Statement from the Washington State Budget & Policy Center
The revised state spending plans put forward by leaders in the Washington State Senate and House of Representatives rightly direct recent increases in state tax collections and one-time federal stimulus funds toward efforts to shore up community foundations – like health care, early learning, the environment, and infrastructure – and bolster emergency reserve funds. Yet too many funding needs requested by community leaders would remain unmet under both proposals. In the coming days, lawmakers should work to incorporate these requests into the final budget and enact equitable new sources of revenue to sustain communities far into the future.
It is commendable that legislative leaders chose to include heightened funding for the implementation of the Working Families Tax Credit, affordable housing, childcare, supports for people living with disabilities, and many other community priorities. This funding will go a long way toward ensuring no one is left behind as the state recovers from the pandemic and recession.
The proposal from House leaders wisely funds several important priorities that were omitted from Senate leaders’ proposal, such as cost of living adjustments for teachers, hazard pay increases for nursing home care workers, allowing an additional 92,000 kids to access free school meals, studying and gathering data on wealth inequities in Washington state, and other important community needs.
The budget proposals from House and Senate leaders would be even stronger if there was greater transparency and more time for community input. This is another example of how the structure of the legislature and constraints of a short legislative session can lead to less effective and equitable policy. As they work to refine the proposals in coming days lawmakers should heed calls from community leaders and add funding for other unmet priorities, such as guaranteed basic income pilot programs, home weatherization, and many more.
Funding these community needs would be a much more effective use of public resources than pouring billions of dollars into arresting and incarcerating people. The proposed budgets from House and Senate leaders include $2.3 billion and $2.4 billion, respectively, for the Department of Corrections. More of these funds should be used to bolster programs that are shown to keep communities safe, such as affordable housing, access to cash, behavioral health services, substance use treatment, and other social and health services.
House and Senate leaders largely reject irresponsible calls from anti-tax organizations and some lawmakers to enact wasteful tax cuts that would unnecessarily benefit the wealthy. Doing so would harm Washington’s recovery by permanently siphoning resources away from communities, especially as thousands of Washingtonians struggle to afford childcare, adequate housing, nutritious food, and other necessities.
Unfortunately, the House proposal would waste nearly $200 million on a three-day sales tax cut. Experience in other states shows that such “sales tax holidays” simply lead to large windfalls for retailers and the wealthy while draining resources for schools and other priorities.
The final budget should include the heightened funding for communities proposed by House budget writers. And, consistent with the proposal from Senate leaders, it should reject the sales tax holiday.
To replace the federal COVID recovery funds that are set to expire in 2024, lawmakers should approve permanent, equitable sources of revenue, such as a new tax on billionaires’ financial wealth. Even with higher projected tax collections in the coming years, state tax resources remain at near historic lows. And while the recently-enacted wealth tax on capital gains will bring greater equity to Washington’s notoriously upside-down tax code, the richest residents will continue to get a very special tax deal – one that comes at the expense of everyone else.
