Blog

To opt out of the long-term care program, private coverage will have to be purchased by Nov. 1

In 2019, the Legislature passed a payroll tax to fund a new long-term care (LTC) benefit. Under the legislation, the tax will begin on Jan. 1, 2022 and will initially be set at a rate of 0.58%. There is no cap on the wages subject to the tax. The lifetime maximum benefit is essentially $36,500 […]

Legislature passes captive insurance bill that will increase state revenues

The Legislature has passed 2SSB 5315, which will subject captive insurers to the 2% premium tax. Captive insurers are insurance companies controlled by the entities they insure. We wrote about the policy in a policy brief earlier this year. The bill is expected to increase revenues to funds subject to the outlook by $34.2 million […]

New brief: State Revenues Are Back to Pre-Pandemic Levels

State revenues are now expected to match the pre-pandemic Feb. 2020 revenue forecast. Revenues in 2019–21 are now forecast to be $52.334 billion (an increase of 13.6% over 2017–19). In 2021–23, revenues are expected to grow by 8.2%, to $56.615 billion. In 2023–25, revenues are expected to grow by 5.8%, to $59.906 billion. Given the […]

The 2020 revenue rollercoaster has returned to where it started, and the current budget balances without increasing taxes or using the rainy day fund

State revenues from funds subject to the outlook (NGFO) are now back to what was expected in Feb. 2020—the forecast on which the current budget was based. Kriss wrote about today’s revenue forecast here. Compared to Feb. 2020, revenues are now expected to be down $355.47 million for 2019–21, up $297.67 million for 2021–23, and […]

Captive insurance bill passed unanimously by Senate

Yesterday the Senate unanimously passed 2SSB 5315, which would subject captive insurers to the 2% premium tax. We wrote about the issue in a policy brief earlier this year. Captive insurers are insurance companies that are controlled by their insured. Companies may use captive insurers for several reasons, including to improve risk management, to fill […]

Washington’s revenue and personal income growth indicate that this recession is much different from the Great Recession

Some proponents of new taxes this year are arguing that Washington needs to have new revenue sources in place for when the federal relief funds run out. These arguments ignore the fact that this recession now appears to be quite different from the Great Recession: In the Great Recession, state revenues actually declined by 5.5% […]

Capital gains tax striking amendment would not effectively address revenue volatility

In advance of Senate floor action on the capital gains tax bill (SB 5096), Sen. Robinson has proposed a striking amendment. (Kriss wrote about the bill as passed by Ways & Means here, and I wrote about how it would make our revenue structure more volatile here.) The striker would broaden the small business deduction, […]

On the regressivity of Washington’s tax structure

Austin Jenkins has a story about the drive to adopt new taxes this year (particularly a capital gains tax), despite the fact that revenues are increasing and Washington does not have a budget shortfall. Even as the state of Washington’s revenue picture improves, majority Democrats in the Legislature appear committed to a course that will, […]

HB 1465 would increase estate tax rates and significantly reduce deductions for charitable donations

Washington is one of just 12 states with an estate tax, and the top tax rate here (20%) is tied for the highest in the country. Nevertheless, HB 1465 would double the top rate. First, the bill would raise the threshold for estates to be subject to the tax. Currently, $2.2 million may be excluded […]

A capital gains tax would make state revenues more volatile, but capital gains revenues in the Senate bill would not contribute to the rainy day fund

One of the strengths of Washington’s tax structure is that revenues are relatively stable. Pew estimates that Washington’s tax revenues are the 16th least volatile in the country. And one of the strengths of Washington’s budget system is our constitutional rainy day fund (the budget stabilization account, or BSA). Pursuant to Art. VII, Sec. 12 […]