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States, local governments, and nonprofits qualify for refundable clean energy tax credits under Inflation Reduction Act

The federal Inflation Reduction Act (IRA), which was signed by President Biden in August, includes $270.7 billion (over the 2022–2031 period) in new and expanded clean energy tax credits. (The cost estimate from the Joint Committee on Taxation is available here.) Notably, most of these tax credits will essentially be refundable for states and local […]

Tax regressivity and state spending

On Wednesday, Crosscut ran a piece from the Center for Public Integrity on the regressivity of state taxes. The story relies on the 2018 state and local tax structure study from the Institute on Taxation and Economic Policy (ITEP). We wrote in depth about our concerns with the ITEP study here. In short: It overstates […]

Long-term care program portability options would not fully address the issue

Last year, the Legislature delayed Washington’s long-term care (LTC) program by 18 months. Unless action is taken in the upcoming legislative session, premiums will be assessed beginning July 1, 2023, and benefits will be available beginning July 1, 2026. Under statute, benefits are only payable to Washington residents—even if a nonresident had previously worked in […]

State Supreme Court: Property insurance doesn’t cover business income lost due to COVID shutdowns; property tax refund cases must be filed in the collecting county

The state Supreme Court released two notable decisions today. The first is about insurance coverage of business income that was lost due to the state’s COVID shutdowns in 2020. The second is about where property tax refund cases must be filed. 1. COVID shutdowns did not trigger property insurance coverage of lost business income because […]

New brief: Cash Deficits in the Paid Family and Medical Leave Program Signal Additional Tax Increases Ahead

Washington’s paid family and medical leave (PFML) program is one of the first in the nation. PFML benefits are funded by a premium that is assessed on employee wages, up to the Social Security cap ($147,000 in 2022). From 2019 through 2021, the premium rate was 0.4%; it was increased to 0.6% this year. The […]

The paid family and medical leave premium rate could rise to 1% next year

Today the Employment Security Department (ESD) told the Paid Family and Medical Leave (PFML) advisory committee that the premium rate for the program might need to be 1% next year. At the beginning of this year, the rate increased from 0.4% to 0.6%. Last month, ESD estimated that the premium rate for 2023 would need […]

Seattle has now collected $290.1 million in payroll expense taxes for 2021

When the City of Seattle closed its financial books for 2021, it had collected $248.1 million for the year from the new payroll expense tax. Since then, an additional $41.9 million has come in, according to the city’s Office of Economic and Revenue Forecasts (OERF). The OERF and the City Budget Office presented the August […]

New legislative task force on paid family and medical leave premiums begins its work

Given the financial issues with the paid family and medical leave (PFML) program, the Legislature passed a bill earlier this year (2SSB 5649) that established a legislative task force on paid family and medical leave insurance premiums. The task force is charged with making recommendations for any changes to PFML premiums, “to ensure the lowest […]

Paid family and medical leave premiums increased substantially in the second quarter, but cash flow problems persist

The premium rate for the state’s paid family and medical leave (PFML) program increased from 0.4% to 0.6% in January. Premiums are assessed quarterly, so the second quarter of 2022 is the first in which premiums were collected that had been assessed at the 0.6% rate. According to data from the Employment Security Department (ESD), […]

Capital gains tax revenues in the June forecast

The Seattle Times reports that the capital gains tax case will go directly to the state Supreme Court, rather than being heard first by the Court of Appeals. Oral arguments could take place in November. In March, a Superior Court judge ruled that the tax is unconstitutional. Under the statute, the capital gains tax was […]