Tag: Noel Frame

Democrats’ Capital Gains Tax Passes First Legislative Hurdle

By Shauna Sowersby

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

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

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

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

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

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

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

Rules Aren’t Censorship, Activists Aren’t Policymakers, and Solutions to Homelessness Aren’t Cheap

1. Seattle city council member Kshama Sawant learned the hard way yesterday that the standard for decorum in the state legislature is not the same as the standard in city council chambers, when state Rep. Noel Frame (D-36, Seattle) cut her off during a hearing on a proposed state capital gains tax yesterday.  Frame is a cosponsor of the legislation, and the prime sponsor on a separate proposal to impose a wealth tax on the richest Washington state residents.

Legislative committees typically hold no more than one public hearing for each bill, and commenters are supposed to restrict their remarks to the legislation on the agenda during the meeting at which they’re testifying.

In her testimony, Sawant mentioned the bill number that was on the agenda before launching into testimony about wealth and income taxes in general, focusing on a theoretical preemption clause in a different bill that hasn’t even been proposed yet—a potential state payroll tax, which some advocates worry could could preempt Seattle’s own JumpStart payroll tax. After about a minute. Frame interrupted, asking Sawant to “keep your comments focused on the bill at hand, please?”

Sawant responded, “It is focused on the bill at hand” and continued reading from her speech about the payroll tax. Frame interrupted two more times as Sawant quoted from a Crosscut article about the payroll tax proposal, accused Frame of “completely suborning the Constitution,” and insisted she had a “Constitutional right” to testify on “every bill that you will talk about focusing on the wealthy and big business.” At that point, Frame cut Sawant’s mic and moved on to the next public commenter.

“She was coming to the committee during a hearing on a capital gains bill to talk about a payroll tax that hasn’t even been dropped yet. It’s just a matter of speaking to the bill. It’s the same type of decorum we try to follow on the floor, and if we don’t focus on the bill at hand, we get gaveled.” — Washington State Rep. Noel Frame

Sawant posted her remarks later in the day, broken up by a large pink box reading “[Censored from this point on].” The charge of censorship prompted Sawant’s fans to dogpile Frame on social media, calling her a “corporate shill” and worse. (Frame, a Bernie delegate in 2016, does not accept corporate contributions—and, again, is sponsoring measures to tax capital gains and personal wealth.)

Ironically, the city council’s own rules require that people testifying before the council limit their comments to items on the council’s agenda, a rule that admittedly tends to be more honored in the breach.

“She was coming to the committee during a hearing on a capital gains bill to talk about a payroll tax that hasn’t even been dropped yet, and she kept referencing wealth, and I was like, ‘The wealth tax hearing was last week,'” Frame told PubliCola. “It’s just a matter of speaking to the bill. It’s the same type of decorum we try to follow on the floor, and if we don’t focus on the bill at hand, we get gaveled.”

As for the issue of preemption: The capital gains tax proposal includes a clause explicitly stating that it does not preempt any other taxes.

2. The city opened two cold-weather shelters on Thursday in anticipation of freezing temperatures, bringing the city’s winter-shelter capacity to about 165 beds. (King County opened a men’s only shelter downtown that will serve another 25.)

Emergency shelter unquestionably saves lives, but it’s worth putting these temporary beds into context: The city lags far behind its own revised schedule to open up 300 federally-funded hotel rooms to people experiencing homelessness, a plan the mayor’s office unveiled before cold weather had even set in last fall. Those 300 rooms are supposed to serve as a temporary way station for 600 or more unsheltered people, who the city plans to move swiftly into permanent supportive or market-rate housing, freeing up rooms for more unsheltered people.

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The mayor’s office and the Human Services Department have been reluctant to release any details about the hotel proposals or even confirm the locations of the hotels, which we’ve reported several times and which the city council has begun discussing openly. The city rejected the Public Defender Association’s proposal to use the Executive Pacific Hotel downtown for an expansion of its successful JustCare hotel-based shelter model because, according to Mayor Jenny Durkan’s office, the PDA’s proposal was too expensive; the city is now reportedly in conversations with the Low-Income Housing Institute, which also responded to the city’s request for qualifications for hotel-based shelters last year.

So what, exactly, is the holdup? I asked Durkan this during a press conference on the winter weather shelters, and she responded by making a hard pivot back to the winter shelters and responding as if I had asked about them—an odd dodge, in my view, since the context for my question was the fact that 300 more people would be inside and warm right now if the hotel shelters had been opened according to the city’s original schedule.

In response to a followup question, Durkan spokeswoman Kamaria Hightower said, “the City is working to implement the shelter surge program and is in active negotiations with hotels and service providers.” (In addition to the Executive Pacific and potentially LIHI, the Chief Seattle Club plans to open a shelter at King’s Inn in Belltown.) “The significant change in weather had us redirect some resources towards emergency weather response but we plan to announce our new partnerships soon.”

Neither council member backed down or gave ground when neighborhood activists tried to goad them (“I can already hear the snarky comments about how it’s called the HOPE Team because you hope they’ll do something!” one man guffawed) and both stayed on message

The delay, which was going on long before yesterday’s cold snap, likely comes down to two issues: Cost and capacity. Every provider who submitted a bid to operate a hotel-based shelter proposed a plan more expensive than the city’s original $17,000-per-bed spending cap. And every provider in the city is stretched thin, as HSD interim director Helen Howell noted in her remarks at Wednesday’s press conference— for example, the city is relying on groups that don’t ordinarily operate emergency shelters, like LIHI, to staff the winter-weather shelters. To run a successful hotel-based shelter program, agencies will either have to hire more staff (which increases) or spread themselves even thinner (which can decrease service quality.)

The Downtown Emergency Service Center’s hotel plan would have entailed moving existing DESC clients from a congregate shelter at Seattle Center rather than taking on a whole new group of residents. The city rejected it as non-responsive because, according to DESC director Daniel Malone, it did not bring a new set of unsheltered people into the shelter system. Continue reading “Rules Aren’t Censorship, Activists Aren’t Policymakers, and Solutions to Homelessness Aren’t Cheap”