Dear Friends and Neighbors,
In my last email update, I discussed two very controversial tax proposals that may come before the Legislature during the 2020 session, which begins Jan. 13. I also gave readers the opportunity to participate in a survey to help me know how citizens in our district feel about these tax proposals.
An income tax in Washington state?
Just to recap, a state Court of Appeals ruling issued July 15 could clear the way for local income taxes and, eventually, state income taxes to be imposed in Washington. The Appeals Court said Seattle's tax on wealthy households is unconstitutional, but so is a 1984 state law banning Seattle and other Washington cities from taxing net income.
Frankly, I don't believe the majority party in the House and Senate would attempt to impose a state income tax in the coming session. It's very controversial. This is a short session — 60 days — as opposed to our longer budget-year sessions of 105-days. Plus, it's an election year.
However, the new Speaker of the House designate has championed a state capital gains income tax for years — including sponsoring House Bill 2156 this year. There is also Senate Bill 5928, which would allow local income taxes.
Pay by the mile to drive your car?
A year-long statewide pilot project to test a per-mile road usage charge is finished. The state Transportation Commission is expected to vote Dec. 17 whether to recommend to the Legislature implementing the program as a way to potentially replace Washington state's gas tax to fund our roads and bridges.
I fully expect this issue to be in front of the Legislature in the 2020 session — and there are many concerns and questions about privacy if you must plug in a mileage tracker to your vehicle, and how a per-mile charge could disproportionately affect people living in the state.
SURVEY – The results are in!
Given the controversial nature of both the income/capital gains taxes and the pay-by-mile proposal, I wanted to see how you and your neighbors felt about these issues. I created an online survey to hear your views. (If you didn't get an opportunity to vote in this survey, I still welcome your comments. My contact information is at the end of this e-newsletter.) The results are in!
INCOME TAX SURVEY RESULTS
- I support an income tax in Washington state (including local/state income taxes, capital gains income tax) – 17.76%
- I oppose local/state/capital gains income taxes in Washington state – 81.31%
Local comments – PRO
- “If we have an income tax, which I think is a good idea, then sales taxes must be eliminated! It is either one or the other. Right now, our sales taxes unfairly hurt lower income households. We have one of the most regressive forms of taxation in the United States.” Gig Harbor resident
- “I support a Washington state income tax. Low income citizens are unfairly burdened by our current tax structure. It's time for the wealthy to pay their fair share and I believe an income tax would achieve this goal. I would also support getting rid of the sales tax upon the adoption of a state income tax. Incidentally, I would consider myself one of the wealthy who would be paying more if an income tax were adopted.” Bremerton resident
Local comments – CON
- “NO new taxes! We have been saying it for over 30 years, only to fall on deaf ears. I want All government to be independently audited to justify their current spending. If our tax system no longer works it MUST be re-engineered from ZERO, not constantly adding new revenue streams. Start over, eliminate the waste and fraud in Olympia. Then build a new system with accountability to the people of Washington state.” Purdy resident
- “As a senior citizen living off of my IRA I strongly oppose any attack on my income levels. I do not support “taxing the rich” notions that politicians usually consider as fair game. If we continue to tax the higher wage earners we are attacking the incentive we have in our system to strive for success.” Key Peninsula resident
PAY-PER-MILE SURVEY RESULTS
Do you support a pay-by-mile road usage charge?
- Yes – 14.95%
- No – 82.24%
LOCAL COMMENTS – PRO
- “Those who use the road the most should pay the most to fund the roads they are using. That's nice if their car gets great mileage, but then they aren't paying their fair share for road maintenance via gas taxes.” Bremerton resident
- “Yes, (I support this) conditionally. Revenues from the gas tax are declining as cars become more efficient, so we need to figure out some way to equitably charge drivers for the impacts of their vehicles on state highways. The tricky part with per-mile taxation is keeping track of it and reporting it. Not sure how that would work.” Gig Harbor resident
LOCAL COMMENTS – CON
- “This is a crock. We have already paid to have the roads and maintenance done. Our gas tax already pays for this and the pay by mile would not only hurt real working families, but add to the ridiculous spending of our tax dollars. The pay by mile, if initiated, would never go away. It is just another tax.” Port Orchard resident
- “WE WILL NOT EVER put anything on our cars to check mileage. We get taxed enough through gas as it is. Were rural for a reason, we want to keep it that way!” Key Peninsula resident
Many thanks to all who participated in this survey. It will be very helpful as I discuss and debate these issues on your behalf in the Legislature.
Preparing for the 2020 session
I am working on several proposals for the coming session in January. They include:
- Business and occupation (B&O) tax exemption for amounts received from providing Medicaid services by health care providers not affiliated with a hospital – This measure would act as an incentive for health care providers not affiliated with a hospital to continue offering services for Medicaid patients. It would also allow these providers to deduct amounts that would have been received from the provision of donated health care services. I originally drafted this as an amendment to House Bill 2158, which significantly increased B&O taxes during the 2019 legislative session. The amendment, however, was not added to the bill.
- Notification of mergers, acquisitions or contracting affiliation between two or more health insurance carriers (House Bill 2170) – This measure, which I co-sponsored earlier this year, would require health insurance companies to provide at least 60 days' notice to the state attorney general before a merger, acquisition or contracting of affiliation takes place. It would help to deter anti-trust monopolies and ensure an open, competitive health insurance market. The bill is similar to House Bill 1607, which requires a written notice be given to the state attorney general at least 60 days before the effective date of a hospital or provider organization acquisition or merger. I prime-sponsored HB 1607, which passed the Legislature and became law this year. You can read more about that bill here.
- Sexual assault group counselors in schools – I am working with the Kitsap Sexual Assault Center to look into securing funding (other than money dedicated for K-12 education) that would provide group therapy for sexual assault victims in our schools. I believe this would reduce teen pregnancies, provide help and healing for young victims, and increase self-esteem.
Mustard Seed Project event provided important input
I wish to thank The Mustard Seed Project of Key Peninsula for hosting a “Coffee with Rep. Michelle Caldier” on Aug. 28. This gave me the opportunity to meet with many of our Key Peninsula senior citizens and discuss issues from the Legislature that affect them most. We had a fantastic turnout.
I am always open for meetings with local constituents and can also be available for speaking engagements. Call my office for an appointment. The number is below.
It is an honor to serve you and the citizens of the 26th Legislative District!