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SEL President speaks out about Washington's new long-term care act

Schweitzer Engineering Laboratories partners with chambers of commerce, businesses to oppose Washington’s Long-Term Care Act

SEL continues to oppose the Washington Care Act and is partnering with chambers of commerce and businesses across the state to host informational sessions and encourage people and businesses to send letters expressing their objections to Governor Inslee.

Letters from SEL Founder, President, and Chief Technology Officer Edmund O. Schweitzer III to Governor Inslee are included below:

August 11, 2021 

Governor Jay Inslee Office of the Governor
PO Box 40002 
Olympia, WA 98504-0002 

Subject: Growing concern and frustration with the Washington Long-Term Care Act

Dear Governor Inslee:

As a follow-up to my letter on August 5, 2021, regarding the new payroll tax slated to take effect on January 1, 2022—please consider the additional information below from hundreds of individuals concerned about this new proposal, and the negative impact it will have on so many hard-working employees. I again implore you to use your executive authority to stop this misguided, unfair, and unjust tax.

SEL conducted twelve dispassionate educational sessions attended by over 600 employee-owners. Although our human resource experts were anticipating some confusion over your new law, we were surprised at the high levels of frustration and emotion the law provokes…once folks realize what’s in it.

Not one employee had a positive reaction to this act. In fact, over 400 employee[1]owners responded in writing to our human resource team. All 400 responses were negative.

A few excerpts follow:

“I’ll opt out as soon as I can, but it bothers me that my kids, some of whom have expressed interest in working at SEL in the future, will not get that opportunity.”

“Just to clarify since I live in Idaho, I am paying about $500 a year for something I cannot use since I am not a resident of Washington?”

“Really, so Idaho residents have to pay this also? And will we not be able to access those monies when we retire in Idaho or another state?”

“Reading through the requirements, the only people who get to use this are residents, so why do nonresidents have to pay into it?”

“The direct payroll form of the tax is rather intrusive, but my biggest concern is that this is a tax/requirement for Washington employees, regardless of whether you are a Washington or Idaho resident…. On a personal note, I for one would not like to have $30-$40 deducted every month from my paycheck. As a father of 6 kids, I have other needs right now that the money would go to.”

“As a former Idaho Legislator, an Idaho resident, and an employee at SEL, I was stunned to hear that the Washington Legislature and Governor, in good conscience, have passed a bill that they believe passes any kind of ethics test for fairness and decency.” – Cindy Agidius

Last Friday, a local attorney stated in a public setting, “Why would anyone ever want to work in Washington?” This was in the context of the details of your law, imminent deadlines, and vanishing opt-out choices.

This same sentiment from employers and employees, community leaders and others, was echoed and amplified in news stories from Pullman to Port Angeles and cities and towns in between.

Several individuals and business owners have reached out to us, sharing their fears and concerns, after reading about ours in the local papers.

Last Thursday, I connected with Governor Brad Little, advising him of the new mandate and the impact it would have on Idaho residents who are working in Washington, paying this tax, and not receiving any benefit. He responded, “Ed, you’re living and working in the wrong state!”

Governor Little makes a solid point.

As of today, 983 Idaho SEL employee-owners work in Washington. Many of them want to work for SEL in Idaho. Your tax is one more reason.

Many Washington employee-owners want to move to Idaho and work for SEL there. I’d love to see Washington be as desirable to our employee-owners as Idaho. Living near the border gives us some valuable perspectives, I believe.

I feel several kinds of responsibilities:

1. To our employee-owners. We’re helping them understand this law, and providing as many options as we can, today and going forward.
2. To our community. Over a dozen chambers and other institutions supporting individual freedom to choose are sharing their members’ frustrations, disbelief, and infringement of self.
3. To my wife Beatriz and me, and our family. We’ve got choices, and we’ll choose a legal and ethical option where we will neither pay this tax, nor buy insurance that we don’t want or need…from an insurer who really doesn’t want to sell it.

Your law pushed people into a corner: we’re finding people were generally unaware; your rules are still in the works inside the executive branch; private options are vanishing; deadlines are tight; and the state will tax us, while it deliberates on whether or not to grant an individual an exemption. Although the tax begins 1 January, the state gives itself a year to review requests for exemptions…putting government ahead of We the People one more time. We don’t see the rules until 1 October; we must apply within the 31 days of October; but the state gets to take a year to decide. This is wrong.

People are starting to realize this is insolvent, as well as wrong. Folks expect your new tax to grow…invoking more fear, uncertainty, and doubt in their future in Washington. 

Understanding and responding to your law, with its sudden deadlines, indefinite rules, few choices to opt out, and other unfairness, is distracting us from our “day jobs.” …one more tax. 

 Again, I implore you to use your executive power to back off, slow down, reverse, and stop. Thank you in advance for your serious consideration. 

 Sincerely,

 Edmund O. Schweitzer, III PhD 
President and Chief Technology Officer 
Schweitzer Engineering Laboratories, Inc.

 

August 4, 2021

Governor Jay Inslee
Office of the Governor
PO Box 40002
Olympia, WA 98504-0002

Subject: Washington Long-Term Care Act: Please stop it before it goes any further.

Dear Governor Inslee:

I’m very concerned about the Washington Long-Term Care Act.

So are thousands of other SEL employee-owners in several states.

Forced participation in a state-mandated program is no substitute for individual choice and responsibility.  Some Washingtonians want long-term care insurance, and are free to choose to purchase it, in various plans offered by several providers, that best suit their personal situations.  One size does not fit all! Others don’t want it or need it.

I am urging you to use your authority to stop this Act before employees begin paying for something they don’t want, need, or may never see even if they did want it.  We’ve heard a lot from folks, nothing positive.

We believe the state should not be forcing people to buy a product.  Just as we do with our homes, transportation, health insurance, groceries, and so on, we need to be free to choose.

The State Actuary of Washington concluded that the program will not raise enough money to pay the promised benefit, making further tax increases and larger cuts into employee wages inevitable. Sadly, with the program underfunded by $15 billion, today’s annual tax of $580 (per $100,000) will likely increase to thousands of dollars a year.

The SEL Human Resources team held ten informational sessions with more than 600 of our employees attending. In addition, the team received over 400 employee emails stating they do not want this so-called benefit.

Our employees realize that many will be taxed without ever being able to qualify for this program.  They also realize there’s only a one-time opt-out; and it won’t be available to their successors in hire.

Many of our Washington based employee-owners are Idaho residents. They would pay the tax, but not ever benefit from it. Unlike participants in a true, private insurance program, these employees will have their monthly premiums collected, then distributed by the state to others.

That’s not insurance.  That’s market distortion and picking winners and losers.

Many have concluded this “payroll tax” is an income tax… prohibited by the Washington State Constitution.

Unlike an insurance premium, the amount collected is unrelated to the benefit received. The “benefit” is fixed, but “premium” varies with income.

Even legislative leaders on both sides of the aisle realized that this program would be hugely unpopular, so they amended the law with a one-time “opt-out” provision, allowing an employee just one chance to opt-out before November 1 – provided an employee can attest having purchased state approved insurance. Once that date passes, workers will be locked into Washington’s long-term care program for the rest of their lives.

Right now, we’ve got many people scrambling to opt-out…which means they’re looking for insurance that they hope qualifies for a state exemption.  Insurance many don’t want or need.

I said “hope” because the criteria are not available and won’t be until the beginning of the opt-out period.

Please stop this law before hard-working individuals and families see their wages cut by the hand of the state…in a rushed way, and against the wishes of voters across the state.

Sincerely, 

Edmund O. Schweitzer, III PhD
President and Chief Technology Officer
Schweitzer Engineering Laboratories, Inc.