Washington State Democrats Want To Delay WA Cares Tax Until 2023

That payroll tax was set to begin Jan. 1 of this year, just days before lawmakers begin their regularly scheduled legislative session this coming Monday.

But last month, Gov. Jay Inslee announced that in light of concerns — including over people who will pay the tax but never receive benefits — the state wouldn't collect the assessment from employers before April.

If passed, the two bills filed this week could dampen some criticism of the program. It would also delay the payroll deduction on workers until after the 2022 elections, and would let more people opt-out before that tax begins.

House Bill 1732 would delay the tax on Washington workers until July 1, 2023, according to a copy of the legislation. The bill is sponsored by House Majority Leader Pat Sullivan, D-Covington, and former speaker Rep. Frank Chopp, D-Seattle. Neither lawmaker responded to requests for comment.

Under the legislation, any premiums that have been collected before that date would be refunded by the state within 120 days.

In an email, Inslee spokesperson Tara Lee wrote that the governor continues to support "WA Cares as he believes it will help a lot of people."

"The governor has also said that he agrees that the Legislature needs to make some fixes and adjustments to the program," Lee added. "The governor is urging the Legislature to take this up as soon as they convene and move quickly toward resolution."

Approved in 2019 by Democratic legislators and signed by Inslee, WA Cares is intended as the first social insurance program of its kind in the nation, helping people pay for care for themselves in old age or sickness.

Beginning in 2025, eligible beneficiaries could start claiming up to $36,500 to pay for necessities like meal preparation, assisted living or nursing care, transportation and respite for family members providing care.

As the program began ramping up last year ahead of the new payroll tax, however, a host of concerns bubbled up.

Some focused on Washington workers who will pay into the program but never receive benefits.

That includes roughly 150,000 people who are working in the state but have permanent residences elsewhere, like in Idaho or Oregon.

Other people potentially excluded are older adults who might not yet be vested to receive a benefit before they retire in the next few years; those who ultimately leave to retire in another state; and military families rotating in and out of Washington.

A second Democratic bill filed this week seeks to address some of those issues.

Sponsored by Rep. Dave Paul, D-Oak Harbor, House Bill 1733 would allow some people not likely to receive benefits or who already have some coverage to opt out of the program and the payroll tax.

The estimated 150,000 people working in Washington but living in other states could opt out, according to a copy of that bill. Temporary workers with nonimmigrant visas can also opt out under the legislation.

Additionally, spouses or partners of active military and some disabled veterans will also be able to opt-out. People could start the exemption process in January 2023, according to the legislation.

Paul, whose district includes Island County, which has a large number of veterans, said he "started talking to House leadership in April or May about some of these concerns."

He reiterated his support for the program as a way to allow older people to age in their own homes: "I'm proud that our state is tackling this."

WA Cares has been roundly criticized by Republicans, who voted against the program in 2019.

Rep. Peter Abbarno, R-Centralia, has introduced legislation to repeal WA Cares. While his House Bill 1594 isn't likely to go far in the Democratic-controlled Legislature, Abbarno is urging lawmakers to come up with another approach.

Abbarno said he supports "incentivizing and working with private industry with better plans that are maybe more affordable."

While the critiques of WA Cares may have given Democrats political heartburn, conservatives have experienced their own setback just days ago.

Conservative activists had been gathering signatures for an initiative that if successful would have allowed state residents to opt out of the payroll tax and benefits at any time. That would have potentially gutted the program by depriving it of revenue.

But activists announced last week that they had not gathered enough signatures for Initiative 1436 by the year-end deadline.

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