Legislative Commentary: Legislative session reaches halfway the mark

The halfway mark of this legislative session is fast approaching. Feb. 11 will be day 30 of the 60 days we’re allowed to meet in 2014. It’s also the deadline for the Senate budget committees to wrap up their work on Senate legislation.

I serve on the Ways and Means committee, and because we don’t need to craft a brand-new state budget this year, our work will focus mostly on policy bills that have a financial angle. An example is Senate Bill 6090, which is expected to send more DUI offenders to state prison. Anytime you add to the prison population it affects the corrections part of the state budget, so the bill was referred to the budget committee this week after the Senate Law and Justice Committee approved it.

This past week got off to a good start, as folks from the Ritzville School District and school board were first on my calendar. From there the lengthy list of 9th District meetings included visitors from Educational Service District 123 and the Pasco School District; Othello businessman Brian Moreno; representatives from the Spokane, Palouse, Palouse-Rock Lake and Asotin County conservation districts; a group of WSU students; the head of the Spokane Public Facilities District; staff and residents from the Lakeland Village facility in Spokane County; plus leaders from Pullman, Connell, Othello and other local communities. The Cattle Producers of Washington were in town yesterday; members of the state horticultural association were at the Capitol earlier in the week for the annual Tree Fruit Day, and dairy farmers from across Washington came to observe Dairy Day.

After three weeks here it’s time for the faithful hound, Ruger, and me to head home to the farm. With any luck I’ll get to watch the Super Bowl in its entirety Sunday afternoon before we hit the road back to Olympia!

Governor’s tax proposal resumes war on Washington agriculture

It always amazes me when someone at the Capitol suggests a tax increase to help pay for education. Here’s why: If providing for our public K-12 schools is the top responsibility of state government, shouldn’t that support come out of the money the state already collects, meaning any proposed tax hikes should be tied to things farther down the priority list?

I bring this up because this week the governor said he wants to do away with seven tax incentives or exemptions and put the resulting revenue toward education. This is on top of the hundreds of millions in additional spending he called for in December and his support for raising Washington’s already-record minimum wage.

One of the tax exemptions targeted by Governor Inslee involves trade-ins, and it represents a restart of Olympia’s war on agriculture. That’s because farm equipment is included along with automobiles.

Under state law, if you trade in a car when buying a car that costs more, the trade-in value is deducted from the selling price when calculating the sales tax owed. This exemption was created by the voters 30 years ago; Inslee now wants to limit it to the first $10,000 of trade-in value (according to the state Department of Revenue, the average auto trade-in value is $7,500). Imagine trading in a tractor and having to pay sales tax on the trade-in value above $10,000!

The state revenue office estimates this tax increase would bring in $45 million for the remainder of this budget cycle – and $98 million in 2015-17, from an estimated 85,000 taxpayers.

Also, the fact that this tax hike would extend to agriculture is no mistake. The state revenue office figures to rake in $11.1 million just from farm-equipment trade-ins: $3.3 million during the rest of this biennium and $7.8 million in the next two-year budget cycle.

Even though this exemption has yet to come before the citizens’ commission created to conduct reviews of tax exemptions, the Senate Democrats went after it in 2010.

They ultimately dropped the idea from what otherwise was the largest tax increase in state history. Inslee proposed the same change last year; our Senate Majority Coalition Caucus responded by showing we could put together a balanced budget without it. The governor won’t get his way this year either, but it’s disappointing that he is even trying again.

Passage of Worker Recovery Act good for employees and employers

Many of us are familiar with the idea of shopping around for a better rate on homeowner’s or auto insurance, and freeing up money to spend on another need. Employers are required to have workplace insurance, but unless they are self-insured (something only the biggest companies can do) there is no shopping around. Their only choice is to buy coverage through a system run by the state Department of Labor and Industries.

Because it compensates workers who have been injured on the job, the system is better known as “workers’ compensation.” Employers in Washington pay premiums to L&I for workers’ compensation; employees also do through payroll deductions.

There are steps the Legislature can take to bring down the cost of workplace insurance (which can really add up; logging companies pay the equivalent of $19 or so per hour to cover just one worker).

A lower rate frees up money that can be used to hire more workers.

Last week, with a bipartisan vote, the Senate approved the Worker Recovery Act – one of the many bills in our Majority Coalition Caucus “Jobs Now!” package. It would end the age limit on injured workers who want to pursue structured settlements of job-related injury claims. I co-sponsored and helped pass this measure, which would not only treat all injured workers fairly but could help reduce (or at least stabilize) the cost of workplace insurance for employers and employees.

Injured workers would still have access to medical services; this change involves the disability payments that replace income lost because of a workplace injury.

State law allows injured workers 55 and older to seek a structured settlement instead of remaining on disability (which prohibits them from going back to work). I believe it is fair for younger workers to have that option also.

For workers this would be completely voluntary (and the option is already available to workers in 44 other states); a settlement could be their key to a change of career or a return to school.

For employers, a system with fewer open-ended claims and lifetime disability payments could mean lower rates – or at least fewer rate increases. Just the knowledge that workplace-insurance premiums will be stable may provide the incentive an employer needs to hire.