Can kicked: Lawmakers miss opportunity to repeal long-term-care law and payroll tax

By ELIZABETH HOVDE  | 
Jan 20, 2022
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On Wednesday, the state House approved legislation that would delay a new payroll tax that was supposed to begin this month, assessing 58 cents on every $100 of a worker’s income. The money taken from people’s paychecks would fund a social program for long-term care when a state resident can no longer live an independent life. The legislation now moves to the Senate Ways & Means Committee, scheduled for a public hearing Monday at 4 p.m., followed by an executive session in the committee on Tuesday. 

The legislation was fast-tracked after Gov. Jay Inslee urged a delay in December, admitting the law he supported — and that Democrats have celebrated — has serious flaws. (Read more about those flaws in my opinion pieces here and here and on my blog.) The governor's urging and admission came after more than 450,000 people were exempted from the tax, taking about a third of the wages the program was counting on for 2022 with them.

House Bill 1732, one of the bills quickly moving, would pause the tax until July of 2023 and create a way for people who retire soon to possibly qualify for a portion of the program's promised lifetime benefit, even without paying in for 10 years. The other, House Bill 1733, would allow more groups of people who won’t benefit from the program, because of their residence or military connection, to opt out of the tax.

Of the program's delay, Democratic House Majority Leader Pat Sullivan said it was needed to ensure the program is efficient "so that we can guarantee those benefits to our residents throughout the state.” The problem with that? There is no guarantee of benefits. 

The state’s unpopular long-term-care law only guarantees that workers will be paying another tax during all of their working years. They will only maybe get a paltry lifetime benefit of $36,500, which is insufficient for most people’s long-term-care needs. If you’re a low-income worker, it’s also guaranteed that your wage will be reduced today to pay for other people’s — sometimes higher-income people’s — long-term-care needs. 

The program lacks compassion and common sense. 

The program is not portable, so move out of state and you lose the ability to apply for the promised benefit. Don’t qualify for three needed activities of daily living as defined by the state? There is also no benefit for you. If you’re lucky and don’t need long-term care at some point in life, you will have made a bad investment to pay for the things you will need or want.

The bills that are moving along fix none of that. Most concerning, they do make it even more likely that the tax will increase or the benefit decrease in order to achieve program solvency. 

Several Republican amendments were voted down or ruled out of order, including one that would require voter approval of the program in order for the payroll tax to take effect in 2023. Repeal bills weren’t even considered. 

Creating a safety net for people in need and not in need, and limiting the earnings of every wage group, is not good policy. Lawmakers shouldn’t be passing up the opportunity to get rid of a fatally flawed law.

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