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Capital gains tax bill heads to House after passing state Senate

OLYMPIA — The state Senate passed a capital gains tax Saturday night, the only time since it was first floated six years ago that the controversial proposal has been up for a vote in the Senate.

After a more than four-hour debate, the bill passed 25-24 despite stiff opposition from Republicans who call it an unconstitutional income tax. Three Democrats also voted against it.

Passage in the Senate first is a huge step toward the proposal becoming law. In the past, House Democrats have said they had the votes to pass it but didn’t want to send it to the Senate, where it would almost certainly fail.

The proposal has changed significantly since it was first introduced. The version that passed Saturday would apply a 7% tax on the sale of stocks and bonds, personal property and businesses, but only if those profits exceed $250,000 annually. It would not apply to the sale of a home, commercial real estate, retirement accounts, livestock and other properties. The sale of a family-owned small business that makes less than $10 million a year would be exempt, as well as some real estate sales if the sale is also subject to a real estate excise tax, which passed the Legislature two years ago.

Bill sponsor Sen. June Robinson, D-Everett, said the tax is the first step in solving Washington’s regressive tax code where lower-income residents are paying a higher percentage of their income in taxes than high-income residents.

“It is not a panacea,” she said during the floor debate. “It is not going to get us there overnight, but it is an important step forward.”

The state would begin receiving the tax revenue in 2023. It would bring the state about $550 million in revenue a year. About $350 million of that would go toward the state’s Education Legacy Trust Account to fund child care priorities included in a Democrat-sponsored Fair Start for Kids Act, which also passed the Senate on Saturday. The next $100 million would go into the general fund, with the remaining going into a newly created taxpayer fairness account.

One amendment passed Saturday removed an emergency clause on the bill, which would have put the bill in place immediately and removed the opportunity for citizens to file a referendum to repeal the tax. With the removal, citizens now have the opportunity to file a referendum to repeal the tax.

Sen. Brad Hawkins, R-East Wenatchee, voted against the bill. In a letter he sent to his constituents following Saturday’s vote, he referred to the measure as a “state income tax on capital gains.” He called the Senate’s passage of the bill as “beyond disappointing, although not entirely unexpected.”

“In the past, the Senate has been a helpful backstop against new tax proposals. In recent years, either Republican senators or a few conservative Democrats helped block the income tax,” Hawkins said in his letter. “I’m afraid that today’s 25 to 24 vote shows that the once-strong Senate firewall sadly no longer exists to protect Washington citizens from awful taxation.”

Opponents call it an unconstitutional income tax that will almost certainly be challenged in court. Sen. Lynda Wilson, lead Republican on the Ways and Means Committee, has said “every other state in the Union calls it an income tax.” Republicans also argued Saturday that this tax could lead to a broader income tax across the state.

Democrats, however, say the bill will hold up in court, just push off implementation of the bill, which they say could help make Washington’s tax structure more progressive and equitable, where lower-income residents aren’t paying a higher percentage of their income in taxes than high-income residents.

“Enough is enough,” Sen. Rebecca Saldaña, D-Seattle, said on the floor. “For many years, we’ve known our Washington tax code is upside down.”

Senate Minority Leader John Braun said Saturday the state can’t fix the tax system by collecting more money, regardless of who contributes it.

“What you have to do to make the system more fair is to reduce the tax burden on those at the bottom of the spectrum,” he said.

Sen. Jeff Holy, R-Cheney, said Eastern Washington hasn’t experienced the same economic growth that King County and Western Washington has.

“This is not King County,” he said. “This is not west of the Cascades.”

Democrats have said all session that this is the year to pass a capital gains tax, to help make up for lost revenue due to the pandemic and to further invest in other programs, such as underfunded child care issues. Spokane Democrat Andy Billig told reporters two weeks ago that it isn’t realistic to say the state’s budget is balanced and then want to fund large programs, such as the Working Families Tax Credit or child care, without new revenue.

”The question is, do we want to do the bare minimum or is this the moment where we actually invest?” Billig said.

Wilson said Saturday that while Democrats want to use this tax to make longterm investments, it is “the most volatile tax,” which makes it difficult to fund longterm priorities.

Opponents of the bill say the state is likely looking at a revenue boost in the March 17 revenue forecast, which is what lawmakers will use to write the budget. The state will also likely get a large payout from the federal government if the $1.9 trillion stimulus bill passes Congress soon. Most of that money, however, will go toward one-time COVID-19 related costs.

”Why are we doing this now?” Wilson said on the floor. “Why are we choosing to create another tax on the taxpayers here in Washington?”

With half of the session left, a vote on a tax this early in the session is slightly unusual for the Legislature, which often votes on taxes and the final budget within the last few days of the session.

The capital gains tax bill now heads to the House of Representatives for further consideration, where it will likely have the support it needs to pass.

”Fifty percent of the legislative process is still to be continued as this goes to the other body,” Billig said on the floor. “We’ll keep working on the details.”

Pond Skim draws crowds on final day of season at Leavenworth Ski Hill

LEAVENWORTH — It was a bright, sunny day Saturday — the last day of the ski season for Leavenworth — as the skiers took the big rope tow to the top of the hill at the Leavenworth Ski Hill.

One by one the skiers took turns barreling down the hill toward the 25x50-foot pond, carefully measuring their speed on the way down. Too fast and they would go flying across the pond, sailing out into the mushy snow. Too slow and they would sink into the 3 feet of water.

Skiers of all ages were trying their luck, a mix of ages 7 to 17 and even some adults. The little ones often had the tougher time because they couldn’t generate enough speed with their lighter weight.

It’s all part of the great fun called the Pond Skim, which has taken place on the final day of the ski season at the Leavenworth Ski Hill for at least three years and maybe longer than that.

Leavenworth Winter Sports Club General Manager James Munly, who has been associated with LWSC for more than 10 years, said locals have told him the tradition, in some form, has been going on for 50 years.

“This is the second year we’ve been able to get a full pond. Last year, we ran out of snow way too fast. This year, we were able to scratch (a pond) together with some man-made snow we made earlier this year and fire up our water pump and fill this thing full of water,” Munly said.

No doubt, the Pond Skim is a crowd-pleaser, at least on a bright sunny day. The parking lot at Ski Hill was overflowing with cars lining up onto Ski Hill and Titus roads. Despite the crowd, everyone was wearing a mask and staying separated, following COVID-19 protocols.

Munly said LWSC moved the pond further up the hill this year, so the skiers could hit the pond with greater speed to have a better chance to make it across.

“A couple of years ago, we had the pond further down and it was 60 degrees. The water was just melting so fast. It was great to be able to move this up and see people make it across easier,” Munly said.

bonnicksen / World photo/Mike Bonnicksen 

Atticus Zehm, 12, of Leavenworth didn’t make it across the pond and prepares for a dip in the icy Pond Skim waters Saturday at the Leavenworth Ski Hill.

Volunteer Cat Vollinger said the Pond Skim was a good way to bring the community together.

“It’s a fun way to end the season. A grand finale, I guess you could say,” Vollinger said. “It’s cool to watch the kids being stoked.”

Brandon Tveten participated in the Pond Skim along with his children. He likes the event because everyone is welcome.

“You just have a good time. They create such a good environment where you can just play and not worry about getting hurt. It’s great family fun,” Tveten said. “We’re up here all the time. It’s a great venue. It’s been a fantastic year. I can never remember skiing this late in the year.”

Munly said this has been a great season for the club financially. Even with the pandemic, he said LWSC was able to put money in the bank as well as keep the community and employees safe and healthy this past winter.

“We had just enough snow to make it all happen this year, so it has been great for the club. We are thankful for a great season and are looking forward to getting some good projects done this summer so we can get ready for next year,” Munly said.

Planned summer projects include new restrooms by the lodge, thinning trees and brush on the nordic trails and putting in culverts so rain events don’t destroy the trails, which are used in the summer by bikers and hikers.

He said LWSC is also going to pay off its existing groomer and buy another groomer.

“We are buying another because you can’t really have Nordic and alpine skiing without a groomer,” Munly said. “We’re also looking into doing some trail extension up here if we get approval from the Forest Service to do some summer operations.”

Wenatchee garbage rates changing; more options available

WENATCHEE — Wenatchee residents need to decide by April 9 whether to keep their 96-gallon garbage can and pay a higher rate that goes into effect May 1, or save money and opt for a smaller container each week.

The city approved a new contract with Waste Management Northwest in January that moves from the current “one size fits all” model to a “pay-as-you-throw” model.

The “pay-as-you-throw” model is popular in communities across the region, according to Tyler Mackay, Waste Management’s manager of public sector solutions in Wenatchee. “Communities like it because it encourages waste reduction and better recycling,” he said.

The new rates will depend on the size of the garbage cart, with options ranging from the current 96-gallon container (at a cost of $28.69 per month, up from $21.31 per month) to a 64-gallon ($21.55 per month) and a 35-gallon container ($16.80 per month). Garbage service is billed quarterly.

“This is about choice,” Mackay said. “Historically, all Wenatchee residential customers have had the same 96-gallon garbage cart. Now, if you are a super recycler or a senior who creates a very small amount of garbage, you pay less. Individual customers decide what’s best for them.”

City customers continue to receive weekly recycling service in the 64-gallon blue recycling carts as part of the package.

Starting May 1, though, additional garbage bags or recycling items set out for collection that don’t fit inside the container will incur a $3.92 per bag charge.

Previously, customers were not charged for the extra items.

Waste Management drivers this week are attaching notices to customers’ garbage containers with information about the changes to service and the April 9 deadline to choose a smaller container. Changes can be made after that, but the new carts might be delivered after the new rates take effect.

The rule of thumb is a 35-gallon cart will hold about two plastic bags of garbage, a 64-gallon cart will hold three bags and a 96-gallon container holds about seven bags. The containers are on display at the Wenatchee Valley Chamber of Commerce office, 137 N. Wenatchee Ave., and at the Wenatchee Transfer Station, 1421 S. Wenatchee Ave.

Waste Management earlier sent emails to about half of the city’s residential customers — those who had an email on file, Mackay said.

“In the first week, we had about 1,200 residents, or 15% of our customers, respond,” he said. He expects that number will climb after the cart tags are attached this week.

Some other changes also are being made to the recycling service. Starting May 1, glass will no longer be accepted in the curbside recycling service, “due to lack of local glass manufacturers,” according to the information sheet posted by Waste Management.

For details on cart selection and other coming changes, go to wmnorthwest.com/wenatchee.

Year-round schooling, other programs get a bipartisan push

SEATTLE — When Curt Guaglianone last considered year-round schooling, it was the 1990s, he was a principal at a school in Central California, and his district didn’t have a choice.

Schools were “bursting at the seams” as families flocked inland from the Bay Area, said Guaglianone, now superintendent at Mount Adams School District in Yakima County. His California district was forced to stretch the school year past nine months: To ease crowding, students and staff rotated through school buildings in shifts.

Guaglianone is now considering the concept as a way to help students whose education was disrupted during the pandemic. Instead of sending kids to school in shifts, districts could sprinkle weekslong breaks across all 12 months of the school year.

Mount Adams is one of several Washington school districts eyeing the idea as a bipartisan group of lawmakers work to make it a reality. Legislation that’s moving through the state Senate would offer 20 school districts a modest budget boost if they voluntarily balanced their school days across a calendar year. Mount Adams, where about 95% of the district’s 900 students are from low-income homes, would qualify: Senate Bill 5147 would prioritize lower-income districts with no more than 10,000 students. The pilot program is limited to smaller districts, for now, because it would be easier for them to make the switch.

The nine-month school calendar is thought to have roots in the planting seasons that defined the country’s largely agrarian culture in the 1900s.

Its true origins are more complicated.

Over the decades since, a summer break has become common for a variety of reasons: Families want vacation time, students need a break or time to work, school budgets are tight, some schools aren’t air-conditioned.

But it’s outdated, some say.

“If the school districts could design the school calendar today, I don’t know that they’d ever design it the way it is,” said Sen. Brad Hawkins, R-East Wenatchee, ranking Republican on the Senate Education Committee and a lead sponsor of the bill. “If school districts aren’t prepared to consider doing things differently as a result of this pandemic, when will we ever do it?”

Washington school districts can change their school calendar under current Washington law, and a small number already have. Students in districts such as Waterville and Pe Ell, for instance, have longer school days but go to class only four days a week. The new legislation, if approved, would encourage more districts to experiment.

The measure is gaining steam as policy makers recognize the exhaustive list of ways that time away from school buildings is affecting children. National tests show students are slipping in math and reading, for instance, and more students are facing mental-health crises. Some students still lack access to hot meals or school counselors.

With about 70% of the state’s students still learning from home, lawmakers are adding provisions to help all Washington children adapt to an eventual return to school buildings. In addition to the calendar pilot program, the bill also includes funding for all districts statewide to add up to three additional school days; the state currently provides funding for 180 days.

Districts where a majority of students are low-income could apply for funding for an additional five days. Through a proposed amendment, the bill’s sponsors also want to require that state education officials create grants to expand dual language learning and enrichment activities and provide funding for student assessments to help identify students who are falling behind. And all districts could apply for funds to cover a week of on-campus orientation activities, like outdoor games or time to socialize with friends, before the start of the 2021-22 school year.

“We hope schools will be open next fall, but it would be lovely to have schools be able to open even a couple of weeks ahead,” said Senate Education Committee chair Lisa Wellman, D-Mercer Island, who is co-sponsoring the bill with Hawkins. When students return, those first few days, “will be spent adjusting to getting back to school.”

In all, the legislation is expected to cost more than $337 million, and could be funded through a mix of state and federal dollars.

Guaglianone would like to see even more funded days — 20 or 25 perhaps — but said the legislation zeros in on an important point: Simply stretching 180 days across a calendar year isn’t enough.

“One of the ways we will catch students up is if we give them more learning time. More complete, direct, intensified and intentional learning time,” he said. “If we do it just for the sake of extending the calendar, it’s not going to be as effective.”

The state’s top education official, Chris Reykdal, says he agrees. Reykdal has advocated for a longer school year since at least 2017. He hoped to add 20 or 30 days to the calendar as a way to close equity gaps, improve student achievement and add time for language instruction.

Reykdal supports the legislation but says he wished it also allowed more districts to pilot a yearlong calendar. Although pandemic school closures have amplified the costs of time away from school, he said, arguments in favor of a yearlong calendar remain the same. “More services for kids year-round, less crushing pace, more sustainability for educators, time to reflect and evaluate student learning along the way,” he said.

Year-round schooling comes with added costs, such as year-round maintenance and air conditioning in the summer, even when districts don’t tack on additional school days. And changing the calendar poses logistical challenges, especially for districts that go it alone. Sports schedules become more difficult when neighboring districts stick to a traditional calendar. And teachers who live in one district but work in another face the headache of juggling differing schedules.

But the tradition of long summer breaks has its own consequences. Many families struggle to pay for child care or camps to keep their children occupied during long summer days. Children who rely on school for hot meals don’t have access to their school cafeteria. And although data is limited — less than 5% of American schools operate year-round — a handful of studies suggest that year-round schooling could prevent the fade of knowledge that happens over summer break, especially for students from low-income homes, whose families may not be able to afford summer enrichment programs.

At Mount Adams schools, where about 56% of students are learning in person, the rural district has a hard time keeping students attending and engaged even in the best of times, Guaglianone said. A majority of the district’s students live in poverty and some face other challenges, like an expectation that they work in agriculture to help support their families.

Guaglianone sees more time in school as one solution and floated the idea of a balanced calendar a couple years ago. The school board responded favorably. Any change to the school calendar would also require buy-in from teachers and families, he said. And it would be nice, he said, if other neighboring districts tried something similar.

”You keep that [schooling] consistent throughout the school year,” he said, and children are “less likely to go through not just summer slide, but slumps in social-emotional aspects of their lives.”