Elizabeth New (Hovde) says lawmakers need to get serious about their spending problem

Elizabeth New (Hovde)
Washington Policy Center

A state agency and two different legislative commissions had meetings this week in which they discussed health care issues in Washington state, legislative priorities and federal health care reforms eventually coming our way. 

“The sky is falling” was the tone whenever federal reforms were mentioned and doom was predicted, despite remaining unknowns and failing to mention the many state-level actions harming Washington’s health care landscape. (Read more about recent legislation that harms the health care system here, here and here.) 

Worse than trying to pin all our health care woes on federal Medicaid reforms and the likely and rightful expiration of temporary, enhanced subsidies that distort the health insurance market, help along fraud and hide the inability of the Affordable Care Act to make care more affordable, was this: State employees, legislators and commission members expressed the need for the state to try and mitigate the impact of changes for people relying on other taxpayers for their health care needs — both people in financial need and people not in financial need. Meanwhile, people not relying on taxpayers for their health insurance are dealing with skyrocketing health care costs of their own, of course, and cost-containment is being ignored and made worse by state lawmakers.

What will this concern about federal reforms and a commitment to mitigation mean? More proposed taxes, we already know. 

‘Here a tax, there a tax’

One of the proposals state legislators will likely consider is House Bill 2100 crafted by Rep. Shaun Scott, D-Seattle. The proposal will export a failed tax experiment from Seattle across the entire state. (Read more about the Seattle experiment from my colleagues here and here.)

Scott, a member of the Seattle Democratic Socialists of America, held a news conference Dec. 2 to announce what he’s calling the “Washington Well Fund.” He says it will help protect the state and health care services from Congress’ controversial tax package.

The proposal would impose a 5% payroll tax on private employers with workers who earn more than $125,000 a year. It would apply to companies with more than 50 workers, payroll in excess of $7 million and gross receipts of more than $5 million. With four Democratic cosponsors already listed on HB 2100 and the support of overly powerful unions, this legislation likely has legs. 

“The way for Washingtonians to fight back is to build a bolder Washington: a Washington that defends the programs that people depend on, while the other Washington defunds them,” Scott said.  

I hope the legislation is passed over, as it should be, but if it’s not, it needs to include an exemption for health care providers. The effort, after all, claims to be helping with health care affordability. With or without such an exemption, the Washington Well Fund with make the state’s economy sicker. 

Another proposed tax that could soon be added to the list of Washington state lawmakers’ self-inflicted health care pains was pitched last year and is back for the coming legislative session. Titled, “Funding health care access by imposing an excise tax on the annual compensation paid to certain highly compensated hospital employees,” HB 1560 and its companion, SB 5638, seek to fund health care needs by introducing an excise tax on high-earning hospital employees.

That will decrease health care costs? (Insert raised eyebrows and a scoff or belly laugh here.) The bills already have 23 co-sponsors. 

Washington Democrats are also considering a potential income tax on millionaires, despite state constitutional guidelines. That would drive more high earners out of the state and won’t end well. We don’t need the state’s spending problem split among fewer people. We rely on high earners to be able to provide many state taxpayer services available to the rest of the state’s residents — including Medicaid and a Medicaid-like program for people regardless of their immigration status.

Lawmakers need to get serious about their spending problem. They need a priority-based budget. And they need to start showing employers and high-earning workers that they are not simply seen as an ATM machine. 

Elizabeth New (Hovde) is a policy analyst and the director of the Centers for Health Care and Worker Rights at the Washington Policy Center. She is a Clark County resident.

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