime sponsor and chair of the house finance committee, said if Republicans don’t agree to move the bill, she doesn’t want to waste the committee’s time with political theater on a bill that still has a long way to go. 

House Democrats passed the bill out of the Finance Committee on March 31 and sent it to the Appropriations Committee.

Republicans have made it clear they do not support the tax and some Democrats have shown opposition to the bill –two Democratic representatives voted against the bill in House Finance Committee on March 31. While Democrats may still have the votes to move the bill out of Appropriations committee, they’re not sure they’ve got the time, given that it’s this far behind in the process and the committee has Senate bills to consider.

Rep. Noel Frame (D-36, Seattle), the wealth tax’s prime sponsor and chair of the house finance committee, said if Republicans don’t agree to move the bill, she doesn’t want to waste the committee’s time with political theater on a bill that still has a long way to go.  “We’ve asked a lot of our staff, and I’m not inclined to ask them to do more in service of a bill that I don’t, at this moment in time, with 13 days left, see getting across the finish line this session,” Rep. Frame said.

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Rep. Timm Ormsby (D-3, Spokane), the chair of the House Appropriations Committee, said that at this point, bills “are going to need to be agreed to by both sides in order to make it through the process, so we don’t have a show hearing, as opposed to using our time most efficiently for bills that will pass.”

Misha Werschkul, the executive director of the Washington State Budget and Policy Center, said the legislature likely prioritized the capital gains tax because the bill was “developed over several years to have that strong support to move forward.” Continue reading “State Wealth Tax Proposal Derailed in Olympia”

Pandemic Renter Protections on the Line in State Senate

Image via Nicole Macri’s campaign page.

By Leo Brine

UPDATE: House Bill 1236 passed the House Thursday on a mostly party-line vote of 28-21, without the three Republican amendments. The version that passed was a substitute, or striker, by moderate Democratic Senator Mark Mullet (D-5, Issaquah).

Senator Patty Kuderer (D-48, Bellevue) told PubliCola that Sen. Mullet’s striker amendment was necessary to get the bill passed and did not damage the overall integrity of the bill. The amendment didn’t alter the list of 16 reasons a landlord could give for evicting a tenant.

The bill, Kuderer said, “will ensure we transition away from the eviction moratorium using an off-ramp and not a cliff.”

ORIGINAL POST:

A bill that would bring an end to no-cause evictions in Washington (HB 1236) had a confusing day on the Senate floor on Monday. Republicans managed to get three amendments added to the bill, stripping away its protections for tenants facing no-cause evictions and exempting small rental properties from the bill entirely, before it was eventually taken off the floor.

An updated version of the bill is heading to a senate floor vote today.

The legislation lists 16 possible causes for a landlord to evict a tenant. “They’re very expansive,” Representative Nicole Macri (D-43, Seattle), the bill’s primary sponsor, said. “You just need to give a tenant a reason when you ask them to move out.” The causes range from tenants not paying rent, to tenants registering as sex offenders during their tenancy, to the landlord having a “legitimate economic or business reason” for the eviction.

Macri said the bill was informed by various just cause eviction laws and ordinances including the city of Seattle’s, as well as newer ordinances such as Federal Way’s and Auburn’s.

When the bill was introduced on the Senate floor, Republicans introduced three amendments, which all passed the majority-Democratic chamber. Because of the large number of bills the legislature debates at the end of the session, committee chairs and bill sponsors generally caucus with their party members on each amendment, enabling legislators to vote without keeping track of every single amendment. Senator Patty Kuderer (D-48, Bellevue) is the chair of the Senate Housing and Local Government committee and was in charge of informing her colleagues how to vote on the amendments.

“Without just cause [protections], there’s a huge loophole in how pandemic related rent assistance would work. You would just assist landlords in protecting their financial investments”—by paying them back rent—”but it would do nothing to protect housing stability.”—State Rep. Nicole Macri

Senator Marko Liias (D-21, Everett) told PubliCola in a text message that senators discussed all the amendments in caucus, “but with the volume of bills we are debating and the volume of amendments, things can get mixed up.” He said his colleagues would not have voted for the amendments they passed on Monday had they known what they were.

Liias asked for the bill to be taken off the floor, but not before Republicans managed to pass three amendments, including two that were substantive. Senator Chris Gildon (R-25, Puyallup) added an amendment giving landlords the right to evict tenants with “fixed-term leases”—those that do not renew or convert to month-to-month leases after the lease ends— without cause at the end of their lease. Senator Judy Warnick (R-13, Moses Lake) added an amendment that allows landlords to issue no-cause evictions to tenants living in properties with four dwelling units or fewer.

Democrats are trying to forestall a wave of evictions after the state’s eviction moratorium ends on June 30. The House Democrats’ budget proposal includes more than $1 billion for rental assistance to pay back landlords for rent debt that tenants have accrued during the moratorium.

Macri said she has been fighting with Republicans in order to get tenant protection bills passed, but they continue to propose amendments to limit and narrow those protections. She said one reason some lawmakers are not interested in passing comprehensive tenant protection bills is “because many lawmakers have personal experience as small-time landlords.” Lawmakers tend to personalize the policies in the bills because of their landlord experiences, using personal anecdotes to substantiate their opinions that tenant protection bills are harmful,  Macri said.

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If you’re reading this, we know you’re someone who appreciates deeply sourced breaking news, features, and analysis—along with guest columns from local opinion leaders, ongoing coverage of the kind of stories that get short shrift in mainstream media, and informed, incisive opinion writing about issues that matter.

We know there are a lot of publications competing for your dollars and attention, but PubliCola truly is different. We cover Seattle and King County on a budget that is funded entirely by reader contributions—no ads, no paywalls, ever.

Being fully independent means that we cover the stories we consider most interesting and newsworthy, based on our own news judgment and feedback from readers about what matters to them, not what advertisers or corporate funders want us to write about. It also means that we need your support. So if you get something out of this site, consider giving something back by kicking in a few dollars a month, or making a one-time contribution, to help us keep doing this work. If you prefer to Venmo or write a check, our Support page includes information about those options. Thank you for your ongoing readership and support.

Warnick’s amendment to exempt small rental properties from the bill would be devastating to renters outside cities, Macri said, because “basically nobody in rural Washington would have protection.” Outside of major metropolitan areas along the I-5 corridor, she said, rental properties tend to be smaller—more like houses that have been converted to apartments. Even in Seattle, there are more than 26,000 properties with four dwelling units or fewer, according to Edmund Witter at the King County Bar Association’s Housing Justice Project, while there are fewer than 5,000 properties with five units or more.

Gildon’s amendment eliminating protections for people on six-month fixed-term leases is a more far-reaching than moderate Democratic Senator Mark Mullet’s (D-5, Issaquah) striker amendment, which would preserve protections for people on fixed-term leases shorter than 12 months. Mullet worked groups representing housing providers and landlords to negotiate a striker amendment (which incorporates multiple amendments into a single proposal) that waters down the effects of the bill in some of the same ways the Republicans’ amendments passed on Monday did. Continue reading “Pandemic Renter Protections on the Line in State Senate”

Morning Fizz: “Unlikely Alliance” Narrative Falls Flat, City’s Hotel Shelters Aren’t ADA Accessible; and State Moves to Fund Eviction Prevention

1. The Seattle press corps seems to have settled on the narrative that Compassion Seattle, the campaign to amend the city’s constitution to require the city to fund shelter and housing and keep parks and public spaces “clear”) (without providing any new funding for either purpose) is the result of an “unlikely alliance” between groups that don’t usually agree.

A quick look at the two supposed “sides”: of this alliance—on one, the Downtown Seattle Association, a business group; on the other, a list of homeless service providers that operate downtown—quickly reveals that this “unlikely alliance” story is largely an illusion.

The service providers that are supporting the initiative have long histories of working closely with downtown businesses; the directors of both Plymouth Housing and the Chief Seattle Club, for example, is on the board of the Downtown Seattle Association, while the CEO of the DSA is on the board of the Downtown Emergency Center. The Public Defender Association, meanwhile, started its Law Enforcement Assisted Diversion program in collaboration with downtown businesses as well as the Seattle Police Department.

Another indication that Compassion Seattle is primarily a business-led effort, not one emerging from the homeless advocacy community, is the list of financial backers on the PAC’s latest fundraising email. (Political action committees are required to list their top funders on campaign literature.) They are: Downtown developer Martin Smith Inc; downtown and South Lake Union developer Vulcan; Fourth Avenue Associates LP, a large downtown real estate firm owner; and Clise Properties, which owns millions of square feet of downtown real estate; and ex-Microsoft millionaire Christopher Larson.

A quick look at the two supposed “sides”: of this alliance—on one, the Downtown Seattle Association, a business group; on the other, a list of homeless service providers that operate downtown—quickly reveals that this “unlikely alliance” story is largely an illusion.

Larson was one of the largest contributors to 2019’s People for Seattle campaign, whose incendiary attack ads made that year’s city council campaigns some of the ugliest in recent Seattle history. People for Seattle, like Compassion Seattle, was started by former city council member (and anti-panhandling crusader) Tim Burgess.

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Being fully independent means that we cover the stories we consider most interesting and newsworthy, based on our own news judgment and feedback from readers about what matters to them, not what advertisers or corporate funders want us to write about. It also means that we need your support. So if you get something out of this site, consider giving something back by kicking in a few dollars a month, or making a one-time contribution, to help us keep doing this work. If you prefer to Venmo or write a check, our Support page includes information about those options. Thank you for your ongoing readership and support.

2. Although it’s common for unsheltered people to have mobility issues—national data suggest that a very large percentage of chronically homeless people have physical disabilities—neither of the two hotels the city has belatedly opened for unsheltered people is ADA-complaint, and the larger of the two requires guests to walk up stairs to access their rooms.

King’s Inn, operated by the Chief Seattle Club, is the more accessible of the two hotels. CSC representatives said last week that they’ve reserved ground-floor rooms at the motor court-style motel for guests in wheelchairs, elders, and people with mobility impairments; although the motel’s 58 shelter rooms and bathrooms aren’t designed for wheelchairs, they don’t require guests to traverse any stairs.

This isn’t the case at the Executive Pacific—a 155-room hotel that’s accessible only by stairs and has no wheelchair-accessible rooms. (Youtuber Wheelchair Jimmy called it “a hotel to avoid at all costs if you’re in a wheelchair.”). The city of Seattle, not LIHI, selected the hotel, which LIHI director Sharon Lee notes is in a historic building. Asked why the city hasn’t provided any accessible rooms at its hotel-based shelters, Human Services Department spokesman Kevin Mundt told PubliCola, “the City is exploring options for a third hotel and is taking into consideration ADA accessibility.”

Mundt did not directly answer a question about where the city’s HOPE Team (which replaced the Navigation Team) was directing unsheltered people who would be eligible for the hotel shelters but happen to be in wheelchairs, saying only, “As with all shelter recommendations, the HOPE Team works with providers to match available shelter resources with individual service needs.”

3. On Monday, the Senate Ways and Means committee held a public hearing for HB 1277, which would add a $100 surcharge to the state’s document recording fee, which is collected by county auditors; the recording fee is the most significant source of funding for homelessness programs in the state bill. Groups representing landlords, realtors and housing advocates all support the bill. Continue reading “Morning Fizz: “Unlikely Alliance” Narrative Falls Flat, City’s Hotel Shelters Aren’t ADA Accessible; and State Moves to Fund Eviction Prevention”

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”

Participatory Budgeting Plan Is Heavy on Overhead, Seattle Rep. Macri Schools Suburban Cities, and Emails Confirm Durkan Audit Directive

[REDACTED]: Emails confirm Durkan directive.
1. In what may be a final act before the wheels of the citywide participatory budgeting process begin to turn, the Black Brilliance Research Project’s (BBRP) team—specifically, longtime research leads Shaun Glaze and LéTania Severe—are working with the Seattle City Council to develop a spending plan for the participatory budgeting rollout. The city plans to use participatory budgeting to select programs that will replace some functions of the Seattle Police Department.

Any money the city spends on staffing and infrastructure for participatory budgeting will come out of the $30 million set aside in the city’s 2021 budget for PB; that means it will reduce the dollar amount available to finance the projects for which Seattle residents will eventually be able to vote.

A draft spending plan written by the BBRP team outlines $8.3 million in overhead costs—roughly 28 percent of the project’s total budget, and 40 percent more than the entire budget of Seattle’s Office of Civil Rights. The BBRP’s final report to council also suggested setting aside another 20 percent of the budget to cover any unexpected future costs, which would leave just under $16 million to pay for project proposals.

The largest portion of that spending would go to 35 staff members, all identified as “Strategic Advisor 2″-level employees (a city employment tier that comes with a six-figure salary), including a seven-person steering committee to set the rules and procedures for participatory budgeting as well as 25 full-time members of five “work groups” who will provide administrative support to the steering committee.

The draft spending plan also outlines plans to address inequitable access to the internet that might hinder efforts to give BIPOC and low-income residents a voice in the participatory budgeting process. Some digital access-related budget items fit within the current $8.3 million spending plan, but others don’t, including a $2.75 million program called the “Digital Navigator Program” that would involve hiring 50 people to provide one-on-one “assistance in getting to and using online resources, low-income internet [and] device programs, and developing digital skills” to BIPOC residents.

The BBRP and its supporters are still advocating for the city to spend additional dollars to the participatory budgeting process. At the moment, their focus is on a proposal before the council’s Public Safety Committee to cut $5.4 million from the Seattle Police Department’s budget to account for an equivalent amount that the department overspent in 2020. In an email sent on Monday, supporters of the participatory budgeting process suggested that the dollars taken from SPD’s budget could enable the city to hire the team of digital navigators, among other expenses. 

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If you’re reading this, we know you’re someone who appreciates deeply sourced breaking news, features, and analysis—along with guest columns from local opinion leaders, ongoing coverage of the kind of stories that get short shrift in mainstream media, and informed, incisive opinion writing about issues that matter.

We know there are a lot of publications competing for your dollars and attention, but PubliCola truly is different. We cover Seattle and King County on a budget that is funded entirely by reader contributions—no ads, no paywalls, ever.

Being fully independent means that we cover the stories we consider most interesting and newsworthy, based on our own news judgment and feedback from readers about what matters to them, not what advertisers or corporate funders want us to write about. It also means that we need your support. So if you get something out of this site, consider giving something back by kicking in a few dollars a month, or making a one-time contribution, to help us keep doing this work. If you prefer to Venmo or write a check, our Support page includes information about those options. Thank you for your ongoing readership and support.

2. Representative Nicole Macri (D-43, Seattle) is working to pass legislation (HB 1220) that updates the Growth Management Act with rules that would require more affordable housing stock. The bill says Washington cities should plan for upcoming growth by requiring cities to incorporate affordable housing into their comprehensive plans.

However, representatives from several suburban cities, including Renton and Auburn, testified against sections of the bill that would prohibit jurisdictions from banning homeless shelters and transitional housing, as the city of Renton effectively did earlier this year. The bill would prohibit such bans in any area where other types of short-term housing, such as motels, is allowed. Critics argue that the bill is an overreach of state authority, and cities should be able to deal with homelessness as they see fit.

Macri doesn’t buy it. “It seems like local control hasn’t led to inclusive zoning in the last 50 years, so why would I think that it would [now]?” she said, adding that while planning for more housing to accommodate growth is “good policy,” the proposed affordable housing mandates make the policy “real.”

Even though the bill passed the House on March 3 with unanimous Democratic support, Rep. Macri says she’s still worried about how the bill will fare in the Senate. Rep. Macri is currently trying to have conversations with cities, trying to find out what resources they need to “be inclusive to all people in all the zones where [cities] currently allow some people.” She says those conversations are not going great.

On March 11, the Sound Cities Association, which represents suburban cities, sent a letter opposing the bill signed by the mayors of Vancouver, Renton, Sammamish and 21 other mid-sized cities. The Sound Cities Association is a major player in the new King County Regional Homelessness Authority, which is supposed to devise a region-wide approach to homelessness.

Conversations with the mid-size cities started out fine, Macri said, but as the legislation continued to move, cities kept coming up with new objections to the bill, before finally acknowledging their real beef, which Macri paraphrases as: “We don’t want certain kinds of people in certain kinds of neighborhoods because they can’t meet those people’s needs.”

Seattle’s City Council and Mayor Jenny Durkan both sent letters to Seattle’s legislative delegation last week expressing their support for the bill. “All cities play a part in establishing affordable housing and remedying the homelessness crisis that is gripping our county, our region, and our state, and appreciate your support for HB 1220,” the council wrote.

3. Records obtained through a public disclosure request, though heavily redacted, appear to confirm that it was Mayor Jenny Durkan’s office, not Department of Finance and Administrative Services director Calvin Goings or finance director Glen Lee, who decided to pressure the state auditor’s office to expand the scope of its performance audit of the city council’s contract with the Freedom Project, which served as the “fiscal agent” for the initial $3 million participatory budgeting research project. Continue reading “Participatory Budgeting Plan Is Heavy on Overhead, Seattle Rep. Macri Schools Suburban Cities, and Emails Confirm Durkan Audit Directive”

State Legislation Could Improve Daunting Protection Order Process

(Source: King County Superior Court)

By Paul Kiefer

Brenda recognized the sound of her daughter’s abuser’s truck as he sped past their small family home on a residential street in Tacoma. When he reached the end of the block, he turned around and did it again. Brenda opened the curtains to watch him pass. “He slowed down,” she recalled, “and he stared at me.”

This was far from Brenda’s first run-in with the man who has tormented her daughter for more than a year. But after his harassment forced her daughter to move back home—he fired a flare gun into one apartment where she lived and tore the door off another—Brenda decided it was time to request a protection order from a court.

A civil protection order temporarily forbids an abuser from contacting or following their victim; if the abuser violates the order, they could face fines or jail time.  If a prosecutor chooses not to file charges against an abuser or if the victim decides not to file criminal charges, the victim can turn to a civil court as an alternative source of relief. Courts in Washington can issue six kinds of civil protection orders, each geared toward different types of abuse or harassment.

The harassment had been too overwhelming for her daughter to request a protection order on her own; once the abuser began to harass and intimidate her entire family, Brenda saw an opportunity to ask a court for help. For Brenda, an anti-harassment order was the only option: Because the abuser was her daughter’s former partner, not her own, Brenda couldn’t request a domestic violence protection order. Most civil protection orders are short-term; in some cases, people experiencing abuse can petition for the orders to be effective for a year or longer.

But in counties across Washington, victims of harassment, sexual assault and domestic violence have to navigate a disorienting—and disheartening—bureaucratic maze to receive a protection order. For Brenda, who owns a car, works from home, and could afford the $90 filing fee, the process was still disorienting and time-consuming, though she ultimately received a two-year protection order. For many other people who have experienced domestic violence and their families in Washington, the barriers to filing a protection order have been insurmountable.

“I’ve been at hearings where victims had to stand three to five feet away from someone who may have been trying to kill them for years,” Maria Pintar, a former legal advocate for domestic violence and sexual assault survivors, said.

These barriers primarily impact women: nationally, women are roughly twice as likely as men to experience intimate partner violence, and more than twice as likely to experience stalking; the vast majority of abusers are men. Low-income women, Indigenous women and women born outside of the United States are particularly vulnerable to all forms of harassment and abuse, and the same groups also face the most significant barriers to accessing civil protection orders.

Lawmakers in the Washington State Senate are considering a bill that many survivors and advocates hope could remedy some of the longstanding flaws in the civil protection order system. The bill, sponsored by Rep. Roger Goodman (D-45, Kirkland) and Sen. Manka Dhingra (D-45), would streamline the process for courts to consider and grant protection orders. “At its core,” Goodman told PubliCola, “this is about improving access to justice.”

Goodman argues that the proposed law would address an array of obstacles to protection orders simultaneously. If passed, the bill would replace the web of state laws that currently govern the civil protection order process with a single law that standardizes not only the procedures for petitioning a court for a protection order, but the paperwork itself: Goodman described a “master petition” that would lighten the workload for petitioners.

Support PubliCola

If you’re reading this, we know you’re someone who appreciates deeply sourced breaking news, features, and analysis—along with guest columns from local opinion leaders, ongoing coverage of the kind of stories that get short shrift in mainstream media, and informed, incisive opinion writing about issues that matter.

We know there are a lot of publications competing for your dollars and attention, but PubliCola truly is different. We cover Seattle and King County on a budget that is funded entirely by reader contributions—no ads, no paywalls, ever.

Being fully independent means that we cover the stories we consider most interesting and newsworthy, based on our own news judgment and feedback from readers about what matters to them, not what advertisers or corporate funders want us to write about. It also means that we need your support. So if you get something out of this site, consider giving something back by kicking in a few dollars a month, or making a one-time contribution, to help us keep doing this work. If you prefer to Venmo or write a check, our Support page includes information about those options. Thank you for your ongoing readership and support.

Currently, each type of protection order is governed by separate state laws; those laws determine how a victim can petition for a protection order, the court in which they file the petition—either district or superior court—and how courts can modify, extend or terminate protection orders, among other details. The quantity and type of evidence needed for each type of protection order also varies: someone petitioning for a sexual assault protection order would need to divulge the details of the assault, while a person seeking an anti-harassment order does not need to provide a comparable amount of personal information.

Before the pandemic, people seeking domestic violence protection orders in King County faced an uphill battle. “There are only two [superior] courthouses in King County—the thirteenth largest county in the country,” said Mary Ellen Stone, the director of the King County Sexual Assault Resource Center. “Someone might need to take two buses to get to court. It has to be easier than that.” For people in rural counties without a car or reliable public transit, traveling to and from a county courthouse could verge on impossible. Continue reading “State Legislation Could Improve Daunting Protection Order Process”

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”

Ballot Measure Would Reinstate Sweeps, Harrell Joins Mayor’s Race, and Republicans Hedge Bets on Capital Gains

The look on mayoral candidate Bruce Harrell’s face when KOMO TV’s Jonathan Choe asked how he felt about Black-on-Asian crime, given that “you’re biracial, your mother is Japanese American and your dad’s Black”

1. After months of will-he-won’t-he speculation, three-term former city council member Bruce Harrell announced Tuesday that he’s running for mayor. As a well-known political figure who will likely have support from the Seattle business community, Harrell joins the ranks of instant frontrunners in the race, which also includes current city council president Lorena González, Chief Seattle Club director Colleen Echohawk, South East Effective Development director Lance Randall, and city council aide Andrew Grant Houston.

At a press conference outside Garfield High School, his alma mater, Harrell said he would seek public-private partnerships to fund investments in solutions to homelessness, clean up city parks where unsheltered people have taken long-term refuge during the pandemic, and work to “reimagine” the city’s police force rather than defunding it.

In a conversation with Fizz after the announcement, Harrell said the biggest problem at city hall, Harrell said, is a “lack of relationships”—between the mayor and council, the council and departments, and with outside organizations like Seattle Public Schools.

True to his past campaigns (in addition to serving three terms on the council, Harrell ran for mayor in 2013, receiving 15 percent of the primary vote), Harrell focused on style, more than policy, in our conversation. “Quite honestly, I am attracted to a situation that requires rebuilding,” Harrell said. “It’s sort of easy to hop into a leadership position when an organization is going smoothly and is high-performing. It’s a different skill set for someone to consciously jump into a situation that is plagued with dysfunction, and that doesn’t bother me.”

But he did have a few specific policy prescriptions. He said he would work to revitalize neighborhoods including, but not limited to, downtown, by promoting not just brick and mortar businesses but partnerships between small businesses (particularly women- and minority-owned) and larger ones—a kind of “business-to-business on steroids” approach to saving local businesses. “The first thing we must learn how to do is recycle our money within the economy by making sure the relationship between small businesses and big business is intact,” Harrell said.

He also said he would propose divvying up $10 million between the seven council districts so that the council member from each geographic area could determine, through conversations in that community, what local priorities should be funded. Asked how this would differ from the ongoing participatory budgeting process, which is supposed to determine how the city will spend $30 million set aside for alternatives to policing last year, Harrell said, “I think participatory budgeting is a step in the right direction, but what it still doesn’t do, I think, is have each council member directly accountable to their particular constituents in their community.”

Harrell, who grew up in the Central District and often talks about his deep roots in Seattle, provided more details about his platform in an “open letter” Tuesday morning.

2. Another former city council member, Tim Burgess, is preparing to propose a ballot measure that would change Seattle’s constitution (known as the city charter) by directing the city’s Human Services Department to fund mental health and substance abuse disorder treatment, expand access to shelter, and “collaboratively work with other City departments to ensure that City parks, playgrounds, sports fields, public spaces and sidewalks and streets (“public spaces”) remain open and clear of unauthorized encampments.”

The proposal would mandate (but not fund) new shelter and services and reinstate sweeps, including the removal of encampments that pose a “public health or safety risk,” a term that is not defined and would be subject to interpretation.

The proposal does not appear to include a funding plan.

The charter amendment would require HSD to create a plan to provide services to people living unsheltered (along with individual written “service plans” for every person living unsheltered in the city) and would “require the cleaning and removal of unauthorized encampments in public spaces as these services are available.” In addition, any encampment that poses “a public health or safety risk may be immediately removed,” the proposed amendment says.

In plain language, the proposal would mandate (but not fund) new shelter and services and reinstate sweeps, including the removal of encampments that pose a “public health or safety risk,” a term that is not defined and would be subject to interpretation.

It also directs HSD to work with prosecutors, police, and public defenders to create new “diversion” programs for people who commit non-violent offenses; these programs would include unspecificed “treatment programs as an alternative to incarceration.”

Burgess did not respond to a request for comment.

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To place a charter amendment on the ballot, proponents must get signatures from as many registered voters as 15 percent of the turnout in the most recent mayoral election, or about 33,000 people. After that, the city council can choose to enact the amendment, put it on the ballot, or add their own alternative to the mix. This last scenario played out in 2014, when the council proposed an alternative to a preschool initiative that opponents said gave too much power to unions. The council’s winning alternative was sponsored by Tim Burgess.

3. Despite claiming the Democrats’ capital gains tax legislation (SB-5096) would put an unconstitutional law in place, Republicans are worried that if it passes, taking the law to the Supreme Court will backfire and open the door for an income tax.

Luckily for the Republicans, moderate Democratic Senator Steve Hobbs (D-44, Lake Stevens) added an amendment to the capital gains tax during  the Senate vote that stripped the bill of its emergency clause and took out language saying that the revenue from the legislation is tied to government functions. Legislation with an emergency clause, or legislation that includes language saying it’s necessary to support the functioning of state government, can’t be overturned by voter referendum. The removal of both sections clearly signals that opponents prefer to leave the bill open to a statewide referendum, rather than battling over its legality in court. Continue reading “Ballot Measure Would Reinstate Sweeps, Harrell Joins Mayor’s Race, and Republicans Hedge Bets on Capital Gains”

Durkan Administration Asks State to Expand Scope of Audit Into City Council Contract

By Erica C. Barnett

On Monday, the director of the city’s Department of Finance and Administrative Services, Calvin Goings, and the city’s Finance Director, Glen Lee, signed a letter to the State Auditor’s Office (SAO) asking the auditor to expand the scope of its ongoing audit of the contract between the city’s legislative department and the Freedom Project, which served as the “fiscal agent” for a $3 million project to study participatory budgeting and alternatives to policing.

However, PubliCola’s reporting indicates that the letter was written not by Goings and Lee but by Mayor Jenny Durkan’s office—and that Goings and Lee were less than thrilled to sign their names to such a blatantly political series of requests and leading questions.

The letter asks the auditor to look into three new issues: Whether the city auditor should be removed from Seattle’s legislative branch, where (according to the letter) it doesn’t have “adequate independence”; whether it was appropriate for the city council to award a “high-dollar contract … without competition to a non-profit,” the Freedom Project; and whether “laws of the state expressly authorize direct earmarked appropriations for specific entities, and if so, in what circumstances.”

The finance department does not typically get involved in political debates between the legislative and executive branches. In her seven years at the city, council president Lorena González said, “I’ve never seen a letter of this nature to an outside agency.”

In multiple instances, the letter suggests openly that the city council may have broken city and state law by granting the contract in the way it did.

Specifically, the letter suggests that by granting a no-bid contract, the council may have violated the City Charter, and that appropriating funds to a specific entity (in this case, King County Equity Now, via the pass-through contract with the Freedom Project) may have violated prohibitions on earmarks in city law, the charter, and state law.

The first point is a bit ironic, given the mayor’s history of granting noncompetitive contracts, including one to a personal friend who is married to Durkan’s then-deputy mayor.

On the second point, the letter takes a conspiratorial turn, suggesting that the council scrubbed the public record to hide evidence of misdeeds.

“[T]he original legislative documents (since revised and removed from the web), public statements by Councilmember and other records demonstrate that the $3 million dollar appropriation was for the benefit and intended to go to a specific entity,” the letter says.

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Being fully independent means that we cover the stories we consider most interesting and newsworthy, based on our own news judgment and feedback from readers about what matters to them, not what advertisers or corporate funders want us to write about. It also means that we need your support. So if you get something out of this site, consider giving something back by kicking in a few dollars a month, or making a one-time contribution, to help us keep doing this work. If you prefer to Venmo or write a check, our Support page includes information about those options. Thank you for your ongoing readership and support.

“Again, the Executive has not been directly involved in the award of [our] implementation of the contract, as it was wholly in Council’s purview. However, Council has regularly appropriated funding for a specific contractor or provider, and in this case the contract is structured as a pass-through for an entity that was not qualified for the non-profit exemption,” the letter concludes.

“It would be helpful to know whether this type of ‘pass-through’ contracting is a proper use of the non-profit exemption and whether the Executive can award contracts based on ‘earmarks’ by Council or whether doing so would run afoul of the Charter, state law or generally accepted best practices.”

City council president Lorena González told PubliCola that she does not believe the state auditor’s mandate and jurisdiction extends to the city charter or municipal code. “We are certainly aware of several contracts in which the mayor’s office has engaged in no-bid contract practices,” she added, “and it’s interesting to me that FAS didn’t highlight those as additional potential issues.”

A spokeswoman for FAS directed all of PubliCola’s questions to the mayor’s office, which did not respond to several emails seeking responses to questions on Tuesday.

The letter is highly unusual in both its tone and content: The finance department, which oversees many city contracts as well as city facilities, HR, and many other internal aspects of city government, does not typically get involved in political debates between the legislative and executive branches. In her seven years at the city, González said, “I’ve never seen a letter of this nature to an outside agency.”

A spokeswoman for FAS directed all of PubliCola’s questions to the mayor’s office, which did not respond to several emails seeking responses to questions on Tuesday.

González, who is running for mayor (Durkan will not seek reelection), called the letter a “distraction” from the issues Durkan could be addressing in the final months of her term. “I’m just confused about why the Durkan administration is spending time, energy, and resources on this letter… instead of on the real problems facing the city in the remainder of her term,” González said. “This audit was already happening, and it’s going to go through its natural course, and I don’t understand how this letter helps advance our city.”

SAO spokeswoman Kathleen Cooper said the office would treat the letter from the city like any other tip or whistleblower complaint. “We consider everything that comes our way, and if there is an issue of large enough significance … that we think it should be considered in our auditing work, even though we hadn’t included it before now, then we would consider it,” Cooper said.

Capital Gains Tax, Stalled in Previous Sessions, Moves Forward

By Shauna Sowersby

As another major cutoff date in the Washington State Legislature approaches, the once-controversial capital gains tax appears to have more momentum this year than it has since the idea was introduced nearly a decade ago. 

The bill, which is headed for a likely Senate vote today, would impose a 7 percent tax on capital gains—profits on the sale of assets such as stocks—over $250,000.

Legislators have until March 9 to pass the proposed capital gains legislation out of the Senate where it was originally introduced. A variety of factors have changed the prospects for a capital gains tax since similar  measures were initially floated in 2015.

The most obvious factor: the global COVID-19 pandemic.

Senate Majority Leader Andy Billig (D-3, Spokane), tacking to Democrats’ agenda, told PubliCola the bill has more momentum this year than he has seen in previous years for two reasons: uneven economic recovery and a child care crisis that has been “revealed and exacerbated” by the pandemic.

In order to deal with those issues, Billig said, legislators have two goals in mind. First make the tax system more fair. And second: “increase support for families and workers with child care expenses.”

Each year, the first $350 million in revenues from the tax would go into the Education Legacy Trust Account, which would help support schools and access to education. The rest of the anticipated revenue would be put into a new Taxpayer Relief Account. 

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If you’re reading this, we know you’re someone who appreciates deeply sourced breaking news, features, and analysis—along with guest columns from local opinion leaders, ongoing coverage of the kind of stories that get short shrift in mainstream media, and informed, incisive opinion writing about issues that matter.

We know there are a lot of publications competing for your dollars and attention, but PubliCola truly is different. We cover Seattle and King County on a budget that is funded entirely by reader contributions—no ads, no paywalls, ever.

Being fully independent means that we cover the stories we consider most interesting and newsworthy, based on our own news judgment and feedback from readers about what matters to them, not what advertisers or corporate funders want us to write about. It also means that we need your support. So if you get something out of this site, consider giving something back by kicking in a few dollars a month, or making a one-time contribution, to help us keep doing this work. If you prefer to Venmo or write a check, our Support page includes information about those options. Thank you for your ongoing readership and support.

An updated fiscal note issued by the Office of Financial Management reported that only about 8,000 taxpayers would pay capital gains taxes. Those who would owe the tax would have their first taxes due in 2023, producing estimated revenues of more than $522 million, with revenues expected to climb to more than $609 million by 2027.  

There could be other reasons the bill has more support now than in the past. 

A staffer for the Senate Democrats believes there’s been a shift in narrative. The pandemic has laid bare the class divide in the state, the Democratic source said, and Washington state residents have begun to realize the upside-down tax structure is unfair for the working and middle class.

Small business owners are speaking up. During a press conference earlier in the week, Karla Esquivel, owner of the Andaluz boutique in Columbia City, added that the tax would help customers because fixing the regressive tax code would allow them to ultimately have more spending money, which in turn would be beneficial to local businesses.

Another reason the bill actually has a chance to pass the Senate—historically, the place where it hits the skids—is because Democrats have control of the chamber, which was not the case until 2017. Moreover, in the past, some Democrats such as Sen. Steve Hobbs (D-44, Lake Stevens) have been against the capital gains tax. The balance appears to have shifted somewhat, although not entirely. With the debate front and center, some of those Democrats who still find themselves on the fence may have a harder time avoiding the issue.
Continue reading “Capital Gains Tax, Stalled in Previous Sessions, Moves Forward”