E-NEWSLETTER: New tax even goes after the ‘Avon Lady’

Hello, Friends and Neighbors!

I appreciate that almost 100 people took 90 minutes out of this past Saturday to attend our town hall at WSU Vancouver. We covered a wide range of issues, and it was clear that some in the audience had very different opinions at times – but that’s no different than what I see within the state Senate! There is no substitute for meeting with people face to face, and it was great that people were so engaged that my conversations continued for quite a while after the meeting had officially ended.

Because my bill to combat vehicle-license fraud moved quickly through the Legislature toward the end of this year’s session, it didn’t get a great deal of coverage from the news media, and many people at the town hall didn’t know it had become law. Once I explained how it’s aimed at people who register their vehicles (or RVs, boats, etc.) out of state to avoid Washington’s fees (click here for more detail), the reaction from the audience was very positive. I expect this will get more attention publicly the closer we get to July 28, when the SB 5362  law takes effect.

For a report on our recent town hall and a link to a video of the meeting, both from ClarkCountyToday.com (also the source of the photo above), click here.

Taxapalooza, Part III: Going after the ‘Avon Lady’

There isn’t enough space in one newsletter to detail the unnecessary tax increases endorsed by the majority party this year, so I’m looking at them separately. The local school-levy tax (SB 5313) and the repeal of the out-of-state tax exemption (SB 5997) were covered in my past two reports; this time the focus is on HB 2158. It’s the largest of the direct tax increases that were passed, estimated to generate another $428 million for state government in the upcoming two-year budget and more than a billion dollars in its first four years. (The school-levy tax is a far larger total but will be imposed at a local level – not directly by the state, like the other increases.)

I don’t know what’s more outrageous about this tax: the number and range of people it hits, or the excuse for raising it. The title of HB 2158 is “creating a workforce education investment to train Washington students for Washington jobs.” In other words, the majority party decided to tie funding for higher education to a huge tax increase. That’s a big turnaround from just four years ago, when Republicans managed – without new taxes – to invest so much in the state’s two and four-year public colleges and universities that they cut tuition! The title also doesn’t let on that the law is about making college free for some in our state (even though Washington’s taxpayer-funded college grant program was already generous compared to other states).

Who will pay more? Amazon and Microsoft, in the category of “advanced computing businesses,” but the biggest hit is to providers of professional services, through a 20% hike in the business-and-occupation tax they pay. That touches a lot of different places in our communities, such as health-care providers (except hospitals); veterinarians; direct sellers such as those who sell Avon, Advocare, Do-Terra, Younique, etc.; financial services such as accountants and tax preparers; photographers; and wholesalers of things like medical and dental equipment or construction materials. I was amazed to learn that even religious and civic organizations (such as Wounded Warriors and the Crisis Pregnancy Center) and animal shelters (such as the Humane Society) aren’t even safe from this. Maybe some of these taxpayers can absorb the extra cost of doing business, but I would expect the burden will ultimately reach you and me.

To top it off, there is no guarantee that the HB 2158 tax revenues will actually go toward training students, no matter what the title of the law says. That money can easily be “swept” and used for something else that has nothing to do with higher education.

So long to a Senate colleague

My previous e-newsletter mentioned how the new laws I co-sponsored include one about the adoption of research animals. Little did I know that two days later the Democrat who prime-sponsored that bill, Guy Palumbo, would resign his Senate seat to become director of government relations for a former employer (Amazon). With a job like that it would be an obvious conflict to also remain in office, so his decision made sense.

Guy was the lead Democrat on the Senate Higher Education Committee when I was its chair in 2017 (see photo), so we got to know each other well, and this year we again served together on the Ways and Means committee. When the local school-levy tax was being debated in that committee I appreciated his concern for charter schools, which set him apart from most on his side of the Senate’s political aisle. I also was grateful that he didn’t hesitate to sign on as lead Democrat co-sponsor of my “Mental Health for Heroes” legislation each of the past three years and gave SB 5428 a quick trip forward through the higher-ed committee this year, when he was its chair.

I figured his experience in business and owning a small business was what made former Senator Palumbo a moderate voice on tax policy and one of the few Democrats who kept a new state income tax from advancing through the Senate this year. However, one of the state representatives who serves that suburban/rural King County district is not so moderate (I knew him when I was a House member), and he’s a strong candidate to be appointed to the now-vacant seat. This may be a case where a single legislator’s departure has long-lasting repercussions at a statewide level, if the majority side tries to push the capital-gains income tax through in 2020 — and I have no reason to think it won’t.

Keep the e-mails and letters and phone calls coming, and say hello if you see me out and around in our district!

Yours in service,