On Sunday, Washington’s 2021 State Legislature ended strong, adopting a two-year operating budget that makes the critical investments in people and services that will help us recover from the pandemic and build a more equitable economy. Federal money from the Biden-Harris American Rescue Plan certainly helped, while Washington’s Democratic legislators deserve credit for standing up to the defenders of the status quo and enacting a new tax on the very wealthy who profit from extraordinary capital gains. That important step toward a more fair and sustainable tax structure means we can continue critical investments in childcare, health, higher education access, and working families after the one-time federal funds run out.
The Legislature took two steps toward balancing Washington’s tax code. As step one, they passed a restructured Working Families Tax Credit with strong bipartisan votes. HB 1297 will refund a portion of the regressive sales and property taxes that lower income Washingtonians pay. It improves on the original Working Families Tax Exemption – which passed in 2008 but never was funded – by expanding the number of people eligible, increasing the amount of the refunds, and most importantly, moving the credit into the base state budget so it won’t require a special appropriation every two years.
Step two was passage of the new tax on people who enjoy more than $250,000 in capital gains on the sale of stocks and investments in a year, bringing Washington’s wealthiest residents a little closer to paying their fair share for state services. There was nothing bipartisan about SB 5096. It squeaked through in a nail-biter on the last day of session with only Democratic votes, and not even all of those. Still, it means our state will have a fairer and more stable flow of public revenue to invest in education, health, and opportunity for all Washingtonians.
Steps toward racial equity were in the forefront throughout the session, including automatic restoration of voting rights and multiple measures to rein in excessive use of force and hold police accountable. And in a major environmental victory, the legislature approved strong new carbon control measures.
A combination of new federal and state funding and smart state policy changes may have saved the child care industry from collapse. Even before the pandemic, providers and teachers didn’t make enough to stay in the field, yet parents couldn’t afford care. Now there is hope that quality child care will be accessible, with more families getting subsidies, providers getting larger state payments, and all licensed providers gaining access to grants. For the first time in a decade, the state is funding compensation for child care workers. Child care workers will also gain access to premium-free insurance through the Health Benefit Exchange.
Public health, behavioral health, and greater access to health care coverage all received boosts in funding. Two policy changes aim at making Washington’s Paid Family & Medical Leave program more equitably accessible by allowing people who lost work due to COVID to qualify for family or medical leaves based on their 2019 work history and by expanding the definition of “family” so everyone can access leave to care for their loved ones. The Legislature took important steps to improve health care affordability by providing $50 million in health care subsidies to people who buy health insurance on our state’s marketplace and expanding postpartum Medicaid coverage for up to one year for low-income women.
All these actions and much more provide a strong foundation for our people, workers, communities, and businesses to gain health and resilience in the coming years.
At the start of the 2021 legislative session, many of us had limited expectations for significant policy progress, given the constraints of conducting business virtually under the cloud of a worldwide pandemic and recession. But crisis also has a way of clarifying priorities and strengthening resolve. Over the past few months, Washington’s legislative leaders rose to the challenge and served us well.
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