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House panel votes to delay Washington’s long-term care tax to 2023

House Republican Leader J.T. Wilcox, R-Yelm, is displayed on video screens as he speaks remotely following opening remarks from House Speaker Laurie Jinkins, D-Tacoma, during the opening session of the Washington state House of Representatives at the Capitol in Olympia in January.  (Associated Press)

OLYMPIA – A House panel has voted to delay the long-term care tax until 2023.

On a 31-2 vote, a House committee approved a bill Thursday to delay the implementation of the tax. On a 23-10 vote, it also approved a bill that would create voluntary exemptions of the tax for veterans, spouses of military members, nonimmigrant temporary workers and employees who work in Washington but live outside the state.

Both bills still need to pass the full House and the Senate before becoming law.

Bill sponsor Rep. Pat Sullivan, D-Kent, said he had concerns about delaying the bill for 18 months because there are a number of people who do need the benefits of it sooner than that. However, the delay will give lawmakers a chance to make sure the program runs more effectively, he said.

“We don’t do this lightly,” Sullivan said.

Gov. Jay Inslee last month ordered the Employment Security Department not to collect the tax from employers in anticipation of the Legislature delaying the program altogether. Employers, however, can still take the tax from their employees’ paychecks, but lawmakers have urged them not to.

Lawmakers have said delaying the long-term care tax would be a top priority in the first few weeks of the session. Sullivan on Thursday said the 18-month delay will give lawmakers a chance to make changes to the bill, whether that be later this session or next year.

Critics have raised concerns about the sustainability of the tax and the fact that Washington workers who live out of state pay the tax but can’t access its benefits. The state estimates that’s about 150,000 people.

The program requires workers to pay 0.58% of their wages into the fund. Those who qualify can access the benefit – up to $36,500 – beginning in 2025. The bill passed Thursday would delay the date that it can be accessed to 2026.

The benefit can be used on a number of services, including professional care in-home or at a facility, home safety evaluations, equipment, training for caretakers, meals or transportation.

Employees can opt out of the tax but must purchase a private long-term care insurance plan to do so.

While Democrats look to fix the program, first passed in 2019, Republicans hope to repeal the program altogether.

A proposal by House Republican budget lead Drew Stokesbary would repeal the tax and replace it with a private program. It would give private insurance carriers a tax credit from the state for all reinsurance premiums paid.

“I remain skeptical about the efficacy of this program overall,” Stokesbary said Thursday.

Laurel Demkovich's reporting for The Spokesman-Review is funded in part by Report for America and by members of the Spokane community. This story can be republished by other organizations for free under a Creative Commons license. For more information on this, please contact our newspaper’s managing editor.