The Senate and House recently moved forward their 2023-2025 operating budget proposals, which, when finalized, will determine how much funding state agencies and services will receive for the next two years. Both the Senate and House proposed a budget that would increase funding by over $5 billion compared to the last biennial budget of $64.1 billion. The bulk of the changes come from increased funding for critical state services like public schools, long-term care, and early learning. However, of the roughly $70 billion in state dollars appropriated in each of the budgets, less than $2 billion – not even 3% of total state funds – will go toward promoting economic security through cash assistance to Washingtonians[1].
The House budget includes much more of the important funding needed for cash assistance that community advocates have been calling for. As lawmakers move into final budget negotiations, we urge lawmakers to maintain the House’s proposed funding for the Temporary Assistance for Needy Families (TANF) program; Aged, Blind, or Disabled (ABD) Cash Assistance Program; Working Families Tax Credit (WFTC); and a guaranteed basic income program in Tacoma.
What’s in the proposed budgets for cash assistance
Cash assistance programs are crucial to Washingtonians’ well-being because they allow people with very low incomes to pay for basic expenses like rent, food, clothes, and school supplies. Growing evidence shows that cash assistance programs help improve people’s economic security, health and education outcomes, and employment and housing stability. In addition, cash assistance programs have an outsized benefit for Black, Indigenous, and People of Color (BIPOC) who face higher rates of poverty due to centuries of racist economic policies designed to funnel most of the wealth to white people while excluding BIPOC from economic and social opportunity.
Overall, the House budget has $120 million more funding for economic security compared to the Senate’s budget.
The House budget includes $40.6 million in funding for an 8% increase to many cash assistance programs including TANF, ABD, Refugee Cash Assistance (RCA), Pregnant Women Assistance (PWA), and the Consolidated Emergency Assistance Program (CEAP). This means that many households who face the greatest barriers to financial stability can have more resources to find their footing.
Temporary Assistance for Needy Families
The House budget would spend $68.6 million in state and federal funds to make important changes to TANF, including: raising the resource limits, implementing a six-month earned income disregard[2], temporarily waiving the 60-month time limit for TANF families with an eligible adult until June 2025, and eliminating the 60-month time limit for TANF families without an eligible adult, also known as child-only cases. Additionally, the House proposes a diaper benefit of $80 per month for TANF families with young children to alleviate the rising cost of this essential item. These changes will help families to build up savings and access help when they need it. They will also help increase racial equity by removing barriers to access that disproportionately harm Black, Indigenous, and Latinx families.
The Senate budget includes a diaper benefit of $100 per month for TANF families, but only funds a temporary time-limit exemption for child-only cases that ends June 2025. Troublingly, it also reduces state funding for TANF by $22.5 million. This means that thousands of families, particularly families of color, would lose a critical lifeline and face greater barriers to making ends meet, exacerbating racial inequities from a program with roots in racism.
The House budget also includes $11.2 million for a full child support pass-through, which would allow TANF participants to keep 100% of child support payments. The Senate budget fails to propose funding for this important policy. Currently, the state withholds a portion of child support payments from parents receiving TANF. Parents with one child can only receive $50 of their child support and parents with two or more children can receive $100 of their child support. A full child support pass-through incentivizes people to make their child support payments and increases the resources that children have to support their growth and development.
Working Families Tax Credit
The House budget includes $7.2 million for important changes to the WFTC, namely including people whose tax status is Married Filing Separately and extending the time to apply for the credit for all eligible households from one year to three years. The Senate budget does not include funding for this policy. Including the Married Filing Separately (MFS) status would greatly benefit survivors of domestic violence, who commonly rely on the MFS status to avoid further financial abuse. In addition, extending the application period to three years will align our state’s process with the Internal Revenue Service’s and, more importantly, give people sufficient time to apply for the credit they are entitled to.
Guaranteed Basic Income
The House budget also includes $1.9 million to continue the successful guaranteed basic income (GBI) program, Growing Resilience in Tacoma (GRIT), which was previously paid for through private funds. The 110 families that participated in GRIT received $500 a month for 13 months and spent over 80% of the money to pay for retail items, food, housing, and utilities. In short, GBI is good for families and local economies. Of note, GBI differs from current public assistance programs by providing greater freedom and dignity to participants through unconditional, unrestricted cash payments.
Aged, Blind, or Disabled Cash Assistance Program
Finally, the House budget also allocates $39.5 million to remove the requirement for ABD participants to repay a portion of their ABD payments when they also receive Supplemental Security Income (SSI). This will increase financial and housing stability for older and disabled people with the lowest incomes.
What we hope to see in the final budget
Several important cash assistance programs were missing from both budgets that we hope lawmakers will include as they finalize the state budget this session. These programs would help increase financial security, reduce intergenerational poverty, and have an outsized benefit for Black, Indigenous, and People of Color who have faced historical and persistent racist economic policies that create barriers to economic security. In addition to incorporating the House’s cash assistance proposals into the final budget, lawmakers should ensure the following policies are also included in the final budget:
- The age expansion to the Working Families Tax Credit, which would expand eligibility for this new tax credit to anyone age 18 or older. This change would provide much-needed cash to young workers and working seniors.
- The Evergreen Basic Income Pilot Program, which would provide monthly cash payments equal to the cost of rent to qualifying participants throughout the state for two years. While the House budget proposal includes funding for a local guaranteed basic income pilot in Tacoma, we urge legislators to fund a statewide pilot so that Washingtonians across the state can benefit from monthly cash payments with no strings attached.
- The Washington Future Fund, which would deposit $4,000 into an investment account for every baby that receives care under Medicaid before their first birthday. The child can withdraw the funds between the ages of 18 and 35 to buy a home, receive postsecondary education, or start a business. The initial investment per person is projected to grow up to $11,300 in the span of 18 years and to $30,300 in 35 years, with the passage of a constitutional amendment that allows the state to invest the funds in private equities.
- Unemployment insurance for all immigrants, which would create a new unemployment benefit system that provides workers who face job loss with wage replacement regardless of their immigration status.
Progressive revenue is necessary to fund cash assistance
We were elated to see the Washington State Supreme Court rightly uphold the legality of the capital gains excise tax in their recent ruling. Just 0.2% of the wealthiest of Washingtonians will pay this modest excise tax on the sale of stocks and bonds. The tax will bring in $500 million for early learning, childcare, and schools and it marks a big step toward balancing our state’s tax system, where people with the lowest incomes pay the most in taxes as a share of their income.
Lawmakers have several additional progressive revenue proposals before them now, such as the wealth tax, reforms to the estate tax, and reforms to the real estate excise tax. In total, these policies could raise more than $7 billion over the next four years from the wealthiest Washingtonians to help fund cash assistance programs. They are a necessary step to move our state toward greater economic and racial equity.
