April 5, 2023
This Issues Topics:
2023 • April • Business Connections • Legislation • Payroll tax • Peter Abbarno • Washington State Legislature

The Washington State Legislature is down to the final month. The House is considering legislation that passed the Senate, the Senate is considering legislation that passed the House, both chambers are reconciling legislation through the conference process, and legislation that passed both chambers are being sent to the governor for his signature, or veto.  To say the least, there are a lot of late night, early mornings, and negotiations. 

As we approached this last month, I was appreciative of all those who attended the 20th Legislative District virtual town hall. Senate Republican Leader John Braun, Rep. Ed Orcutt, and I welcomed the opportunity to provide an update on the 2023 legislative session. We also greatly valued hearing from folks throughout the 20th District about issues that matter most to them. 

The legislative town hall was an expanded version of the Centralia-Chehalis Chamber of Commerce monthly town hall we host for the community.  

The most common issues we heard from constituents about concerned public safety, homelessness, and the high cost of living – the same kitchen table issues I hear about every week in the community. 

Families are struggling to keep up with the high cost of groceries, fuel, education, childcare, and housing. They’re also fed up with the chronic failure to address homelessness, hard drug use, and crime. Every year, it seems, Olympia adds more taxes, rules, and regulations – all of which make it harder to succeed. And every year we continually see the same policy failures on public safety and other quality of life issues. 

As frustrating as the status quo may be, we can’t give up on our state’s future. We must continue to fight for our values that will help build stronger communities and stronger families. That begins with making sure you can keep more money to invest in your family.

As families plan their daily, weekly, and monthly budgets, another issue that is again beginning to take front stage is the state’s long-term care payroll tax. My office has received numerous calls and messages in recent weeks about the payroll tax. 

In July, the new payroll tax  starts being deducted from the paycheck of every W-2 in the State of Washington belonging to a worker who has not previously found alternative long-term care plans and opted out of the program.  

I introduced bi-partisan legislation for the second-year to repeal the program for several reason and for the second-year majority democrats did not even give the policy a hearing. The long-term care payroll tax program is:

  • Unpopular: In 2019, almost 63% of voters opposed the long-term care payroll tax program on the general election ballot. Subsequently in 2022, more than 475,000 workers opted out of the program. Unfortunately, too many workers either missed the opt-out window or were unable to make alternative plans.  For now, if you missed the opportunity to opt-out, your family is stuck paying the new tax.
  • Unfair: The long-term care payroll tax hurts the families that are least able to pay the new tax. The tax takes $0.58 per $100 earned.
    • A family with a household income of $60,000 would pay an additional $348 per year for the program regardless of their ability to pay. 
    • Workers close to retirement earning $60,000 would also pay an additional $29 per month even though they won’t be eligible for the program. 
    • The program is not portable to another state; therefore, a person retiring in Arizona after contributing to the program for 50 years would not be eligible for any of the benefits and lose all the money they invested.
    • A spouse contributing to the program for 50 years could not transfer the benefit to a stay-at-home spouse who might need the long-term care.
  • Inadequate:  The long-term care payroll tax program provides only $36,500 worth of total benefits, regardless of the amount invested in the program.  The benefit, even adjusted for inflation, would provide inadequate care and is not a “long-term” solution.  Testimony from care providers indicated this could be as short as one to two months of care; not long term as promised.

I believe long-term care planning is important; however, the long-term care payroll tax program is not a solution. It gives workers the false impression that their long-term care is being addressed. That is why I believe we must repeal the long-term care payroll tax, hit the reset button, and work on a real way to incentivize long-term care planning.  

I will continue to work on repealing the payroll tax and on policies that ease the financial burden on families seeking more financial security and independent. As always, feel free to reach out to my office with any comments or questions. I can be reached by visiting www.RepresentativePeterAbbarno.com or through E-mail at [email protected].