Opinion: Initiative 2124 would make a new payroll tax optional for workers

Initiative signatures delivered Thursday could allow voters to do what the Democrat-led legislative body has refused to do: Protect the earnings of workers, including low-income workers.

Since July, most W2 workers have been required to give a portion of their paychecks over to the state for long-term-care services that won’t necessarily be reserved for them

Elizabeth Hovde
Washington Policy Center

Initiative signatures delivered Thursday could allow voters to do what the Democrat-led legislative body has refused to do: Protect the earnings of workers, including low-income workers.

Since July, most W2 workers have been required to give a portion of their paychecks over to the state for long-term-care services that won’t necessarily be reserved for them. In many cases, a worker’s income will be used by other Washingtonians — regardless of their need.

Workers pay 58 cents of every $100 they make for WA Cares. Concerns about the program’s solvency, even before tax collection began this summer, has had some lawmakers, state agency heads and stakeholders discussing possible rate increases, benefit decreases or more stringent eligibility qualifications than already exist.

Aware of the many shortcomings in the LTC law, supporters of I-2124 said they gathered over 420,000 signatures. (A total of 324,519 signatures are required to get the initiative on the ballot.) If the initiative lands on the November 2024 ballot and is approved by voters, the measure would allow employees to opt out of WA Cares and its payroll tax collection at any time — and with no conditions. It would do that by requiring people to opt into WA Cares if they want to keep contributing earnings to a state program that might or might not benefit them someday. Failure of the initiative would retain the mandatory employee payroll deductions for WA Cares.

The initiative to the Legislature could also be adopted by lawmakers during the legislative session that begins Jan. 8, but that’s doubtful. Past legislation that would have repealed the misguided law was ignored. Leadership has not been excited about legislation seeking to do what this initiative would do: make WA Cares optional.

Washington Policy Center has wanted the LTC law repealed so workers can use, save and invest their money in ways that meet their actual life needs and with a greater rate of return and guarantee. There are many hurdles in the way of qualifying for a benefit from WA Cares. The biggies? In addition to having the unfortunate need for LTC services, a Washington worker needs to reside in the state to use his or her WA Cares contributions, no matter how much money he or she paid into the fund. Workers also must pay the tax for 10 years without a break of five or more years and work a certain number of hours during each of the qualifying years. Workers must meet health qualifications that are more difficult than in private LTC insurance plans.

That lack of a guarantee has had far more people opting out of WA Cares, if they meet limited exemption eligibility, than people opting in if they aren’t required to pay. The number of approved exemptions from WA Cares in the fourth quarter of 2023 was up to 533,978. The number of people who had opted into the program was just 381.

Creating awareness about a graying population’s need for long-term care and protecting Medicaid LTC funds from abuse is where state policy should have focused and where it should head. Medicaid is a safety net that taxpayers already support to help people without resources receive long-term care.

Washington workers have all sorts of life needs. Lawmakers telling them which ones they can save for and acting as their piggy bank — then handing their money over to others in many cases — isn’t good policy. Nor was creating a safety net for people not in need.

Elizabeth 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.

Since July, most W2 workers have been required to give a portion of their paychecks over to the state for long-term-care services that won’t necessarily be reserved for them

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