Since 1965, Medicaid has played an essential role in the health and well-being of families and individuals with low incomes, including children, parents, pregnant women, seniors, and people with disabilities.
The impact of this popular public insurance program was amplified under a key provision in the Affordable Care Act (ACA) of 2010 to allow states to expand coverage by raising the income level for eligibility. The ACA also allowed coverage for adults with low incomes who don't have dependent children. Washington state lawmakers approved the expansion of Medicaid in 2013, making us one of 28 states to do so. The result? Over half a million additional Washingtonians have now obtained health coverage.
Read more about Medicaid’s effectiveness in Washington state from our partners at the Center on Budget and Policy Priorities.
And take a look at our recent analysis of the well-being of kids in Washington state, and in particular how Medicaid programs are making our kids healthier (per the KIDS COUNT 2015 Data Book).
Here's to 50 successful years of Medicaid making people healthier!
A group of Washington state residents are suing to block Tim Eyman’s unconstitutional Initiative 1366 from the November ballot. I-1366 is Eyman’s attempt to undercut democracy and blackmail the people’s representatives into writing his disastrous “supermajority” law into the state constitution. The plaintiffs in the King County lawsuit include an elections official, a county auditor, lawmakers, and advocates for education and social services.
Amending the state constitution cannot be done through the initiative process, yet Eyman’s “2/3-For-Taxes Constitutional Amendment Initiative” seeks to do just that. That makes Eyman’s initiative illegal.
Simply put, Initiative 1366 would make one of two things happen. Either the Legislature would have to undercut democracy by passing a constitutional amendment requiring a two-thirds vote of the Legislature on revenue measures – instead of the simple majority required for almost all other legislative actions today – or the state would lose $1.4 billion a year in tax revenues that support schools, public health services, public safety, and other investments that help build a strong state economy.
Neither move is in the best interest of Washington’s future. A supermajority requirement on revenues would make it nearly impossible to eliminate wasteful corporate tax breaks, raise the resources needed to respond to emergencies, or invest in other building blocks of broad prosperity. The loss of $1.4 billion a year – through an automatic sales tax rate reduction that would be triggered under the initiative if the Legislature didn’t bow to Eyman’s supermajority demand – would severely hamper the state’s ability to meet the school-funding requirements of the McCleary ruling or invest in important building blocks of economic growth.
I-1366 would jeopardize Washington’s future in several ways:
- It would blackmail the people’s representatives into doing what Eyman wants under threat of losing billions of dollars crucial to building a strong economy and prosperous state.
- It would tie the hands of legislators and make it very difficult to respond to crises – like wildfires and floods – as well as to make the investments necessary to create jobs and strengthen our communities.
- It would allow a small handful of politicians to block every attempt at closing wasteful corporate tax breaks or increasing investments in public schools and other vital services that strengthen communities. This law would increase partisan gridlock and impede reasonable compromise.
- It would lock in place wasteful tax breaks, putting our state at risk of making cuts to important investments like financial aid for college students and services for seniors.
- It would make it impossible to create a more equitable tax system where everyone, including the rich, plays by the same rules.
- It would undercut democracy by saying the simple majority now required for most other legislative votes shouldn’t to apply to anything Eyman and his backers don’t want it to apply to.
Represented by the same law firm that successfully overturned Eyman’s previous supermajority initiatives, the plaintiffs in this lawsuit are: King County Elections director Sherril Huff; Thurston County Auditor Mary Hall; State Representative Reuven Carlyle, D-36th Legislative District; State Senator David Frockt, D-46th Legislative District; Eden Mack, Washington State Parent Teacher Student Association; Paul Bell, Bellevue College student; Tony Lee, Statewide Poverty Action Network Senior Fellow; Gerald Reilly, ElderCare Alliance chair.
Because of stagnating wages, underemployment, and high costs for basic needs like housing and child care, many of Washington state’s kids and families will continue to have a hard time making ends meet, according to the 2015 KIDS COUNT Data Book released today.
The report, released by the Annie E. Casey Foundation and KIDS COUNT in Washington, found that too many children and families are still not feeling the effects of the economic recovery and are facing issues like poverty, hunger, and homelessness. Washington ranks 19th overall among the 50 states in four areas of child well-being: education, health, family and community, and economic well-being. Policymakers need to make significant investments in our children if we are to make progress toward improving outcomes for our kids.
(Click on the image below to view the entire table)
KIDS COUNT in Washington found that our state fares especially poorly in economic security. A lack of quality employment for parents, combined with high cost-of-living, is a significant challenge for Washington state. What’s more, our national legacy of structural racism means that an increasing share of Washington state’s children are born and raised on an unequal and unstable footing. For example (click on above graphic for data summary):
- An additional 78,000 children are living in poverty since 2008. One in three Black (34 percent), American Indian/Alaska Native (32 percent) and Latino kids (32 percent), and one in four (25 percent) Pacific Islander/Native Hawaiian kids, live below the poverty line -- that's compared to the state average of 19 percent.
- Approximately one in three (31 percent) children have parents that lack secure employment.
- Approximately one in three (36 percent) of children live in households with a high housing-cost burden. Housing and child care are the two biggest expenses families with young children face, taking up between one-third to half of median monthly income depending a family's racial and ethnic background (see chart).
(Click on the image below to view the entire table)
What Would It Take to Be the No. 1 State for Kids?
The Data Book also contains good news. Washington state ranks among the top 10 best states for child health – a testament to the investments our state has made in the Washington Apple Health program, which has a goal to provide health insurance to all kids. There has also been a sizable decline in child death rates and the share of teens who are abusing drugs or alcohol, both of which can be attributed to the rise in public health campaigns and child-focused public policies.
The message from these successes is clear – when Washington state invests in kids, it makes a difference. In addition, there are several steps that policymakers, community leaders, and child advocates can take to make Washington the best state in the country for kids to live:
- Lead with equity. We cannot make progress as a state if we don’t achieve racial and socioeconomic equity. Investments to advance well-being for all children must start with the kids who need investing in the most.
- Investigate the story behind the data. Data, on its own, tells a limited story about the people it represents. Lawmakers should work with the people that the data represents to understand their stories, and develop community-informed policies that have a higher likelihood of success.
- Increase investment in policies that simultaneously support both parents and children. The Casey Foundation recommends policies that result in higher pay, paid sick leave, flexible scheduling, and expanded unemployment benefits that will result in higher family income, reduced parental stress, and an increased capacity for parents to invest in their kids. Detailed recommendations can be found in the 2014 report, Creating Opportunity for Families: A Two-Generation Approach.
Read the KIDS COUNT in Washington press release about the 2015 Data Book.
The 2015 Data Book is available at www.aecf.org. Additional information is available at the KIDS COUNT Data Center, which also contains the most recent national, state, and local data on hundreds of indicators of child well-being. The Data Center allows users to create rankings, maps, and graphs for use in publications and on websites, and to view real-time information on mobile devices.
KIDS COUNT in Washington is a joint effort of the Children's Alliance and the Washington State Budget & Policy Center, which are working together to pursue measurable improvements in kids’ lives in Washington state.
With too many hardworking people struggling to get by, state lawmakers must do more to support the investments needed for Washingtonians’ long-term economic security than they did in the recent state budget.
For an eye-opening look at the challenges our state faces, see the "Progress at a Glance" table below and, for more details, check out our full Progress Index .
(Click on the image below to view the entire table)
Ultimately, state budget writers this year missed significant opportunities to help build an economy where prosperity is widely shared. Their budget did not do enough to rectify the fact that today’s economy is providing gains to a relative handful of Washingtonians, as these statistics dramatically show:
- Nearly one quarter of all income in Washington state goes to the richest 1 percent – those with average annual incomes of $1.3 million. For perspective, the richest 1 percent held no more than 11 percent of all income during the height of middle-class prosperity from 1947 to 1979.
- Between 2009 and 2012, during the recovery from the Great Recession, all income gains went to the richest Washingtonians. The remaining 99 percent saw their income decline.
- Median household income declined by $4,000 between 2008 and 2013, to $58,405 a year from $62,486.
- The share of Washingtonians who make too little to meet basic needs is rising, now encompassing nearly one-third of the population.
In addition to all this, Washington continues to have the nation’s most upside-down state tax system: as a percentage of what they make in a year, the lowest-paid Washingtonians pay up to seven times more in state and local taxes than the wealthiest 1 percent.
The disturbing situation these statistics describe should serve as a clarion call to lawmakers that investments need to be made to create affordable housing, connect workers to job training, keep children from going hungry, and in other ways promote opportunity and prosperity for all. Yet Washington state invests just 3 percent of its total operating revenue on ways to help Washingtonians maintain economic stability during an economic downturn or personal crisis.
Further, inadequate state support over the past five years has weakened the forms of assistance many Washingtonians need most. Temporary Assistance for Needy Families and Working Connections Child Care – critical tools to help families find or keep a job – serve significantly fewer children today than in 2008.
The recently adopted state budget did increase support in some key areas, like expanding early learning opportunities for all kids and providing a small increase in cash assistance to families struggling to get by. But those gains are severely threatened by the failure to enact enough new, sustainable revenue sources to protect long-term investments and economic security in the years to come. The adoption of a capital gains tax on the wealthiest Washingtonians in particular would have provided several million dollars a year to meet important needs and take a step toward making taxes more equitable.
This is Part 6 in our "Progress in Focus" series of blog posts highlighting the individual sections of the Progress Index. To read our additional recommendations for how to support a thriving Washington economy, visit the Economic Security section of our Progress Index. See our previous posts:
Serial anti-tax initiative writer Tim Eyman is seeking to bring back to life a disastrous “supermajority” law – which, if passed, would make it nearly impossible to eliminate wasteful corporate tax breaks or to enact new taxes that invest in our schools and other important services.
Eyman’s Initiative 1366, which has likely garnered enough signatures to appear on the November 2015 ballot, attempts to coerce the Legislature into passing a constitutional amendment that would mandate a two-thirds vote of the Legislature for tax increases. The initiative states that unless the Legislature passes and places this supermajority constitutional amendment on the November 2016 ballot, it would automatically reduce the state sales tax to 5.5 percent from 6.5 percent. This reduction would cost the state’s K-12 schools, community colleges, universities, and public safety more than $1 billion per year.
If Eyman’s attempt succeeds, a law requiring a two-thirds supermajority vote of the Legislature or a vote of the people to raise any tax will be permanently carved into our state constitution. Under the law, corporate lobbyists would only need to persuade 17 state senators to block efforts to repeal wasteful tax corporate breaks or raise taxes on ultra-wealthy CEOs.
Placing so much power in the hands of a small minority of legislators is a recipe for bringing increased gridlock to Olympia. It would allow a small handful of legislators to stand in the way of any attempt to close tax breaks or raise taxes for any reason.
If the Legislature does not vote to amend the constitution as Eyman’s initiative demands, the resulting sales tax reduction would mean that many investments that help build a strong economy would immediately face sharp cuts or be eliminated altogether. These resources would be terminated at a time when lawmakers are under a court order to increase funding for schools by billions of dollars. I-1366 would make it nearly impossible to build a future in which our kids and grandkids have the opportunity to thrive.
Eyman’s previous supermajority law efforts were struck down by the State Supreme Court in 2012. With I-1366, he is now trying to strong-arm, under threat of deep cuts to communities, our elected officials into permanently writing a supermajority law into the state constitution.
As we’ve written previously, the supermajority law is a proven failure in Washington state. While it was in effect during much of the Great Recession, it hampered the state’s economic recovery by preventing lawmakers from raising resources needed to support investments in job training, child care, care for seniors, and other important programs when they were most needed.
The bottom line is that Eyman’s attempt to force the Legislature into passing a supermajority amendment, under threat of deep cuts to communities, is harmful and irresponsible. If his dangerous coercion attempt (funded by a small group of wealthy, elitist backers) succeeds, it will be impossible to close wasteful corporate tax breaks or raise other equitable sources of revenue to build a better education system for our kids. It could also trigger a massive reduction in sales tax revenues, forcing deep cuts to investments that support thriving communities for all Washingtonians.
After three special sessions and with one day to spare before a government shutdown, lawmakers finally approved a budget today. It increases funding for schools, early learning, worker pay and benefits, mental health services, support for struggling families, and other much-needed services. While it’s certainly laudable that the investments are robust, it’s nevertheless essential to note that lawmakers are relying on inadequate long-term revenue sources to sustain them. In so doing, they are missing a timely opportunity to make our tax system more sturdy and equitable.
Over the next two years, nearly $4.5 billion more will be injected into our economy, compared to the previous two budget years. The increased funding helps keep up with increases in our population and inflation, while also meeting the needs of vulnerable Washingtonians and making required investments in K-12 basic education, among other things. The resources to make these investments come largely from projected increases in revenue, a funding surplus from the previous budget cycle, fund transfers, and new revenue from closing or narrowing tax breaks.
- Increased mental health services: Approximately $100 million is added to increase mental health services and address deficiencies in access to treatment that have left many people confined to hospital emergency rooms while they await care.
- Progress on basic education: $1.3 billion moves us closer toward fully funding basic education, as required by our state constitution and the McCleary court case. This funding will reduce class sizes in K-3 and expand all-day kindergarten. An additional $740 million is included as part of maintenance-level expenses to cover the basic operating costs to run a school (Maintenance, Supplies, and Operating Costs).
- Support for workers: Nearly $800 million supports public workers by funding agreements for increased pay and benefits and by providing teachers a cost-of-living increase (called for by Initiative 732) and an additional increase to reach parity with state workers.
- Improvements in early learning: $158 million funds big advancements in the quality and availability of early learning education for children. This includes funding the Early Start Act, maintaining current preschool slots and adding 1,600 more, and allowing families receiving Working Connections Child Care to be eligible for child care 12 months at a time – thereby avoiding disruptions to care if they face job or income changes.
- Increased college access: $113 million is provided to help lower tuition costs at all public colleges and universities by five percent in the 2015-16 school year. In addition, as of the 2016-17 school year, state universities (University of Washington and Washington State University) must lower tuition an additional 10 percent, and regional universities (Western, Central, and Eastern Washington Universities), Evergreen State College, and applied baccalaureate degree programs at community colleges must lower tuition by an additional 15 percent.
- Support for struggling families: $9.6 million is provided to restore a previous cut to food assistance, and $30 million partially restores a cut to cash assistance for families receiving Temporary Assistance for Needy Families.
- Re-prioritized tax break spending: Lawmakers close or narrow four unproductive tax breaks, allowing $162 million in revenue to be spent on more important priorities.
Amid the emphasis on tuition decreases, an important story is being overlooked: The fact that lawmakers neglected to address the backlog of students who qualify for the State Need Grant but can't access it due to a lack of funding. This puts higher education out of reach for many students with low incomes who can only afford college with the help of financial aid. In addition, although it’s great that there is a partial restoration of cash assistance to parents receiving Temporary Assistance for Needy Families, lawmakers also cut $50 million from the program. This will make it harder for many families to get the support they need to get back on their feet and into stable employment during times of hardship.
Ultimately, the folly in the final budget agreement is that it doesn’t focus on the long term. It fails to enact enough new, sustainable revenue to protect its investments – thereby protecting our state’s economic security – in the years to come. In education, where the bulk of new investments are made, new spending vastly outweighs new revenue. In fact, only $1 of new revenue is raised for every $17 dollars spent on education (see graph).
While $162 million in new revenue is added through the closure of four wasteful tax breaks, an additional ten breaks were created or extended, costing $36 million.
Lawmakers missed a major opportunity to fix our broken revenue system and level the playing field for those with lower incomes who currently pay the most in state taxes. The Governor and House budget-writers proposed a capital gains tax that would have generated significant resources to protect the future stability of our investments. It would have impacted only the wealthiest Washingtonians – fewer than 35,000 – while taking a big step toward making our revenue system more equitable.
Instead, lawmakers decided to gamble on short-term fixes and to bank on the notion that the economy will continue to boom. This is the antithesis of wise, responsible investment, and it is setting us up to be woefully ill-prepared to weather any dips in the economy.
Again, while it is good news that the budget increases its investments, the reality is that those investments can’t actually come to fruition without a reliable, sustained source of revenue to pay for them. In 2017, it is likely that lawmakers will again be faced with the same issue that they faced this time. They won’t have enough revenue to fund the important programs that benefit all Washingtonians – from education to public safety to health services. The budget should be a tool that can secure the economic strength and progress of our state and its residents for generations to come. Right now, the budget is mainly a utilitarian tool to get us through the next two years. And even then, it’s shaky.
The Senate released a set of new proposals today that increase investments and add new revenue, but that still fail to provide the resources needed to sustain investments in the long run.
The three proposals introduced include a new budget proposal for the next two years, a plan to raise additional revenue by closing some tax breaks, and a contingency plan to avoid a shutdown by funding state services for the month of July. The Senate also advanced a bill that would create or extend 14 tax breaks worth $114 million in the coming budget cycle.
The Senate’s new version of a budget increases investments by $367 million above its previous proposal. Added investments include:
- An additional cost-of-living increase for teachers to align with the increase received by state employees;
- A nine percent increase in cash assistance that help parents on Temporary Assistance for Needy Families care for their families while looking for work;
- 12 months of continuous eligibility for Working Connections Child Care so families can maintain stability amid job and income fluctuations;
- Restoration of funding for food assistance that was previously cut.
These additional investments bring the Senate budget more in sync with the needs of Washingtonians and the priorities in the House budget. However, their plan to sustain investments over the long haul is a flop.
The Senate budget prioritizes education, investing over $2 billion in new funding to pay for K-12 basic education enhancements prescribed under the McCleary ruling, early learning improvements, and tuition cuts for middle-income students. Yet, new resources to continue these investments net out to a paltry $40 million (see graph).
The revenue proposals include:
Tax break reductions (Senate Bill 6138):
- Eliminating a sales tax break for large software manufacturers ($57.2 million): Software companies are currently able to claim a sales tax exemption on machinery and equipment they purchase for manufacturing software. The Senate proposal would eliminate this exemption for software companies with more than 40,000 employees that have been in Washington state since before 1981.
- Eliminating a preferential Business & Occupation (B&O) tax rate on royalty income ($31.4 million): Businesses that earn much of their revenue from royalties, including Microsoft and other corporations that receive royalties from licensing software, currently enjoy a preferential rate of 0.484 percent. SB 6138 would eliminate this preference and collect taxes on royalties at the standard 1.5 percent B&O rate for service-industry activities.
- Eliminating a B&O tax break for out-of-state wholesalers: Large, multistate wholesalers that do not have a physical presence in Washington are not required to pay B&O taxes, despite the fact that they do millions of dollars in business here. Yet wholesale businesses located in Washington do have to pay the B&O tax. Senate Bill 6138 would make progress on correcting this disparity by applying “economic nexus” standards, which are described more fully here, to wholesalers located outside of Washington state.
- Other revenue increases ($33 million): The Senate would also raise additional resources through various administrative actions such as spending revenues from unclaimed lottery prizes (SB 5681).
New or extended tax breaks (Senate Bill 6057 and others):
- Reinstating wasteful sales and B&O tax breaks for high-tech research and development ($73.5 million): Last year, policymakers wisely allowed a costly B&O credit and a sales tax exemption for high-tech firms to expire. An analysis by the Joint Legislative Audit and Review Committee (JLARC) found these tax breaks failed to create jobs. Senate Bill 6057 would bring these tax breaks back to life.
- Extending a B&O tax break for businesses that package and process food ($13.2 million): These businesses are currently exempt from paying the B&O tax. That complete exemption is scheduled to expire on June 30, 2015. SB 6057 would extend the exemption to 2025.
- Reinstating a sales tax break for data centers ($12.5 million): Last year, policymakers wisely did not extend a sales tax exemption for equipment used in data centers, or “server farms,” past the current expiration date of July 1, 2015. SB 6057 would extend the expiration date on equipment to 2025.
- Enact or extend other tax breaks ($13 million): SB 6057 and other legislation would create or extend a number of smaller tax breaks, ranging from a public utility tax break for logging trucks to B&O tax breaks for aluminum smelters.
Without additional, reliable revenue, these investments are perilous and susceptible to collapse in the event our economy experiences any hiccups in the short term. In the long term, our inadequate revenue system will struggle to maintain investments – for our education system and the needs of Washingtonians and our economy.