WashingtonVotes NEWS: Friday, January 18, 2019
Governor’s tax proposal, use of force by police are among top issues for committee action in early days of legislative session.

Following Monday’s opening of the 2019 legislative session and Governor Inslee’s State of the State speech on Tuesday, state lawmakers are settling into the daily routine of early session days—bill introductions and committee hearings. More than 750 bills have been introduced, with dozens more added every day in each chamber. More than 2,000 measures will likely be introduced by the time of the first legislative cut-off deadline, set for February 22nd. This is the last day to pass bills out of policy committees in their originating house.

The Senate Ways and Means Committee began hearings this week on SB 5129, the Governor’s proposal to impose a nine percent tax on the sale or exchange of long-term capital assets, and to increase the business and occupation tax rate on service-related activities from 1.5 percent to 2.5 percent (a 67 percent increase in the tax).

The analysis (Bill Report) of this legislation, prepared by non-partisan Senate committee staff, describes the proposed capital gains tax as an income tax, stating: “Under the federal tax code, individuals and corporations pay income tax on the net total of all their capital gains just as they do on other sorts of income. “ The Bill Report also points out that, “In addition to the federal tax, capital gains are often subject to state income taxes. Most states tax capital gains as ordinary income subject to the state's income tax rates.”

Supporters of the plan, including the state teachers’ union, said the proposed changes are needed to bring fairness to the tax system and support needed state programs.

Business groups objected to the state capital gains tax, because it would hit owners if they sell a business to retire. Under the bill, proceeds from retirement savings accounts would be exempt from the tax, but the sale of a business would not. That would hurt small retailers who devote years to building up a business in preparation for retirement, according to the Washington Retail Association.

The House Public Safety Committee passed HB 1064 to modify Initiative 940, which was approved by state voters last November. The bill includes provisions relating to training, the criminal liability standard for use of force by police, independent investigations of deadly force incidents, and rendering of first aid. It would also require the state to reimburse a peace officer for reasonable defense costs when he or she is found not guilty or charges are dismissed in certain circumstances.

These modifications to Initiative 940 were included in a bill last session after agreement among law enforcement and community leaders, but the state Supreme Court ruled it unconstitutional and ordered that the original measure be placed before voters.

The state Senate has launched a remote testimony pilot project to expand opportunities for citizens across the state to participate actively in the legislative process from locations outside of Olympia. Without options for remote testimony, citizens seeking to testify before legislative committees often endure hours of travel to Olympia and a missed day at work. People on the east side of the state also frequently brave mountain passes in dangerous winter conditions.  Remote testimony enables them to testify from local locations via video conferencing technology.

Washington Policy Center (WPC) has long been an advocate of remote testimony and recently launched a statewide public service ad campaign to encourage the legislature to embrace and expand remote testimony options for citizens. “We are encouraged to hear the Senate plans to continue offering remote testimony options,” said Jason Mercier, WPC’s Government Reform Director, “now is the time for the House to follow the Senate’s lead and embrace remote testimony for those that wish to testify. In a high-tech state like ours, offering remote testimony is just common sense.”

For more information on the Senate’s pilot project go to http://leg.wa.gov/Senate/Committees/Pages/RemoteTestimony.aspx.

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