Three takeaways from the House and Senate budget proposals

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Three takeaways from the House and Senate budget proposals

Proposals are a good start, but lawmakers must invest more in communities of color and create new tax revenue

By Margaret Babayan, policy analyst, and Liz Olson, policy analyst - February 26, 2020

In the supplemental budget proposals they released earlier this week, the House and Senate both made important new investments. The House plan in particular does a great job addressing some of Washingtonians’ most urgent needs – proposing bigger investments in housing, early learning, and economic security for families with low incomes. Here are three high-level takeaways from both budget proposals:

1. House and Senate budget proposals make smart investments in key areas, but many needs are left unmet especially in communities of color.

Leaders in the House and Senate signaled that they are serious about advancing the well-being of kids, families, and people experiencing homelessness and housing instability in their budget proposals. Both the House and Senate make important investments in the following areas:

  • Housing and homelessness: Each proposal takes steps to address our state’s housing and homelessness crisis by boosting funding for the Housing & Essential Needs program (which provides crucial support to very low-income people who are sick or facing temporary disability), eliminating a policy that reduces cash assistance for people living in shelters, and investing in the Housing Trust Fund.
  • Early learning: House and Senate leaders prioritized investments in our state’s kids and the people who care for them by expanding eligibility for financial assistance to more families who have been priced out of high-quality care. They also increased Working Connections Child Care and Early Care and Education Assistance Program reimbursement rates so that providers who care for kids with low family incomes can afford to stay in business. The Senate’s budget proposal was also amended to include funding for a study that would pave the way to create a statewide Child Savings Account (CSA) program.
  • Economic security for families with low incomes: Both budget proposals reverse damaging cuts and reinvest in WorkFirst/Temporary Assistance for Needy Families (TANF) – which provides a financial lifeline to families experiencing poverty. The Senate proposal funds an additional boost for some low-income families by reinstating the child support pass-through, which would allow WorkFirst/TANF recipients to retain a portion of child support payments made on their behalf.
  • Access to healthy foods: House and Senate leaders answered anti-hunger advocates’ calls to invest in fruit and vegetable access for participants in Supplemental Nutrition Assistance Program (SNAP) and the Women, Infants, and Children (WIC) program.

These important investments in economic security are essential to supporting the well-being of people across the state, but lawmakers fell short of making direct investments in communities of color. They failed to fund the Communities of Concern Commission  and to support community-led efforts to address violence against Native women and girls. Investing in the Communities of Concern Commission would support communities that have been historically targeted for disinvestment to build and strengthen key foundations (like affordable housing, community and cultural centers, and health care clinics). And funding a community-led statewide task force on Missing and Murdered Indigenous Women and Girls would bring Native American and Alaska Native communities closer to justice.

It’s great news that the House and Senate proposals included funding for a statewide Office of Equity to help state officials reduce systemic disparities within government agencies. In their final budget, lawmakers should bolster this important step toward advancing equity by also directly investing in communities themselves.

2. The House budget makes stronger community investments.

The budget proposals in both chambers demonstrate lawmakers’ commitment to investing in our communities, but the House proposal offers an overall stronger approach. Most notably, the House budget proposal:

  • Funds more comprehensive reinvestment in WorkFirst/TANF by restoring commonsense exemptions to the program’s time limit and eliminating unnecessarily harsh penalties for families who face the steepest barriers to work and well-being. It also cuts significantly fewer funds away from the program than the Senate proposal, partially mitigating the trend of diverting dollars away from WorkFirst/TANF as families are pushed off assistance to pay for other parts of the budget. This practice has dramatically reduced spending on the program in recent years, despite ongoing need.
  • Lays the groundwork for a more proportional response to the growing scale of our state’s housing crisis. It dedicates longer-term funding to the Housing & Essential Needs program and funds a pilot program to provide rental assistance to adults with disabilities and seniors to prevent homelessness.
  • Makes more meaningful investments in the early learning workforce and expands access to affordable child care for families experiencing homelessness. The caveat: The House budget neglected to invest in dual language early learning as the Senate did – missing an opportunity to fund educational programs that uplift Washington kids’ cultural and ethnic identities.

3. House and the Senate leaders still have time to clean up the tax code in the final budget.

The latest budget proposals fell short of proposing new tax revenue that could have been used to clean up the tax code and fund community investments. This session, lawmakers relied on a positive revenue forecast with a large, one-time windfall  to fund modest investments in community needs. But long-term, sustainable investments require new revenue sources. Closing the tax break on capital gains  – profits from the sale of corporate stocks, bonds, and other financial assets – is a practical way to generate a billion dollars a year for community investments statewide.

House and Senate leaders also missed an opportunity to fund a modern and equitable Working Families Tax Credit  to balance the tax code for Washingtonians with lower incomes. The Working Families Tax Credit can provide a meaningful boost in income to approximately 1 million households across the state. Moreover, the credit would offset the effect of an inequitable tax code for Washingtonians in the lowest-income tax group, who currently pay six times more of their share of incomes in state and local taxes than the wealthiest Washingtonians.

House and Senate leaders can and should do more to ensure communities are fully funded to meet their potential and that all Washingtonians can thrive, regardless of background.