Inslee, Washington Democrats Discuss Delaying WA Cares Long-Term Care Payroll Tax

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OLYMPIA — Gov. Jay Inslee and some Washington Democratic lawmakers are in discussions to potentially delay the long-term care payroll tax set to begin Jan. 1.

The talks come after state Senate Democratic leaders on Wednesday sent Inslee a letter urging him to delay the tax to fund the WA Cares program until the beginning of January 2023.

Passed in 2019 by the Legislature and signed by Inslee, the WA Cares Fund creates a 0.58% payroll deduction on employees, set to begin in January. Starting in 2025, eligible beneficiaries could then start claiming up to $36,500 to help pay for things like home care, meal delivery, assisted living or other needs.

But a range of critiques has emerged this year as the program began to get off the ground, with concerns that too many people would pay the tax but never receive benefits, as well concern over the inability of some people to take advantage of the one-time opt out from the program this year.

On Thursday, Inslee said he didn't have authority to delay the collection of the tax himself, but discussions to explore a delay were underway.

"I do not have the authority to take some unilateral action on that, it would take some action by the Legislature," Inslee said during a regularly scheduled news conference. "But I am sensitive and empathetic ... and so I am talking to legislators about other approaches that can allow them to pause" tax collections.

For the Legislature to make a change, Inslee would have to call them in to a special session before the end of the year.

But officials are looking at another option for a short-term delay in the tax collection that might not require a special session, Inslee said.

"It would basically pause the collection of any taxes associated with this while the Legislature makes these refinements," said Inslee. Officials are checking if that can be done lawfully, he added.

The governor said he would support a delay on the tax collection, "if the Legislature has a meaningful way" to address issues with the program.

Opponents and even some supporters acknowledge a range of people who will pay into the tax, but never become eligible for benefits. That includes roughly 150,000 people who work in Washington but live in another state; workers who ultimately leave to retire elsewhere; and military families coming in and out of the region.

Other workers were not able to make use of a one-time opt out to the program because private insurers offering long-term coverage stopped offering policies, a point that Democratic senators also mentioned in their letter.

In their letter to Inslee, Senate Majority Leader Andy Billig, D-Spokane, and others reiterated their support for the long-term care program's goals, "but we also recognize that changes to the program are needed."

"In order for the Legislature to have time to listen to the public, examine all the necessary data, and engage in a robust debate of what modifications must be made, we believe that the program must be delayed until January 1, 2023," according to the letter, which was also signed by deputy leaders Sens. Rebecca Saldaña, of Seattle, and Manka Dhingra, of Redmond.

Lawmakers are scheduled to return to Olympia in January for the regularly scheduled 60-day legislative session.

In a statement, Jessica Gomez, campaign manager for Washingtonians for a Responsible Future, a coalition advocating for the new long-term care program, advised against a delay.

If a delay of tax collections also wound up pushing back the date that people became eligible for services, said Gomez, it "would harm an estimated 38,000 disabled, elderly, or seriously ill people who are desperate for long-term care benefits in 2025."

House Democratic leaders had earlier rebuffed calls for a delay in the program, which came about through legislation sponsored by Rep. Laurie Jinkins, before she became House speaker.

On Thursday, House Majority Leader Pat Sullivan said he just saw the letter from Senate Democrats, and that lawmakers were already hard at work coming up with fixes to address some of the problems.

Lawmakers are still discussing what to do, Sullivan said, but "A delay would give us more time to address some of these issues."