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Dear Friends and Neighbors,

While the Legislature has been adjourned since April 28, there are many important state government and legislative-related issues making headlines this interim. A possible income tax in Washington state and a pay-by-the-mile road usage, just to name a couple.

It has been a busy summer. I am working on potential legislation for the 2020 legislative session, meeting with local government officials, state agencies and constituents.

In this email update, I touch on some of the issues I have been working on, as well as some priority issues of House Republicans and update you on the latest information on the possibility of Washington having a state income tax and a road usage tax.

City of Brewster drinking water

The city of Brewster has high levels of manganese in its water system. City officials recently received grant money to be used to drill new test wells, as well as a permanent clean water source.

Unfortunately, the city was struggling to get its permit in a timely manner and there was concern it was going to miss the opportunity to use the grant money. After talking with the Department of Ecology and the Department of Health, the city was able to get the permit.

Twisp bank stabilization

This summer I visited Twisp to meet with folks from the Methow Valley Community Covenant Church. They were dealing with a bank stabilization problem and the Department of Fish and Wildlife was considering a very expensive fix. After meeting with the department and touring the area in question, we believe an equally effective and reasonable solution was reached that everyone could agree upon. We will continue to monitor the situation.

Property tax legislation

Last session, the majority party increased spending by more than 17%, with the total budget spending now more than $52,000,000,000. To pay for that increased spending numerous tax increases totaling more than $5.5 billion over the next four years were passed. (See chart below).

There was no need to raise taxes as we had a $2.8 billion surplus at the beginning of session. In an effort to provide some tax relief to Washington residents, I am working on a property tax reduction proposal.

I have heard from those on a fixed income, specifically seniors, and some desperately need this with the increase in property values and the cost of living also increasing. We have an opportunity to provide tax relief to property owners.  I am still working on the details, but I will keep you updated as we get closer to session.

Liquor and Cannabis Board (LCB)

I am also drafting legislation that would require the LCB to treat the siting of cannabis license locations like liquor store locations. The state should honor local government zoning rules and allow them to decide what are suitable locations for cannabis stores. Since local government ends up carrying the burden of enforcement and zoning the decision should be theirs to make. Currently the LCB asks for comment, but makes the final decision without regard to local zoning.

Is an income tax coming to Washington state?

Proponents for a state income tax are one step closer to their goal as efforts to create new taxes on income continue.

On July 15, the Washington State Court of Appeals issued its ruling on whether the city of Seattle has the authority to impose a local income tax. While the court did rule Seattle's graduated income tax was unconstitutional because it was not applied uniformly, it also invalidated a 35-year old state law passed by the Legislature that prohibited local governments from imposing an income tax. The court stated the law had violated a constitutional rule that “no bill shall embrace more than one subject.”

Pending an appeal to the state Supreme Court, this means that certain local governments now have the green light to impose a flat income tax. However, the city of Seattle is expected to take the issue to the Washington State Supreme Court to request it overturns previous rulings on the unconstitutionality of income taxes. Should the court overturn the ruling, a statewide income tax could become constitutional.

I can tell you members of the House Republican Caucus are already working on legislation to address the court's ruling and prevent a local income tax. For more background on the income tax battle, click here.

Voters have rejected a statewide income tax 10 times since the Washington State Supreme Court overturned Initiative 69 in 1933, the latest being in 2010 when the proposed income tax measure failed in all 39 counties with 64 percent voting “no.”

Keep in mind, some in the Legislature continue to push a capital gains tax. In fact, the prime sponsor of the bill is new House Speaker Laurie Jinkins. It is possible we could end up seeing this proposal again in the upcoming session.

This ties directly into the income tax debate as the IRS has stated a capital gains tax is an income tax. This op-ed from the Tax Foundation explains why capital gains taxes are income taxes.

Rather than continue to increase taxes and spending, the Legislature would be better served to establish priorities, reduce spending and focus on the services and issues that impact the majority of our citizens.

Road usage charge or the 'pay by the mile tax'

The Washington State Transportation Commission is considering replacing Washington's gas tax with a pay-per-mile charge. The commission is expected to vote on the proposal Dec. 17 and send any recommendations to the Legislature.

About 2,000 drivers voluntarily participated in a statewide pilot project from February 2018 and January 2019 to test out the per-mile road usage charge. They were given plug-in devices that go under their dashboard and track their miles.

Some believe it may be a more sustainable source of funding because with more fuel-efficient and electric cars on the roadways, revenue from the gas tax is decreasing and is not a reliable source of funding to address long-term transportation needs.

I am concerned that a tax based on the distance people drive could disproportionately affect those in rural areas and lower-income householders who live farther away from work because of housing prices. There are some who are also concerned about privacy issues.

Click here to read a story from the Associated Press on the issue.

The Washington State House of Representatives convenes for floor debate on April 17, 2019.

Affordable housing

House Republicans are working on many legislative priorities this interim. There is a lack of affordable housing across the state affecting urban, suburban and rural areas. We need policies and solutions that work for the entire state, not just urban areas.

Rep. Andrew Barkis is our lead legislator in this area. He has identified five tools to make it possible for the private, public and non-profit markets to develop housing stock:

  1. Expedite permitting process at all levels.
  2. Increase zoning density and flexibility.
  3. Tax incentives and exemptions.
  4. Sales tax – develop credit equal to 50% of state and local portion.
  5. Mitigate fees (permit, impact, hookup, etc.).

One issue I am working on that ties into this issue is helping the homeless. I have drafted legislation that would provide a business and occupation tax credit to employers who hire people who are experiencing homelessness.

My legislative staff will also be attending a forum on the local housing situation in the greater Wenatchee area in October. I look forward to learning more about the needs here at home to make sure Olympia's solutions address the issues affecting our region.

Keep in touch
Even though the Legislature has been adjourned for a few months, I serve as your state representative year-round. I encourage you to contact me during the interim if you need assistance navigating state government or if have any concerns or questions. I would be happy to meet with you.

It is an honor to serve you!

Sincerely,


Keith Goehner

State Representative Keith Goehner
12th Legislative District
RepresentativeKeithGoehner.com
122C Legislative Building | P.O. Box 40600 | Olympia, WA 98504-0600
keith.goehner@leg.wa.gov
360-786-7954 | Toll-free: (800) 562-6000