A new budget put forth by the House moves closer to a compromise with the Senate, while staying committed to investing in Washington’s future. Unlike the Senate’s unsustainable, gimmick-ridden plan for funding improvements to schools, the House plan would ensure these investments remain sustainable in the long term by applying a modest 5 percent tax to capital gains.
Lawmakers have until the end of June to approve a two-year budget that begins on July 1. Now into a second special session, both the Senate and House have revised budget proposals that seek to inch closer to a final agreement. Compared to the budget that passed the House floor in April, the revised House budget:
- Raises about $917 million less in new revenue. The House has removed proposals for a 0.3 percentage point business and occupation (B&O) tax surcharge to service industry businesses, the closure of wasteful tax breaks, and a sales tax on some out-of-state internet retailers;
- Does not include $207 million to bring health benefits for teachers in line with state employees;
- Eliminates funding to provide breakfast for children with low-incomes during the school day, address the educational opportunity gap faced by children of color, and improve educational outcomes for foster children;
- Provides half the amount of funding ($30 million instead of $60 million) for scholarships to students pursuing a degree in science, math, technology, engineering, or health care fields; and
- Does not restore the cut to agencies that provide care to seniors and people with developmental disabilities.
While this revised budget backtracks on some important needs of Washingtonians, it retains core investments in education, health care, and the environment. For example, it still makes strong investments in early learning, provides $1.4 billion toward basic education reforms required under the McCleary ruling, and freezes tuition at colleges and universities while providing more financial aid to students in need. It continues to provide much-needed funding for state parks. It addresses unmet need for people with mental illness. And it increases cash assistance to families receiving Temporary Assistance for Needy Families (rather than making other program changes originally proposed like increasing housing assistance and changing income-eligibility requirements).Overall, the House budget invests $633 million more than the Senate budget (see graph).
What’s more, the House’s proposed tax on capital gains would raise about $550 million over the next two years. Raising this kind of new revenue is an essential feature of a sustainable state budget. It’s the only way to ensure that investments included in both the House and Senate budgets can be maintained in the future.
