Tag Archives: payroll tax

STATEMENT — Republican leaders: Call special session to fix or repeal long-term care tax before tax collections begin

Governor’s delay of ‘Washington Cares’ tax won’t prevent January deductions from paychecks

OLYMPIA…In response to new information about how the governor’s delay of the long-term care tax won’t stop tax collections in January, Senate Republican Leader John Braun of Centralia and House Republican Leader J.T. Wilcox of Yelm issued this statement:

“The governor’s announcement last week that the ‘Washington Cares’ long-term care tax would be delayed led everyone to believe that the tax would not be collected from their paychecks come January. State employees received notice that only those who have already been granted an exemption to the program will not have the tax deducted. Otherwise, the tax will be collected as originally planned. How is this a delay? How has the governor helped matters? He hasn’t. The governor’s announcement changed nothing. The only thing it did was publicly acknowledge that the program is a mess.

“We need to go into a special session before the state begins collecting the tax and repeal this bill – even if it’s over the holidays, using virtual technology to meet on short notice. The program is so unpopular that more than 400,000 Washingtonians applied for an exemption and thousands of others want out but couldn’t get a private policy before the deadline. Why? Because the way the law is written drove insurance carriers to pull out of Washington.

“Under the current law, it is legally questionable if anyone who has the money deducted from their paycheck won’t receive it back – not even if they are granted an exemption. People are angry. The governor stands to make them even angrier if he fails to have the legislative branch address this before January 1.”

Legislature sends Braun’s taxpayer-protection measure to ballot

Proposed constitutional amendment would bring stability to long-term care fund

OLYMPIA…More than a year before Washington workers are required to begin paying into a long-term care fund, Washington voters will have an opportunity to direct those payroll-tax dollars into investments that could strengthen the fund while protecting taxpayers.

Late Thursday night the House of Representatives easily passed Sen. John Braun’s proposed constitutional amendment authorizing the future payroll-tax revenue to be invested in stocks and bonds. The Senate had approved Senate Joint Resolution 8212 in mid-February; the measure, signed today by the president of the Senate, will bypass the governor and go directly to the secretary of state for placement on this year’s general-election ballot. Collection of the tax for the long-term care program, which was adopted in 2019, will begin in 2022.

“I understand the concerns about the cost of long-term care but I absolutely disagreed with the majority’s position that a new tax on workers and a new government program are the answer. It was a bad idea to start with, but it would be even worse if the long-term care program went upside-down financially – and we know from the new paid family leave program how things may not go according to plan,” said Braun, R-Centralia and Senate Republican budget leader.

“Workers shouldn’t have to be faced with paying more tax or receiving fewer benefits than were promised, and taxpayers shouldn’t be forced to backfill a deficit in the program. Investing the money collected from the payroll tax through the State Investment Board – just like the public pension funds – is our best shot at making sure the program remains solvent. I’m grateful for the strong support this proposal received from both sides of the aisle.”

The average return from investments made by the state treasurer is 2 percent, significantly less than the 5.3-percent rate of return necessary – based on projections – to keep the long-term care fund solvent. Washington’s constitution prohibits the state from having equity investments, meaning stocks and bonds. However, voters have amended the constitution over the years to allow equity investments of certain funds, such as money tied to public pensions, in hopes of bringing a higher return.

Considering the payroll tax would take $290 per year from someone paid $50,000, Braun said those paying the tax would have plenty of reason to support SJR 8212.

“If the return on investment came in above 6 percent, which is more than the projected need for this new program, we may have the opportunity to look at reducing the payroll tax or expand the benefit. This proposal represents a common-sense way for taxpayers to protect themselves and possibly end up saving billions,” Braun said.

Proposals to amend the constitution require a two-thirds “yes” vote in both legislative chambers, higher than any other form of legislation. Braun’s legislation was supported by 92 percent of the Senate and 98 percent of House members.