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The Washington Supreme Court upheld a tax on capital gains Friday, taxing extraordinary profits over $250,000 from the sale of long-term investments at a rate of 7%. Revenue will support early learning and K-12 programs.
The Washington State Supreme Court upheld the state’s capital gains tax Friday morning. The court decided in a 7-2 decision that a tax on the sale of stocks and certain other capital assets is an excise tax, not an income or property tax. The ruling allows the new state law to take effect that applies a 7% tax on gains over $250,000 on the sale or exchange of such assets.
The tax does not apply to real estate, retirement savings, business operations, or assets held under one year, among other exceptions.
The Legislature passed the capital gains tax in 2021 and legal challenges followed. Chris Quinn v. State of Washington was filed in Douglas County Superior Court in 2022.
Washington state’s tax structure has been deemed the most regressive in the nation, meaning that lower-income Washingtonians pay a greater share of their earnings in tax than do higher-income Washingtonians. The capital gains tax is one important step to improving fairness in Washington’s tax system.
“The poorest individuals bear the greatest tax burden due in large part to our heavy reliance on sales taxes and the lack of a graduated income tax, with low wage earners paying nearly six times more in state taxes as a percentage of personal income than Washington’s wealthiest residents," reads the Supreme Court’s decision.
The tax will only apply to the state’s very highest earners. It is estimated to generate about $500 million annually, providing funding for childcare, early learning, K-12 education and other programs that help Washington kids and families.
The state’s Department of Revenue provides answers to common questions about the capital gains tax on their website.
“For 134 years, Washington state has been waiting for the day when a fairer tax system came about, one where working people were not carrying an inequitable share of the burden,” said Gov. Jay Inslee in reaction to the news on Friday. “Today is that day. Washington’s capital gains tax helps right an upside-down tax structure where low-income Washingtonians ultimately expend a much larger share of their income in taxes than our wealthiest residents.”
Ten formerly homeless residents of Camp Hope in Spokane graduated Friday from a pre-employment training course certifying them in valuable job skills.
Friday was an exciting day for 10 formerly homeless residents of Camp Hope in Spokane. The 10 were recently brought inside thanks to state efforts to provide housing, and each graduated Friday from a state-sponsored Pre-Employment Preparation Program. The graduates now have a roof overhead and the prospect of earning a livable wage.
Camp Hope is the largest encampment in the state. It’s one of more than a dozen sites statewide the state is working to resolve as part of the Right-of-Way Safety Initiative launched last spring. Since October 2022, Camp Hope has dramatically shrunk by 86%—from 467 people to just 65 people as of last week.
PEPP is one example of the services that are helping people from Camp Hope get back on their feet. The state Department of Transportation and contractors from i2 Strategies partnered to help the group recover from homelessness and discover career opportunities. The program consisted of four weeks of in-person learning and hands-on training. Graduates of the program now have certifications in OSHA 10, First Aid and CPR with AED, Traffic Control (flagging) and forklift qualifications.
The graduates will be introduced to employers to interview and put their new skills to work. Northwest Laborers visited students during the first week of classes, and the students visited apprenticeship sites like Cement Masons and Plasters, HVAC Local 82, Inland Empire Electrical, and Iron Workers Local 14.
The students received case management services through the program to help them overcome barriers to employment and long-term stability, such as lack of documentation and access to health services.
In Seattle, additional encampments are in the process of being resolved. On Tuesday, Gov. Jay Inslee visited the encampment site at First Avenue and Michigan Street where outreach teams successfully connected 30 of the 35 people living there with supportive housing. Inslee recently visited another site near the Ship Canal Bridge. The approximately 15 residents of that site are being transitioned to shelter and housing and crews will close the site by the end of March.
Gov. Jay Inslee visited two encampments in Seattle to speak with concerned neighbors this week. "This is not acceptable in the Evergreen State," said the governor. At the encampment pictured at First Avenue and Michigan Street, 30 of the 35 former residents of the site accepted housing and services. (Photo courtesy of @PhotogSteve81)
The 105-day legislative session is heading into the fourth quarter. Sine die – the day session ends – is scheduled for April 23. Before then, legislators are under several crucial deadlines: they must pass remaining bills out of policy committees by Wednesday, and fiscal or budget committees by April 4. Policy bills must pass off the floor by April 12 and then the focus is on legislation necessary to implement the budget (also known as “NTIB bills”).
Meanwhile, budget negotiations are ramping up. The Senate released its 2023-25 capital and operating budget proposals this week, and the House will release its operating budget proposal Monday at noon. The new budgets approved by legislators will go into effect July 1. Both the governor and Senate are well-aligned on key priorities such as special education, early learning, climate and behavioral health. The Senate is proposing significant funding for housing, but the governor is asking legislators to do more so the state can build more than 20,000 new units of housing and shelter and speed up efforts to address homelessness.
Among the bills passed by legislators this week was a bill to permanently cap insulin prices at $35 a month, and a bill to toughen penalties against sexual abuse by jail and prison guards, a bill known as Kimberly Bender’s Law. The bill follows Bender’s death by suicide in a Forks jail after a guard victimized her and other inmates. At this point in the session, the governor has five days to act on bills once they’re delivered to his desk.
New federal wildfire prevention grants awarded to 14 WA projects
Vice President Kamala Harris announced grant awards Monday funding 14 wildfire prevention projects in Washington state. The Bipartisan Infrastructure Law created a new Community Wildfire Defense Grant program that would enhance prevention and firefighting efforts nationwide, and President Joe Biden’s proposed budget would enhance firefighter pay and provide them housing. New federal measures are helping Washington communities at the highest risk from wildfire, and the heroes holding the line.
Extended Apple Health eligibility to expire
Apple Health (Medicaid) eligibility was extended during the pandemic. The public health emergency period has concluded, and extended eligibility will sunset. As many as 300,000 Washingtonians may lose coverage. The change is not immediate – Apple Health enrollees will remain covered through their present term. The state Health Care Authority (HCA) will mail instructions prior to enrollees’ annual renewal dates. Eligibility criteria are detailed on the HCA website. Extended Medicaid eligibility helped Washington to achieve record-low rates of people uninsured during the pandemic.
Affordable housing springs from a formerly contaminated site
In one Seattle neighborhood, a new affordable housing development now stands where a legacy car repair shop and dry cleaner had left behind a soiled legacy. The site was cleaned up in 2020, construction began in 2021, and now The Maddux offers 200 affordable housing units to residents of the Mt. Baker neighborhood. The project received funding from the state Department of Ecology’s Toxics Cleanup Program, which tackles challenging properties statewide, giving new life to once-hazardous sites. The Legislature established a permanent program in 2022 to fund cleanups to invite affordable housing construction.
Proposed new rules would help outdoor workers beat extreme heat
Rule changes have been proposed to protect agricultural, construction, and other outdoor workers from dangerous heat. State rules already require employers to have an outdoor heat exposure safety program, but the new rules reduce the “temperature action level” and make important stipulations about shade, heat acclimation, cool-down periods, and worker monitoring during heat events.
“Outdoor workers bear the brunt of hotter and hotter weather driven by climate change,” said Craig Blackwood from the state Department of Labor & Industries. “We’ve listened carefully to workers, businesses, and other stakeholders to develop proposed rules that create much safer conditions for Washington’s outdoor workforce.”
Planet approaching “irreversible” damage from climate change, per U.N. report
The United Nations (U.N.) Intergovernmental Panel on Climate Change (IPCC) issued a dire report Monday: the window of opportunity to reduce emissions and spare irreparable damage to the planet is “rapidly closing.” America is All In, a coalition of climate action leaders co-chaired by Gov. Jay Inslee, echoed the report’s urgency.
“We don’t have time to agonize or despair,” said Inslee. “We must focus on mobilizing every part of our economy in the net-zero transition. State-level leadership in the United States is critical to the implementation of international and national policies."
New Commerce grants to create 214 affordable housing units
The state Department of Commerce funded 13 new affordable housing projects in the most recent round of its Rapid Capital Housing Acquisition grant program. The department awarded $50.6 million in grants that will open 214 affordable units and 70 emergency shelter beds for people experiencing homelessness across 10 counties.
“Over the past two years, the Legislature made historic investments in housing that are helping move many more people indoors and keep them housed with dignity and safety,” said Commerce Acting Director Kendrick Stewart. “We have far more work to do, but this latest round of investments will quickly bring more housing options online and maintain them for the future.”
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