The Senate’s latest budget plan cashes in on the most recent uptick in forecasted revenues, investing $242 million more to give workers a raise, maintain parks, and reverse proposed cuts to mental health services and health care for retirees. While these incremental steps move us closer toward becoming the kind of thriving state we want to live in, the Senate’s continued refusal to raise new revenue still misses the long view. It jeopardizes our ability to sustain these investments over time.
With looming deadlines to finalize a budget that directs state investments over the next two years, it’s easy for lawmakers to lose sight of the big picture. Budget deliberations become centered on meeting court orders, complying with state and federal obligations, and adhering to basic budgeting principles – like making sure the budget balances.
This short-sighted mindset overlooks the bigger questions decision-makers should be focused on: Are children entering kindergarten with the skills they need to succeed throughout school? Is economic growth strong and shared with workers? Is Washington state’s tax system equitable, dependable, and stable?
When we look at the answers to these questions, the results leave a lot of room for improvement. According to our recent Progress Index, the state of the state is not the picture we want to see. On nearly half of 100 indicators of progress, we are stalled or going backwards. Consider the following:
- Only forty-one percent of 3- and 4-year-olds (four of every 10) are enrolled in preschool.
- Income inequality remains historically high in Washington state, with nearly one quarter (23 percent) of all income being held by the richest 1 percent.
- The share of people with low incomes who do not have enough income to meet basic needs has increased, now encompassing nearly one-third of all Washingtonians (31 percent).
- Washington state’s tax system has been falling behind the changing economy for decades. Between 2000 and 2014, tax revenues as a share of state personal income declined by 20 percent (see graph).
Our budget must look to the future and take steps to ensure that we are reversing these negative trends. In order for Washington to move forward as a state, it must make robust investments in our kids, the environment, students, workers, and our most vulnerable Washingtonians. Doing so would benefit all Washingtonians. But making these investments and sustaining them for years to come is not possible without new revenue. Cobbling together a patchwork of one-time fund transfers and short-term resources, as the Senate budget does, is not responsible and will not move us toward the future we all want to live in.
While it’s certainly good news that we have more revenue than expected, scraping by with just enough over two years is missing the point that our state budget is supposed to be a tool to promote long-term economic development that benefits everyone. A forward-thinking solution is to enact a modest capital gains tax and close wasteful tax breaks, as the House proposes.
The $327 million bump in state tax collections forecasted by the Economic and Revenue Forecast Council (ERFC) this afternoon is not a win for lawmakers opposed to implementing the common-sense capital gains tax on the Washington state's richest households. New funding for schools must reach roughly $4.5 billion by 2019 in order to satisfy the state Supreme Court’s mandate. Relying on short-term solutions – including temporary revenue growth and one-time budget gimmicks – to fund this long-term requirement is a recipe for disaster. Yet that’s what the anti-tax members of the State Senate propose to do.
The $327 million in additional state tax resources projected by ERFC would not even offset half of the $723 million in unsustainable budget tricks included in the Senate budget proposal. Those gimmicks include diverting money dedicated to public infrastructure projects and banking on unrealistic savings from efficiencies. And they simply aren’t sustainable.
In addition to providing long-term funding for schools in Washington state, significantly more resources are needed to give workers a raise, reverse cuts in important services such as food assistance, and improve the quality of early learning.
With the revenue forecast now behind them, leaders in the state Senate now have the opportunity to turn their attention toward fixing Washington state’s upside-down tax system and sustainably funding education and other important priorities in the coming years. Taxing capital gains and closing wasteful tax breaks, as proposed by leaders in the State House of Representatives, would be a good step in the right direction.
This is Part 4 in our "Progress in Focus" series of blog posts highlighting the individual sections of The Progress Index. This post is focused on the environmental part of the Healthy People and Environment section.
by Lori Pfingst, Research and Policy Director, and Kim Justice, Senior Budget Analyst
Investments in clean air, water, and land are essential to Washingtonians’ health and quality of life, as well as to the state’s economic vitality. Over the last decade, Washington state has increasingly recognized the need to protect our people and the environment from the threats posed by pollution, toxins, and hazardous waste.
As our recently released Progress Index shows, we have made progress on important environmental priorities – such as the quality of our drinking water and the reduction in hazardous waste from manufacturers. But much work remains. On 14 out of 17 measures of environmental health, progress has stalled, gone backwards, or not advanced fast enough to mitigate worsening conditions (see "At a Glance" table for a summary; and see the full Progress Index to review all the data we use to measure progress).
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This year, Washington state lawmakers have an opportunity to reverse the downward trend in environmental health by making key investments in our state parks, protecting fish and wildlife, and ensuring our air, water, and land are clean and safe. While the House invests more overall, neither their budget proposal nor the Senate’s would provide sufficient funding for protecting the environment. In fact, both budgets cut investments that ensure our environment is healthy. (The House would cut $1.9 million, and the Senate would cut $11.9 million). In addition, both budget proposals fail to factor in potential revenues from a new carbon pricing program that would significantly reduce pollution and its impact on the health and quality of life of Washingtonians.
But as of this past week, that could change.
Lawmakers held a hearing to discuss House Bill 1314, which would put a price on carbon emissions and invest in the communities hardest hit by pollution. Carbon emissions from automobiles, industry, and other sources are linked to rapid climate change, which poses a significant threat to Washington state’s economy, public health, and quality of life. Projections show that without policy changes like those that House Bill 1314 sets forth, our state will not be able to meet the emissions reductions standards it is legally required to meet by 2020. The landmark legislation would make our air and water cleaner, while raising some $1.3 billion in new revenue.
That revenue would be invested in communities hardest hit by pollution in multiple ways. For starters, it would help fund the Working Families Tax Rebate, a rebate program for hardworking Washingtonians with children. In addition, it would help fund research to identify which communities are hardest hit by pollution and set aside resources to help those communities transition to a low-carbon future. Thus, the bill would help our environment while investing in our people.
The natural beauty and biodiversity of the Pacific Northwest are some of our biggest strengths. Keeping our state’s environment healthy goes hand-in-hand with keeping our people and economy healthy. Adopting legislation that reduces pollution while also directing revenue toward hardworking Washingtonians is simply smart legislation that would be good for our state.
To read our additional recommendations for how to protect our environment, visit the healthy people & environment section of our Progress Index. Stay tuned for "Progress in Focus" blog posts on the other sections of our Progress Index.
Eritrea Habtemarium just completed her (highly successful) Narver fellowship with the Budget & Policy Center. She will receive her M.A. in policy studies this June from University of Washington Bothell – with a capstone project focused on immigrant perceptions of crime and policing in Seattle. We checked in with her to hear more about her time with us and what her hopes are for the future.
What made you decide to apply for the Narver fellowship with us?
I decided to apply for the Narver fellowship because it was a fantastic opportunity to learn about policy in Washington state from an advocacy-oriented policy research center. Up until this point, most of my policy-related work experience and educational background focused on national and international issues. The fellowship presented an opportunity to learn about Washington state policies and politics from a variety of perspectives. It also offered me a great chance to gain hands-on experience and develop critical skills in research and analysis.
What are some highlights of what you’ve learned?
I learned so many things about the dynamic policy arena in Washington state and about policy work in general. One of the most significant things I learned is how important messaging is, especially when dealing with contentious and sensitive issues. For instance, while I was working on my blog series on immigrants, I learned that it is not enough to have sound research. In order to get that research across, you must understand the perspective of those who will read and use your work. And you must message the piece in a way that will reach those audiences and resonate with them.
Also, I learned how involved it is to move policy in our state. I now have a better understanding of the importance of coalition-building and strategizing.
What were some of your favorite experiences during your fellowship?
I was fortunate enough to have several incredible experiences during my fellowship. My field placement with OneAmerica was fantastic. It offered me an opportunity to get another organizational perspective on legislative engagement. As a result, I saw how organizations with different focus areas take varied approaches to reach shared goals. The staff at OneAmerica was so welcoming and I was able to learn about a variety of issues on the local, state, national, and international level that impact immigrants.
I also got to shadow Senator Pramila Jayapal in Olympia. This experience gave me great insight into the tremendous work our legislators undertake to serve our state. Senator Jayapal is incredibly inspirational. My shadowing experience provided me with great perspective and encouragement that I will carry with me as I continue my work.
Above all, direct mentorship from (former Executive Director and now Senior Adviser of the Budget & Policy Center) Remy Trupin was my favorite experience. Learning from his insight on policy, politics, and advocacy in the state laid a great foundation for my fellowship. He helped me understand the dynamic policy environment in Washington state and the processes beyond research that help move great policies from ideas to law. I will forever be grateful for his honesty and encouragement throughout this experience.
Did anything surprise you from your time with us?
I was surprised by how vibrant the policy arena is in Washington state. It was interesting to see how progressive we are in some aspects and to see how far we have to go in others. I was also surprised by how fast-paced a legislative session is and how demanding it can be on all involved in the process. Despite having a tremendous workload, the Budget & Policy Center staff was involved in numerous important policy decisions debated in the state Legislature this session. I was impressed by their ability to manage it all and by their deep passion for the topics and policies they were involved in forming. It was truly motivating working with and witnessing the staff’s dedication and commitment to the work.
What do you hope to do in your career?
In my career, I hope to be involved in policy work centered on immigrant and refugee populations that combines research and advocacy. This fellowship helped me understand the importance of research and data, and has ultimately solidified my desire to use research to advocate for social and economic justice.
All of us at the Budget & Policy Center wish Eritrea the best of luck in the future!
Cuts to funding for public colleges and universities since the recession have led to huge jumps in tuition nationwide. Washington state, unfortunately, ranks third in the nation for the largest average tuition increase, according to a new report from the Center on Budget and Policy Priorities. Average tuition has ballooned by nearly 60 percent – or about $4,000 since 2008, adjusted for inflation.
College affordability is essential for our state to develop a skilled workforce for Washington’s businesses. To get the price of college back within reach for more Washingtonians, significant investments need to be made in the yet-to-be approved budget.
Washington state has begun to take small steps to restore funding to its universities and colleges (0.3 percent over the last school year), but funding nevertheless remains 28.4 percent below pre-recession levels. As a result, the majority of the cost of college has shifted from states to students and, in many cases, their families (see figure below).
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Meanwhile, family incomes have stagnated or fallen. Rising tuition combined with falling incomes make it less likely that students will attend college or complete a degree. While the rise in tuition has impacted all Washingtonians, it has been particularly burdensome for students of color, who are disproportionately lower income. Currently, tuition at a public, four-year university in Washington can be as much as 26 percent of household income for Black, American Indian/Alaska Native, and Latino students (see figure below).
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The choices our legislators make in the state budget will determine whether or not college remains within reach for Washington’s students. The House and Senate both propose investing more into higher education, but they have different approaches for how to use the resources. The House would use state investments to hold the tide on further increases in tuition over the next two years while also expanding student financial aid through the State Need Grant (SNG).
The Senate proposes to decrease college costs by pegging tuition to a percent of the state’s average wage. For example, the average wage for fiscal year 2016 is projected to be $52,635. For the University of Washington, tuition for resident undergraduate students in that academic year would be set at $7,369, or 14 percent of the average wage (1). However, there’s a huge flaw in how the Senate would pay for the tuition decreases – it would do this, in part, by cutting financial aid. This proposal would benefit middle- to higher-income families, as it would trim costs at the most expensive schools. But it would make it harder for many students who rely on financial aid.
Despite the contrasting proposals, it’s certainly a good thing that legislators are debating the best ways to make college more affordable. It’s the right conversation to be having. But when addressing cost, lawmakers must make sure that college is accessible for students with a range of income levels, especially for those with lower incomes who face the biggest hurdles. As such, freezes or reductions in tuition need to be paired with investments in the State Need Grant, our primary tool to open the door to college for students with lower incomes. Currently, about one third of students who qualify for the SNG (over 30,000 people) are unable to receive aid because of a lack of funding. Expanding the SNG, as the House proposes, is the right thing to do for thousands of aspiring students.
State investments in higher education are needed to build a strong middle class and an economy that is fueled by skilled workers. But the resources to make these investments don’t exist under our current revenue system. Raising new revenue through a capital gains tax and closure of unproductive tax breaks, as the House proposes, need to be part of the final budget.
To read the full Center on Budget and Policy Priorities report and see how our state compares to other states with better revenue systems, click here.
1. Senate Bill 5954 fiscal note
As Washington state’s population becomes more diverse, our lawmakers must invest in the needs of an increasingly multiracial and multiethnic population and ensure that there is equity for all Washingtonians. Too many people of color in Washington don’t have the opportunities they need to advance alongside their peers.
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Our state budget must address persistent race and class divides so that all Washingtonians can contribute their talents toward a thriving 21st century economy. Equity and inclusion aren’t just simply the right thing to do – they are imperative to our economic success (see sidebar for definition of equity versus equality).
So as lawmakers negotiate the budget, they should make investments to advance racial equity. This is paramount to helping ensure that hardworking Washington families can get ahead, kids can receive a top-notch education, and we can help create a healthy future for our residents and our environment.
The Facing Race report recently offered key budget recommendations that would invest in opportunity for communities of color. Using the report as a framework, it's clear that the House budget proposal takes some initial steps to help advance equity. The Senate budget proposal, on the other hand, doesn’t do enough.
Washington should have a world-class education system that promotes opportunity and helps ensure a strong 21st century economy. However, we cannot achieve this as a state when so many of our kids face such significant barriers to opportunity. The opportunity gap in education – the gap that results from social and institutional obstacles that make it more difficult for some students to succeed – is especially prominent for kids of color and can start as early as nine months. It continues from early learning all the way through higher education.
Policymakers should work to close this gap so that all Washingtonians have the chance to thrive. This means making sure kids get quality early learning opportunities that set them up for success. It also means making targeted investments in K-12 education and making higher education more affordable.
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Our state does best when we have a strong and inclusive middle class that allows all Washingtonians to contribute their talents and creativity and be rewarded fairly for their hard work. However, growing income inequality in our state is undermining our progress. This is feeding into race and class divides that continue to limit the ability of all residents to climb into the middle class and share in our state’s prosperity.
More and more families in our state, especially families of color, are finding it difficult to put food on the table or a roof over their head. Legislators must take steps to improve economic security for all Washingtonians by restoring investments in programs that give a lifeline to people struggling to make ends meet.
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Healthy People & Environment
Affordable health care is essential to ensure a high quality of life. We also know the environment is playing an increasingly important role in the health and well-being of our communities. However, for too many Washingtonians, including people of color, access to care and a healthy environment are not easy to come by.
While great strides have been made to improve access to affordable health care in recent years, legislators have more work to do to ensure that all communities in Washington state can get the care they need.
Further, communities of color are often the first and worst hit by the effects of pollution. Lawmakers should adopt policies that enable Washingtonians to live in a healthy environment that promotes good health.
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In order for our state to thrive, we need a revenue system that asks everyone to pay their fair share, that is stable, and that provides enough resources to make the investments we need to build a better future. However, our revenue system currently relies disproportionately on residents with lower incomes. Because communities of color are more likely to be among the poorest fifth of Washingtonians, this also means they are more likely to pay the highest portion of their income in state and local taxes – 17 percent. Meanwhile, the wealthiest fifth of Washingtonians pay only 2 percent of their income in state and local taxes. What’s more, people with low incomes, including many people of color, are more likely to feel the pain of budget cuts that are a result of that broken system.
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We know that people of color in Washington state are challenged by a system that limits their access to equal opportunities, but this doesn’t have to be the story. There is still time during special session for lawmakers to make 2015 a year of great progress toward this goal, and they should seize it. Taking these steps today would lead to a better Washington tomorrow. It would allow us to become a place where everyone has an equal chance to succeed.
To learn more about how communities of color are faring in Washington state, see the full Facing Race report – which was released by a coalition of over 50 organizations. It includes a range of additional policy recommendations for how state lawmakers can advance racial equity. For additional such recommendations, read our other recent reports: The Progress Index and Creating an Equitable Future: Black Well-Being 2015 & Beyond.
The Budget & Policy Center staff would like to thank Emijah Smith, Community Organizer with Children's Alliance, and Sharonne Navas, Executive Director of the Equity in Education Coalition, for their assistance with this post.
This is Part 3 in our "Progress in Focus" series of blog posts highlighting the individual sections of the Progress Index. This post is focused on Good Jobs.
by Lori Pfingst, Research and Policy Director, and Kim Justice, Senior Budget Analyst
The cornerstone of a strong middle class is an abundance of well-paying jobs that allow workers to meet their basic needs and to get ahead. Lawmakers have opportunities to strengthen the middle class in Washington state right now. They can do this by increasing their investment in workers and their families. But this is dependent on whether lawmakers have the foresight to raise new revenue.
According to our Progress Index, Washington state has a lot going for it when it comes to jobs. Our state is nationally recognized for having one of the highest shares of science, technology, engineering, and math (STEM) jobs (15 percent). With high median incomes, STEM jobs ($77,698) and STEM-related jobs ($68,984) are critical to the overall health of Washington state's middle class.
But while the share of STEM jobs is relatively high compared to other states, the vast majority (85 percent) of jobs in Washington state pay far lower median wages ($45,574). In fact, the largest non-STEM job categories are retail sales, cashiers, and food service. And they all have median annual incomes below $25,000 – well below what it takes to meet basic needs in most places in the state.
The trend toward lower-wage work has been happening for some time. Indeed, wages for low- and middle-income workers have been stagnant for nearly four decades (see "At a Glance" table for a summary; and see the full Progress Index to review all the data we use to measure progress). Meanwhile, on the other side of the recession, all the income gains have gone to the richest 1 percent. In addition, investments in the kinds of things that workers need to do their jobs well – child care for their kids, after-school programs, a reliable bus system – have steadily declined or grown stagnant as well. This limits the potential of our state to create good jobs and produce a competitive 21st century workforce.
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Proposed Budget Investments
As they negotiate their budgets in Olympia, lawmakers can make a range of investments that would improve the economic security of workers and strengthen the potential of our workforce over time. Education – from early learning through higher education – has dominated the budget negotiations thus far. Lawmakers are keenly aware that these investments play a critical role in workforce development and the creation of good jobs, especially those in high-wage, high-skilled STEM occupations. But investing in education alone is not enough.
Good jobs and productive workers would benefit from a range of policies currently under consideration. Lawmakers should raise additional revenue to fund not only education, but also all of the other investments Washington state's workers and economy need to thrive. Just a few of the policies that would lead to a healthier workforce in our state include:
- Approving collective bargaining agreements with workers who provide essential public services: Our public servants play a key role in our state. They protect children from abuse and neglect, care for seniors and people with disabilities, and provide services to college students, among many other things. They should be adequately compensated for the important work they do for Washingtonians. Last summer, workers who collectively bargain with the state reached an agreement with the Governor that would result in their first raise since 2008. The House budget funds this wage increase – 3 percent in 2015 and 1.8 percent in 2016 with an additional 0.8 percent or $20 per month, depending on the employee’s salary. The Senate, however, undermines the collective bargaining process, attempting to impose watered-down wage increases of a flat $1,000 increase in each year of the biennium – which is far below the rate of inflation. The Senate also proposes to strip home-care workers of the retirement benefit they negotiated, and it would cut health benefits to retired state employees who receive Medicare.
- Retaining and attracting the best teachers for students. Although voters approved Initiative 732 in 2000 to provide Cost-of-Living-Adjustments (COLAs) to teachers, those increases have been suspended by the Legislature in eight out of the past 14 years. For the first time since 2008, COLAs would be provided under both budget proposals – an increase of 1.8 percent in the 2015-16 school year and 1.3 percent in the 2016-17 school year. Reinstating and increasing the COLA is important to attract and retain high-quality teachers for our kids. It also addresses the overall funding deficiencies in our K-12 public schools and helps meets the requirements under McCleary. The House budget invests an extra $150 million for an added boost to align the teacher COLA with the wage increase received by state employees. It also invests $200 million to align teachers' benefits with that of state employees.
- Keeping families secure while parents find work. The Temporary Assistance for Needy Families (TANF) program helps parents who are seeking employment find work while also ensuring that they can provide the basics for their families. Stabilizing families during times of transition produces better outcomes for children and our economy. Yet funding for the program has eroded in the last few years, despite increased financial hardship during the recession. The House budget begins to restore some help to families by increasing funding for TANF by $18 million, including investments to provide housing for homeless families on TANF. The Senate's budget would further erode TANF by stripping $40 million from services, like housing assistance and utility supports (see table).
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It takes investments to prepare a competitive workforce, create good jobs, and help workers get ahead. Additional resources are necessary. That's why it's vital that lawmakers adopt new source of revenue through a capital gains tax and by closing tax breaks, as the House budget proposes. Without such investments, we are likely to continue to see an increasing trend toward low-wage work. Which brings with it an increase in the number of people falling behind and struggling to make ends meet – or worse, falling into poverty. As the richest Washingtonians continue to be the only ones benefiting from income gains, this disparity is simply unconscionable.
To read our additional recommendations for how to improve our state’s jobs market, visit the Good Jobs section of our Progress Index. Stay tuned for "Progress in Focus" blog posts on the other sections of our Progress Index.