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UPDATE – Gov. Inslee signs bill giving state workers a tax break on parking, transit costs

Post by Brad Shannon / The Olympian on May 3, 2013 at 11:57 am | No Comments »
May 3, 2013 3:00 pm
Rep. Sam Hunt
Rep. Sam Hunt

Gov. Jay Inslee signed a bill into law today that lets state employees pay for their work-related parking and transit costs using pretax earnings. Democratic Rep. Sam Hunt of Olympia sponsored the measure, House Bill 1456, and he said it offers some small financial help to state workers.

“This is their pay raise,’’ Hunt half-joked.

Keith Cotton, manager of commute-trip reduction for the state Department of Transportation, said his agency has about 800 workers who use bus passes that cost the worker about $25 a month. For someone paying that rate and taxed at the 25 percent marginal rate, the savings would be about $75 a year, or just over $3 per pay period.

Department of Enterprise Services spokesman Steve Valandra said there are about 5,000 state employees who park around the Capitol Campus and pay $25 per month for parking. The savings would be about the same at the 25 percent tax rate.

The Washington Federation of State Employees had pushed for the measure for three years, and union president Carol Dotlich said the savings can make a small difference to a lower-paid custodian at the University of Washington.

“We hope this encourages more state employees to take the bus,” federation spokesman Tim Welch said.

The bill passed by large margin in the Senate – 41 to 7 with 15 Republicans joining all Democrats in favor – and was closer in the House where 11 Republicans joined Democrats to pass it 65 to 31 [see roll call].

The bill drew no formal opposition in hearings. But Republican Rep. Vincent Buys of Lynden spoke against the measure when it was approved in the House Government Operations and Elections Committee, chaired by Hunt.

“We just have some concerns with… the precedent it continues to set about nonessential things coming out pre-tax,’’ Buys said before voting against it.

Welch decribed the House votes against the measure a symbolic protest against commute-trip reduction subsidies.

Hunt said the alignment of state law with the Internal Revenue Service rules allowing the tax breaks was something the federation had wanted to do and he supported the idea.

King County government offers several similar options to its employees, according to this web site.

“We worked this bill for three years now – the last two years it died on the calendar in the Senate,” Hunt said, noting it was resurrected at bill cutoff. “It passed in the last hour.’’

All Democrats present for the votes supported the measure. South Sound Republicans supporting the measure in the House were Reps. Gary Alexander of Thurston County; Jan Angel, Poulsbo; Cathy Dahlquist, Enumclaw; Drew MacEwen, Union; J.T. Wilcox, Yelm; and Hans Zeiger, Puyallup. South Sound Republicans backing it in the Senate were Sens. Randi Becker of Eatonville; John Braun of Chehalis; Pam Roach of Auburn.

Under the bill, state law would be brought into alignment with federal law that allows such deductions. State employees already are able to pay for their health-insurance premiums out of pre-tax earnings.

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