Tag: legislature 2021

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

Photo by Alexander Grishin via Pixabay.

By Anna Zivarts and Paulo Nunes-Ueno

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

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

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

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

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

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

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

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

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

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

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

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

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

Democratic State Senate Sends Capital Gains Tax to House

State Sen. June Robinson (D-38, Everett)

by Leo Brine

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

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

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

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

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

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

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

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

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

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

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

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

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