VICTORY! State Senate okays final version of capital gains tax bill, sending it to governor

His­to­ry has been just made in the Wash­ing­ton State Legislature!

More than six years after Gov­er­nor Jay Inslee first put the idea on the table for law­mak­ers’ con­sid­er­a­tion, the Wash­ing­ton State Sen­ate has joined the State House in giv­ing final approval to a bill (ESSB 5096) that would at last levy a cap­i­tal gains tax on the wealthy to bal­ance Wash­ing­ton’s tax code and raise sore­ly need­ed fund­ing to sup­port our fam­i­lies’ child­care needs.

Levy­ing a cap­i­tal gains tax on the wealthy has long been one of the North­west Pro­gres­sive Insti­tute’s top leg­isla­tive pri­or­i­ties. NPI research has con­sis­tent­ly found robust pub­lic sup­port for levy­ing a cap­i­tal gains tax on the wealthy.

A total of 59% of like­ly Wash­ing­ton vot­ers sur­veyed expressed sup­port when we asked about levy­ing a cap­i­tal gains tax to fund edu­ca­tion last May, with just 32% express­ing oppo­si­tion — few­er than the per­cent­age express­ing strong sup­port (42%). 9% said they were not sure. (For more details, read this post.)

“I’m glad to see the Leg­is­la­ture pass Sen­ate Bill 5096,” tweet­ed Gov­er­nor Jay Inslee, adding: “This bill will help us address our upside down tax sys­tem and has been one of my pri­or­i­ties for years. It’s a good day in Wash­ing­ton State.”

The water­shed vote came on the final day of the 2021 leg­isla­tive session.

Twen­ty-five Demo­c­ra­t­ic sen­a­tors agreed to adopt the final ver­sion of the bill nego­ti­at­ed in a con­fer­ence com­mit­tee with the House late last week, while three Demo­c­ra­t­ic sen­a­tors joined all twen­ty-one Repub­li­cans in vot­ing nay.

The roll call was as follows:

ESSB 5096
Cap­i­tal gains tax
Sen­ate vote on Final Pas­sage as Rec­om­mend­ed by Con­fer­ence Committee
4/24/2021

Yeas: 25; Nays: 24

Vot­ing Yea: Sen­a­tor Bil­lig, Car­lyle, Cleve­land, Con­way, Darneille, Das, Dhin­gra, Frockt, Hasegawa, Hunt, Keis­er, Kud­er­er, Liias, Lovelett, Nguyen, Nobles, Ped­er­sen, Ran­dall, Robin­son, Rolfes, Sal­daña, Salomon, Stan­ford, Well­man, Wil­son (Claire)

Vot­ing Nay: Sen­a­tor Braun, Brown, Dozi­er, Erick­sen, For­tu­na­to, Gildon, Hawkins, Hobbs, Holy, Hon­ey­ford, King, McCune, Mul­let, Muz­za­ll, Pad­den, Rivers, Schoesler, Shel­don, Short, Van De Wege, Wag­oner, War­nick, Wil­son (Jeff), Wil­son (Lyn­da)

The Demo­c­ra­t­ic sen­a­tors who vot­ed nay were Kevin Van De Wege of the 24th Dis­trict, Mark Mul­let of the 5th Dis­trict, and Steve Hobbs of the 44th District.

Van De Wege was pre­vi­ous­ly a sup­port­er of the bill when it orig­i­nal­ly came up.

He trad­ed places with Annette Cleve­land, of the 49th Dis­trict, who was in the no camp on the last go-around, but became an aye vot­er for this last and most essen­tial vote, the final step in get­ting SB 5096 out of the Legislature.

Inslee first pro­posed levy­ing a state cap­i­tal gains tax on the wealthy in Decem­ber of 2014, ahead of the 2015 long ses­sion. At the time, Repub­li­cans con­trolled the Sen­ate, and they pre­dictably refused to give the idea any consideration.

Democ­rats regained a work­ing major­i­ty in the Sen­ate near­ly three years lat­er fol­low­ing Man­ka Dhin­gra’s vic­to­ry in the 45th Leg­isla­tive Dis­trict, and then expand­ed their majori­ties in both cham­bers in the 2018 midterms.

These elec­tions yield­ed more sub­stan­tive con­ver­sa­tions about levy­ing a cap­i­tal gains tax, but still no action. The 2018, 2019, and 2020 ses­sions all adjourned Sine Die with no vote on a cap­i­tal gains tax bill in either cham­ber, large­ly owing to the fact that not enough Sen­ate Democ­rats were on board with the idea.

Then came last year’s pres­i­den­tial elec­tion. Though Democ­rats saw no net change in seats in either cham­ber, the com­po­si­tion of each cau­cus changed.

Cru­cial­ly, in the Sen­ate, the 28th Dis­trict ceased to be rep­re­sent­ed by anti-tran­sit Repub­li­can Steve O’Ban and instead became rep­re­sent­ed by Demo­c­ra­t­ic Sen­a­tor T’wina Nobles. Nobles, who host­ed NPI’s 2020 FallFest last autumn, pro­vid­ed a cru­cial vote for ESSB 5096 ear­li­er this ses­sion and did so again today, enabling the bill to secure the con­sti­tu­tion­al major­i­ty need­ed for passage.

Sen­a­tor Nobles’ work and pres­ence in Olympia is a tes­ta­ment to the dif­fer­ence that one per­son can make in our sys­tem of rep­re­sen­ta­tive government.

Sen­a­tor Nobles is a coura­geous and exem­plary law­mak­er. We can­not thank her enough for her out­stand­ing rep­re­sen­ta­tion of the 28th Dis­trict in her inau­gur­al ses­sion. What an impres­sive start to her career in pub­lic service!

Among the sev­en­ty-sev­en Democ­rats who vot­ed for this bill, there are four in addi­tion to Sen­a­tor Nobles who deserve spe­cial recognition:

• State Rep­re­sen­ta­tive Noel Frame, the Chair of the House Finance Committee;
• Sen­a­tor June Robin­son, the prime spon­sor of ESSB 5096 and a vice chair of the Sen­ate Ways & Means Committee,
• Sen­a­tor Chris­tine Rolfes, the Chair of Ways & Means,
• and Rep­re­sen­ta­tive Tana Senn, the prime spon­sor of the com­pan­ion bill in the State House Representatives.

These incred­i­ble women worked tire­less­ly through­out the ses­sion to ensure this vic­to­ry could become a real­i­ty. Their lead­er­ship and stead­fast­ness was piv­otal. We would­n’t be here today with­out their efforts. We hope Cas­ca­dia Advo­cate read­ers will join us in thank­ing them for the time and tal­ent they brought to this cause.

Our work is not done, of course. There is sure to be a legal chal­lenge, although the work of defend­ing SB 5096 in court will fall pri­mar­i­ly to Attor­ney Gen­er­al Bob Fer­gu­son’s office, who we have no doubt will assem­ble an out­stand­ing team to give this leg­is­la­tion the best pos­si­ble defense it could pos­si­bly have.

There may also be a chal­lenge from the oppo­si­tion in the form of an ini­tia­tive to the peo­ple for 2021 or (more like­ly) an ini­tia­tive to the leg­is­la­ture for 2022.

Through our Per­ma­nent Defense project, NPI has near­ly two decades of expe­ri­ence com­bat­ing right wing bal­lot mea­sures. We will glad­ly con­tribute all of that expe­ri­ence to the coali­tion that forms to defeat any bal­lot mea­sure that attempts to over­turn this vital­ly impor­tant, fis­cal­ly respon­si­ble legislation.

Today, though, is a day of celebration.

Today, the leg­isla­tive process worked, and yield­ed a bill that will final­ly require the wealthy in our state to pay a bit more in mem­ber­ship dues to sup­port the essen­tial pub­lic ser­vices that make our com­mu­ni­ties strong and healthy.

Onward to the bill signing!