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Washington Legislature wraps up: Included on list of wins are capital gains, carbon output

By , Columbian staff writer
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Speaker of the House Laurie Jinkins, D-Tacoma, left, presides over a session of the House in Olympia on April 21 with most representatives attending remotely. The 2021 session ended April 25, and lawmakers had no shortage of weighty topics to consider while having to conduct their work amid a pandemic that meant most meetings and votes were conducted remotely. The Capitol building was closed to the public.
Speaker of the House Laurie Jinkins, D-Tacoma, left, presides over a session of the House in Olympia on April 21 with most representatives attending remotely. The 2021 session ended April 25, and lawmakers had no shortage of weighty topics to consider while having to conduct their work amid a pandemic that meant most meetings and votes were conducted remotely. The Capitol building was closed to the public. It also was surrounded by security fencing and National Guard members at times because of fears over protests. Photo Gallery

Democrats scored one victory after another over the course of this year’s 105-day legislative session, as lawmakers in the majority party eschewed incremental change in favor of sweeping, long-sought goals.

Just before the session concluded on April 25, liberal legislators shepherded major priorities through both houses and onto Gov. Jay Inslee’s desk. Their list of policy wins includes a new tax on capital gains, a pair of carbon-curbing bills, and a $59.2 billion operating budget that pumps resources into the state’s education and public health systems.

Rep. Monica Stonier, D-Vancouver, said the year’s productivity is owed in part to a lack of distractions. Facing a session slowed by its remote format, she and her colleagues were instructed to keep their attention narrowly tailored: Pandemic recovery, equity and environmental justice were the focus. Bills that fell outside those limits were not considered.

“We asked our members to limit our numbers of bills they introduced to around seven, and ensure that they were focused on those things,” said Stonier, who served as the Democrat floor leader over the course of the session. “I think that really helped us filter our attention and think strategically about those things.”

Lawmakers also passed a slate of bills aimed at increasing police accountability, including legislation establishing a statewide office to investigate use-of-force incidents and a bill that requires officers to intervene if they witness a peer using excessive force.

Two main strategies to reduce carbon emissions, a cap-and-trade program and a low-carbon fuel standard, passed both chambers just before the session concluded. However, in order to enact the pair of bills, the Legislature will need to pass a 16-year transportation revenue plan, which lawmakers say will need to be taken up in a special session later this spring.

Republicans feel ‘steamrolled’

Democrats could call the session — the first-ever legislative session conducted almost entirely via videoconferencing, as COVID-19 forced business-as-usual to a halt in Olympia — extremely fruitful.

But while a few measures passed with bipartisan support, many Republicans would use a different description: steamrolled.

“There were some bills that were just on greased skids, and there was nothing we were going to be able to do,” said Senate Republican Caucus Chair Ann Rivers, R-La Center. “Overall, when I think about the session, it was disappointing on a number of fronts.”

The approach was especially discouraging, Rivers added, because Washington is flush with resources. Despite dire warnings at the start of the pandemic that the state would face an $8.8 billion budget deficit, stronger-than-expected tax receipts combined with federal aid money left the state in an ideal position to scale back on existing regressive taxes, she said.

“Especially in this year of a $15 billion windfall, why wouldn’t we choose another way to do this?” Rivers asked.

The Legislature took aim at crafting bills to right Washington’s tax structure, which is among the most regressive in the country due to its heavy reliance on sales taxes. The first step, a new tax on capital gains revenue, passed despite uniform opposition from Republicans.

The bill imposes a tax on the sale of certain assets owned by wealthy people including stocks, bonds, and luxury goods like cars and fine art. Revenue from the sales in excess of $250,000 will be taxed at 7 percent; sales of homes, farms and retirement accounts such as Roth IRAs and 401(k)s are exempt.

Sen. Annette Cleveland, D-Vancouver, was one of the few Democrats who originally opposed the capital gains tax, claiming that the bill could drain the political will to pass other revenue-raising measures for infrastructure projects this year.

Cleveland cast her vote against Senate Bill 5096 when it first came to the floor. But when it returned to the chamber with House revisions, she switched her stance. Her changed vote may have been the deciding factor: The tax bill skirted through the chamber, 25-24.

If Inslee signs the bill, the tax will go into effect in 2022. It is expected to bring in $550 million in 2023. The revenue is earmarked for Washington’s Education Legacy Trust Account, which funds child-care and early-learning programs.

“Looking at the data, there are fewer than 150 people in the 49th Legislative District that would be impacted by this,” Cleveland said, speaking about her own west Vancouver district. “There’s a tremendous investment on every state dollar that we put toward early learning, and that’s what the capital gains tax is aimed primarily at.”

The tax is also all but guaranteed to face a challenge in the courts. Opponents consider it a version of an income tax, which is in violation of the state’s constitution. Republican lawmakers have also worried that the tax will discourage Washington’s wealthy residents from putting down roots and creating jobs.

“The people this bill will ultimately impact are the very people that have worked hard, they’ve been wise in their investments, they have taken the good American dream, the free market economy here in America, and made it work,” Rep. Vicki Kraft, R-Vancouver, said during the bill’s floor debate. ”Why would we penalize them for that?”

The second step toward a more progressive tax structure drew near-unanimous support on both sides of the aisle.

A bill expanding the Working Families Tax Exemption sailed through the Senate 47-2 and the House 93-3. It was a slam dunk — and a chance for Republicans to exercise some influence as the minority party, Rivers said.

“By putting it in our budget, we forced the Democrats to put it in theirs,” Rivers said.

The program was established in 2008 but left unfunded (a casualty of the Great Recession, and later the fight over school funding after the McCleary case, Rivers said). It’s meant to offset the state’s sales tax, which disproportionately impacts lower-income people.

Starting in 2023, Washington state will return an estimated $250 million to 420,000 taxpayers in payments ranging from $300 to $1,200, depending on household size and income level.

Environment and transportation policy

Democrats also passed a pair of bills aimed at curbing carbon emissions and raising revenue for clean energy transitions.

The first, a carbon cap-and-trade program, would limit emissions for businesses that produce greenhouse gases. They’ll need to stay below a certain threshold of carbon pollution or purchase allowances from the state’s Department of Ecology. That cap would decrease over time. The same bill increases the state’s gas tax by 5 cents per gallon, on top of the existing 67.8-cent tax.

The other piece of legislation establishes a low-carbon fuel standard. It aims to incentivize energy companies like BP to produce cleaner fuel sources over time for cars, trucks, boats and airplanes.

The twin bills come with a caveat. They’re linked to a sweeping 16-year transportation revenue plan, which didn’t pass. Lawmakers ran out of time.

“I’m disappointed that we’re looking at this scenario,” Stonier said. “I don’t feel it is consistent with our legislative practice to tie things together like that.”

Rep. Sharon Wylie, D-Vancouver, serves on the House Transportation Committee. She said lawmakers will likely pick that work back up in the next couple of weeks. The transportation plan will need its own special session.

Planning for major projects, like the Interstate 5 Bridge replacement, also hinges on federal infrastructure dollars, she added. The Biden administration released a $2 trillion infrastructure plan last month that includes a pledge to fix 10,000 bridges nationwide.

“I think there’s still a strong commitment to do a transportation infrastructure package that will carry us into the future,” Wylie said. “How we get there, we’re still in negotiation, and I think what the federal government does or doesn’t do will help us come together on that.”

Policing

Democrats were able to pass a broad array of bills this session aimed at increasing police accountability.

While most passed along party lines, a few gained bipartisan support from Southwest Washington Republicans. A bill that improves data collection on law enforcement activity passed with unanimous support from the region’s lawmakers.

Rivers and Rep. Paul Harris, the minority caucus chair, crossed party lines to support a bill that would require police officers to intervene if they witness a peer using excessive force. Sen. Lynda Wilson, R-Vancouver, supported a bill that would lay out a process for selecting arbiters in negotiations with police unions.

Wylie served as sponsor on two key bills that made it to Inslee’s desk: a bill banning neck restraints, chokeholds and no-knock warrants, and a bill that lays out rules for officer use-of-force and de-escalation tactics.

“A lot of the communities of color wanted their leaders to be front and center on this, so I took a lot of my direction from people who are dealing with the situation on the ground. I have friends that have had some very unpleasant experiences right here in Vancouver. We were driven by data,” Wylie said. “We have a pattern of disproportionate impact and behaviors that don’t stand the common sense test. … We’ve had a real problem, and to deny that is to be naive.”

The slate of police-reform legislation introduced and passed over the last 105 days also includes a bill that establishes a statewide Office of Independent Investigations to examine police use-of-force incidents, including shootings.

When the bill passed the Legislature last month, Rep. Larry Hoff, R-Vancouver, said he thought it added to unnecessary bloat in the state government. It didn’t gain any Republican votes from Clark County.

“I just think it’s a redundant piece of legislation,” Hoff said. “This bill grows government for no reason.”

Democrats argue that the broad policing reform was long overdue, and that more work will continue in future sessions.

“For the record, I don’t know of any Democrats in Washington who want to defund the police,” Wylie added.

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