Tag: capital gains tax

Olympia Fizz: More Calls for Inslee to Reject Weakened ADU Bill; State Rejects Eyman’s Anti-Capital Gains Tax Efforts

1. A pro-renter outcry against watered-down state legislation emerged this week when two dozen organizations and businesses signed on to a letter, originally drafted by the progressive Sightline think tank; the Sightline letter, which we reported on last week, asks Gov. Jay Inslee to issue a partial veto of accessory dwelling unit legislation that state representatives amended with anti-renter provisions.

Joining Sightline in a mini-rebellion against the House Democrats’ changes? The AARP of Washington, Climate Solutions, 350 Seattle, Amazon, the Washington State Labor Council, SEIU 775, and the Sierra Club, among others.

As we reported, the initial proposal, by state Sen. Marko Liias (D-21, Edmonds), would have banned owner-occupancy for secondary units, such as backyard cottages, allowing renters to live in both single-family houses and their accessory units—opening up exclusive single-family neighborhoods to more people. However, state Rep. Gerry Pollet (D-46, North Seattle) kicked off a House process that led to a radical rewrite, allowing owner occupancy mandates and imposing new restrictions designed to prevent homeowners from renting out their secondary units as Airbnbs.

Joining Sightline in a mini-rebellion against the House Democrats’ changes? 350 Seattle, AARP Washington, Climate Solutions, the Washington State Labor Council, and the Sierra Club, among many others.

“ADUs alone will not solve the state’s housing shortage,” the letter says. “But they are the gentlest way communities can add relatively affordable homes that offer lower income families more choices and allow seniors to age in place.”

2. Coming off yet another major legal loss, anti-tax activist Tim Eyman has stumbled again. The Republican Washington Secretary of State’s office threw out all four of Eyman’s anti-capital gains tax (SB 5096) referendum proposals.

The capital gains tax bill, which passed this year, would impose a 7 percent tax on capital gains of $250,000 or more, but conservatives are already champing at the bit to stop it from taking effect. Earlier this week, two conservative groups filed lawsuits against the bill, arguing that it constitutes an unconstitutional income tax.

Rejecting the measures, Washington State Director of Elections Lori Augino cited the bill’s necessity clause, an amendment added by Rep. Noel Frame (D-36, Seattle), which says that the tax is “is necessary for the support of the state government and its existing public institutions.” This places it outside the scope of citizens’ referendum power, Augino wrote.

Eyman’s referendum method would have been the safest option for conservatives to stop the bill. The other options are a lawsuit or a voter initiative, which requires twice as many signatures—about 325,000, or 8 percent of the votes cast in the last gubernatorial election.

While the lawsuits could also upend the Democrats’ plans, they may also backfire on the conservatives. The Washington State Supreme Court could uphold the tax by ruling that it’s an excise tax, not an income tax. Or they could overturn a 1933 decision that defined income as property, which, under the state constitution, must be taxed at a 1 percent uniform tax rate. If the court overturns that ruling, Democratic lawmakers would finally have the opportunity to pass a graduated income tax in the state.

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”

City Says It’s Too Risky to Turn On Drinking Fountains, First-Time Candidate Sees Fundraising Surge, Capital Gains Tax Passes

Freeway Park water fountains. Photo by Joe Mabel via Wikimedia Commons.

1. Seattle Public Utilities confirmed that the city has only turned on 10 public water fountains downtown (and is working to repair a handful of others in the area), leaving the rest of the city’s public drinking fountains out of service during a pandemic that has greatly reduced access to clean drinking water for people experiencing homelessness.

According to a joint response to questions provided by the Parks Department and SPU, King County Public Health only asked the city to turn on its downtown fountains and “did not recommend turning on the rest of the city’s drinking fountains. Currently they are providing additional guidance about the rest of the city’s drinking fountains, and we will continue to follow their guidance.”

A spokesperson for King County Public Health said that in fact, the health department did ask the city to turn on drinking fountains citywide in response to an outbreak of shigella in late 2020 (which we covered here.) However, the spokesperson said, “When we talked to SPU and SPR about turning on the drinking fountains, they expressed concerns as to how many drinking fountains were fully functioning and the logistics involved in providing routine maintenance and cleaning.”

“Therefore,” the spokesperson said, “we recommended they use a phased approach to turning on the drinking fountains, starting with the drinking fountains in downtown Seattle.

“We’ve seen success in the downtown drinking fountains having been turned on and are now exploring with SPU/SPR having them turn on drinking fountains in additional parts of the city.”

The CDC guidelines the city provided do not appear to contain any recommendation that cities turn off public drinking fountains if they can’t clean them after each use. Instead, they note that there is no evidence COVID-19 can spread through drinking water and suggest cleaning frequently touched surfaces such as drinking fountains once a day.

Public Health director Patty Hayes told the Seattle/King County Board of Health earlier this month that providing access to potable water was one of the health department’s “top priorities,” along with providing access to soap and running water for people to wash their hands, water bottles, and other items. Thirst leads people with no other options to drink water from unsanitary sources, which leads to outbreaks of communicable diseases.

The Community Advisory Group of Seattle/King County Healthcare for the Homeless has been beating the drum about drinking water since the beginning of the pandemic, when they noted in a letter to Mayor Jenny Durkan that “[w]ithout access to clean drinking water, many of our unhoused population are drinking non-potable water which can lead to other public health crises such as the proliferation of Hepatitis A and giardia.” Since then, those concerns have been borne out over and over again.

Asked why the city hasn’t turned on its public drinking fountains outside downtown, Parks and SPU wrote, “SPU and SPR have been following the CDC guidance for drinking fountains safety during the pandemic that recommends cleaning them between uses, and turning them off if this is not possible.”

The CDC guidelines at the link the city provided do not appear to contain any recommendation that cities turn off public drinking fountains if they can’t clean them after each use. Instead, they note that there is no evidence COVID-19 can spread through drinking water and suggest cleaning frequently touched surfaces such as drinking fountains once a day.

The only reference the CDC guidelines make to shutting down drinking fountains comes in a section about large public events. That section says that event planners should “[c]lean and disinfect frequently touched surfaces within the venue at least daily or between uses as much as possible—for example, door handles, sink handles, drinking fountains, grab bars, hand railings, and cash registers.” If drinking fountains, “cannot be adequately cleaned and disinfected during an event,” the guidance continues, event planners should “consider closing” them.

2. Andrew Grant Houston, a first-time candidate who wants to defund the Seattle Police Department, build 2,500 “tiny houses” for people experiencing homelessness, and institute rent control, is currently in second place in the mayoral fundraising race, after a $129,050 contribution drop last week brought the campaign’s total fundraising to $266,758, according to the state Public Disclosure Commission. The vast majority of that—$214,050, according to the city—came in the form of democracy vouchers, a form of public campaign finance in which voters receive $100 to spend on the candidate or candidates of their choice.

Financial momentum like that is unusual for a little-known candidate without connections to the city’s political establishment; it’s also exactly what the democracy voucher program was designed to promote. PubliCola asked Houston why he thought so many people were giving to his campaign. Houston told us he credits his consultant, Prism West, and a strategic plan that places the campaign on track to max out its primary-election vouchers by the end of this week. Under the city’s election law, mayoral candidates can redeem a total of $800,000 in democracy vouchers—half in the primary, half in the general.

Houston said he wasn’t surprised by the haul. “I knew it was going to happen at some point,” he said. “I am someone who is focused on not just hiring the best people, but also really being committed to understanding how we meet our goals.”

That strategy, Houston continued, has included a lot of (masked, socially distant) in-person canvassing, with a focus on several key issues. Police defunding, for example, is a polarizing issue but one that Houston says galvanizes people to give. “Being very clear about defunding the police to invest in community really resonates with people—either you’re for it or against it, and people who are in the affirmative [tend to give],” he said.

According to the PDC, Chief Seattle Club director Colleen Echohawk is the only mayoral candidate who has raised more than Houston; her latest total, according to the PDC, is $297,072.

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3. Senators passed the the state’s first-ever capital gains tax (SB 5096) on Sunday, the last day of the session, after rejecting the bill the previous Thursday. The bill would impose a 7 percent tax on capital gains above $250,000, subject to some exemptions, raising more than $400 million in its first year. The bill passed on the same narrow margin as the initial vote in March, 25-24.

Before the state can begin collecting the tax, it will have to face a near-certain legal challenge from business groups. (Republicans have said they will not file the lawsuit themselves but expect an outside organization to do so._ While Republicans want the tax stopped, they fear that if the state supreme court rules that the capital gains tax is constitutional, it will open the door for a state income tax.

Weekend Fizz: Capital Gains Tax Moves Forward, Council Staffers Unionize, and Echohawk Challenged on Initiative Support

1. The Senate Democrats weren’t ready to sign off on the version of the historic capital gains tax legislation (SB 5096) that House Democrats passed earlier this week. So the bill’s prime sponsor, Sen. June Robinson (D-38, Everett) and Sen. Jamie Pedersen (D-43, Seattle) met with House Finance Committee Chair Rep. Noel Frame (D-36, Seattle) and House Majority Leader Pat Sullivan (D-47, Covington) to hammer out a compromise version.

On Friday evening, Democrats sent the revised version to the Senate. Both of the House’s referendum protections remain intact in this new version: The Democrats preserved language that says the tax is “necessary” for the government to function and dedicated the first $500 million in revenues from the tax to fund the Education Legacy Trust Account, which locks in the “necessity” clause (under the state constitution, education is the “paramount duty” of the state). Any excess revenue from the tax will be dedicated to an account that funds public school construction.

The new tax is expected to bring in about $445 million during the 2021-23 biennium, $981 million in the 2023-25 biennium, and $1.06 billion between 2025 and 2027.

The bill now includes a new tax deduction for people who donate to charity—a GOP idea that had not made it into any version of the bill until now.

After the meeting, Pedersen told PubliCola his Democratic colleagues added the deduction to get enough votes to pass the bill, saying, “Now it looks like we will be able to get it through both chambers.”

2. After more than a year of negotiations, the Seattle City Council’s central staff—a group of about 30 legal, economic, and policy wonks who draft and analyze legislation for the council—have joined the city’s PROTEC17 union.

Among other guarantees, their new contract increases their pay retroactively for 2019, 2020, and 2021 by 4 percent, 3.6 percent, and 2.9 percent, respectively, and bumps up the minimum maximum pay for their positions by the same percentage. Going forward, the minimum pay for a central staffer will be $42.20 an hour, or $87,776, and salaries will max out at $157,060.

3. Last week, mayoral candidate Andrew Grant Houston subtly tweaked one of his competitors, Chief Seattle Club director Colleen Echohawk, for supporting a proposed charter amendment on homelessness sponsored by a group started by former council member Tim Burgess, Compassion Seattle.

“A few people have asked, so we wanted to clarify that, no, Ace has never been formally or informally involved with the organization Compassion Seattle. We cannot speak for other candidates,” Houston tweeted. In response, a Houston supporter pointed out that the Echohawk campaign had apparently taken down a blog post supporting the initiative.

Asked why they took down the blog post, an Echohawk campaign spokesperson responded that the statement featured in the blog post is “all over social media and we’re hosting it on our Adobe Document cloud.” (True.) “So yes, the answer is we had it up on the blog, but took it down because we decided as a campaign to focus communications on social media as it is much more accessible and more people engage with the campaigns social accounts.”

The Chief Seattle Club works to shelter and house homeless Native people in Seattle. Echohawk’s campaign tweeted and did a Facebook post linking the full statement on April 3.

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.

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.

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.

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”

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”

Morning Fizz: OPA Clears Officer in Fuhr Shooting, Dual Campaigns Create Conundrum, and Republican Uses Callous Slur

1. In a report released on Thursday afternoon, Seattle’s Office of Police Accountability (OPA) ruled that Seattle Police Department SWAT officer Noah Zech acted within policy when he shot and killed 24-year-old Shaun Fuhr in South Seattle last April.

On the afternoon of April 29, a woman called 911 to report that Fuhr, while drunk, had violated a protection order, beaten her, and abducted their 1-year-old daughter at gunpoint from Rainier Playfield in Columbia City. When police arrived on the scene, the woman told the officers that her daughter’s life was in danger.

A SWAT team and patrol officers from the South Precinct mounted a search for Fuhr in the nearby Mount Baker neighborhood, following civilian tips and Fuhr’s cell phone location. After a brief chase, during which Fuhr ran with his daughter tucked under his arm, the officers cornered him in a fenced backyard, still carrying his daughter.

Within seconds, Zech shot Fuhr in the head; he collapsed and dropped his daughter, who was uninjured. According to the OPA report, the officers then discovered that Fuhr had abandoned his gun during the pursuit; he was unarmed when Zehr shot and killed him.

Based on body-worn video footage of the incident, the OPA’s investigators concluded that Zech could not see Fuhr’s right hand and believed he was still carrying a gun. For that reason, and because of Fuhr’s “prior violence, repeated non-compliance, and dangerous physical handling of the child,” SPD investigators and OPA director Andrew Myerberg decided that “no further de-escalation was safe or feasible.”

SPD leadership has since maintained that Zech acted primarily out of concern for the child’s safety. Brandy Grant, the executive director of Seattle’s Community Police Commission, argued otherwise on Thursday afternoon, writing in a press release that “in no world should it be acceptable to shoot someone when they have their baby in their arms.”

According to the OPA’s report, when an SPD detective contacted Fuhr’s former partner about the shooting, she, too, expressed anger that an officer fired at Fuhr while he held their child. She also asserted that Zech, who is white, shot Fuhr because he was Black.

Additionally, the woman—who remains anonymous—alleged that SPD’s victim support advocate offered her a $100 gift card and “advised her to stay out of Seattle” to avoid retaliation from Fuhr’s family, who she said were harassing her. PubliCola has contacted SPD to confirm the details of that interaction.

While she declined to give a formal statement to the OPA, Fuhr’s former partner told the OPA that she intended to file a lawsuit against SPD. Though “she did not believe the officers were completely at fault,” she told OPA investigators that she “wanted the police to help [Fuhr], not kill him.”

2. Kate Martin, a neighborhood activist who is well on her way to perennial-candidate status, could fall afoul of Seattle’s rules for collecting democracy vouchers if she continues to pursue separate campaigns for mayor and City Council Position 8. (PubliCola first reported on Martin’s dual-campaign strategy—she actually filed to run for Position 8 twice—a couple of weeks ago). On her campaign page (“Mandate tidiness”; “Prosecute radical rioters”), Martin encourages supporters to donate to one or both of her campaigns, and says she’ll decide which one to move forward with before the filing deadline of May 21.

No one has attempted to run for more than one office in the same election cycle under Seattle’s public campaign-finance rules, which allow voters to allocate public campaign funds to candidates who collect a qualifying number of contributions, with signatures, from Seattle residents. (For mayoral candidates, the qualifying number is 600; for at-large races, it’s 400).

But a similar hypothetical did come before the Seattle Ethics and Elections Commission last year, when SEEC director Wayne Barnett wrote a memo titled “Musical Chairs” posing the question: What would happen if a city council member collected contributions for a reelection bid, then decided at the last minute she wanted to run for mayor?

Asked about the potential conundrum Martin’s run poses, Barnett said only, “I suspect this will end up before the full Commission.” And while Martin’s race(s) present mostly a theoretical dilemma (she has raised no money so far, and raised less than $10,000 in her last race for mayor, in 2013), her decision to seek two races at once raises questions the ethics commission will need to resolve.

3. One quote raised the hopes of progressives Thursday and one raised their ire.

Senator June Robinson told reporters Thursday she would pass whatever amended version of the capital gains tax (SB 5096) the House sends back to the Senate—a possible message to House Democrats that she was open to restoring the emergency clause.

As we’ve reported, the emergency clause would make the legislation invulnerable to a voter referendum, although it could still be canceled by initiative.

“We will pass whatever the house sends back to us,” Sen. Robinson, the bill’s original sponsor, said during a press conference. Continue reading “Morning Fizz: OPA Clears Officer in Fuhr Shooting, Dual Campaigns Create Conundrum, and Republican Uses Callous Slur”

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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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.

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”

House Finance Committee Hears Testimony on Historic Capital Gains Tax Legislation

By Leo Brine

On Monday morning, the House Finance Committee took up Sen. June Robinson’s (D-38, Everett) historic capital gains tax legislation, which the Democratic-controlled Senate passed two weekends ago on March 6.

During the committee meeting, tech industry lobbyists and conservatives tried to slow the bill’s momentum. Tech lobbyists said the legislation, which calls for a 7 percent tax on capital gains of more than $250,000, would cause small tech startups to flee the state. Republicans chimed in, saying the tax wouldn’t merely drive away business, but it would drive away wealthy people and even the tech industry as a whole.

Specifically, the Washington Technology Industry Association (WTIA) testified that the tax will harm small tech-startups’ ability to recruit employees because stock options (which count as capital gains) would likely be taxed when the employee sells them.

According to the WTIA, stock options are a “primary compensation strategy” for startups. By offering stock options, startups can pay their employees lower salaries while allowing them to buy shares of their employer’s company at a low fixed price. Employees can then sell their shares when the company goes public or is bought out.

Molly Jones, vice president of government affairs for WTIA, implied that tech startups would pack up and head out of Washington if the tax passed. “We are concerned that passage of the capital gains tax will further drive founders, startups, jobs and future drivers of employment and economic growth out of our state,” she said. Her association polled startup members and found, she said somewhat obliquely, that 32 percent were “evaluating whether to relocate their headquarters.” She did say specifically that over 10 percent had already begun looking outside of Washington.

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Republicans piled on, saying the bill will drive the state’s wealthiest to uproot and live elsewhere. They also said the tax will eventually start to affect more than the minuscule 0.23 percent of Washington residents the Democrats estimate would be impacted by the tax.

Republicans also foreshadowed their strategy going forward if the Washington State Supreme Court eventually takes up the bill, by labeling it an unconstitutional “income tax” and comparing it to previously failed income and graduated income tax bills.

House Finance Committee Chair Rep. Noel Frame (D-36, Seattle), who told PubliCola last week that the bill is a priority, kept the discussion moving; 100 people signed up to testify, though only 28 spoke. Nearly 4,000 people signed their names into the legislative record, with more than half, 2,380, signing in support.

One Seattle tech worker, Kevin Litwack, who has received stock options in the past, contradicted the spokespeople for his industry by testifying in support of the bill. “Of course, the tech industry pays well,” he said, “but we don’t need a vast fortune.” Litwack said his peers who view taxes as an obstacle to amassing huge amounts of wealth may “take their money and run,” but “even more will come to replace them, drawn by the values of community and shared responsibility that our state embodies. We, not those purely chasing wealth, are the ones you should want here to build Washington’s future.”

None of the Democratic legislators on the committee spoke to the removal of an emergency clause from the bill that would have put the tax in place immediately and protected the bill from voter referendum. Moderate Sen. Steve Hobbs (D-44, Lake Stevens) sponsored and passed an amendment on the Senate side that removed the clause, irking progressives such as Seattle State Sen. Joe Nguyen (D-34, Seattle).

The bill will head to a finance committee executive session for a vote “soon,” Rep. Frame’s office told PubliCola. The Democrats have an 11-6 majority on the committee. From there it would go to the House floor, where the Democrats are also in control.