Building an Economy that Works for Everyone

The Legislature’s Budget Proposals Fall Short of Ensuring Economic Support for Washingtonians

Lawmakers budget proposals offer modest investments -- we must go farther

As the legislature stands on the edge of passing a new state budget, they have the opportunity to bolster pandemic-era investments and address our state’s most pressing needs – but the budget proposals being considered fall short of providing Washingtonians with real help. Every two years, the Washington legislature passes a biennial state budget allocating our state revenue and determining how much (or how little) will go toward the public services we all rely on, like our roads, bridges, schools, and more. Last month, the House and Senate released their newest budgets for the 2023-2025 biennium. The proposals offer modest investments in critical services, including childcare and early learning, housing, and healthcare, but a big loss overshadows these wins— the billions of dollars lawmakers are leaving on the table by excluding progressive revenue like the wealth tax. Because the wealth tax and other revenue-generating bills are necessary to implement the budget, they are not subject to policy cutoff, so legislators can still pass these common-sense reforms to our tax code before the end of the legislative session on April 23rd. Let’s take a closer look at what else this year’s budgets do (and don’t) include.

Early Learning/Child Care

Both the House and the Senate budgets include supports for childcare providers and family home licensed centers by ensuring reimbursements remain at the 85th percentile of the actual cost of care. The Senate budget included $13.3 million to expand the Working Connections Child Care (WCCC) program for undocumented children and extends WCCC eligibility to some early learning teachers for their own children. The Senate budget also invests $5.8 million to help cover the costs of background checks and licensing fees, allowing teachers and providers more choice in how they invest in their staff and business. It’s good to see these investments in this vital piece of our economic structure. However, this industry still struggles to retain workers and spaces for children. Our state needs to do more.

For example, the Governor’s budget included $107million for the Early Childhood Education & Assistance Program (ECEAP) to fund at least 18,000 new ECEP slots, but both of the legislature’s budgets invest considerably less for new ECEAP slots than the Governor’s. The House invests $39.9 million and the Senate $56.4 million. The lack of childcare available in many of our communities means that more people will struggle to balance work and parenting.

Paid Family & Medical Leave

Both budgets include the funding necessary to maintain the state’s Paid Family & Medical Leave (PFML) program. In addition, the House budget directs ESD to invest $250,000 to study the impacts of lack of job protection for those who access this program and are employed by a company or organization with fewer than 50 employees. This is an important first step in making this vital and popular program stronger.

Health care

The House budget is the stronger version of the two chambers for health care provisions, but still falls short of needed investments. Last year’s supplemental budget established a pathway to develop a Medicaid equivalent program for low-income undocumented immigrants to match what is available for citizens, as well as an approach to allow premium assistance for people earning up to 250% of the federal poverty level on the Health Benefit Exchange. This year, the Senate version excludes the Medicaid equivalent, leaving vulnerable communities with no other option but to pay thousands in premiums and other out-of-pocket costs each year. The House version is much stronger, which includes $95 million in new funding for the Medicaid equivalent, as well as $3 million for outreach for the subsidies on the Exchange. Both budgets maintain existing Cascade Care premium assistance at $110 million for the biennium, which includes $100 million for all residents and an additional $10 million specifically for undocumented immigrants.

Notably, the Senate version includes language to establish a study to evaluate solutions used in other states to address health care industry consolidation. Both chambers include funds to support the Universal Health Care Commission, as well as reproductive care access funding for providers, security grants, public awareness campaigns, and workforce development.

Higher Education

The Senate budget provides a very modest increase in funding for compensation and some financial aid, including extending the length of the WA College Grant eligibility to 6 years (from 5 years for a traditional 4-year program). The House budget does not provide additional compensation funding but does provide for a restrained expansion of the WA College Grant award amount to move eligibility for the maximum award from 60% of Medium Family Income to 65%.

Taxes & Revenue

There are no new sources of revenue included in either budget. The Senate’s Budget reauthorizes the bi-partisan Tax Structure Workgroup (TSWG) and provides it with $2.1 million in new funding for this biennium.  The House Budget similarly reauthorizes the TSWG and calls for another final report to be delivered to the legislature by December 31, 2024, but does not provide additional funding. The TSWG was originally authorized by the legislature in 2017 to investigate the tax code’s structure and make revenue neutral proposals for change; which means that their proposals cannot raise new revenue but must bring in equal amounts of revenue to the current system which we know to be inadequate to keep up with the needs of our state. It’s frustrating to see lawmakers continue to fund the work of this group (which concluded its research and submitted a final report in 2023) that cannot adequately address the issues of our tax code structure when it does not have the power to suggest new revenue sources.

Take Aways

Lawmakers like to say that state budget proposals reflect the state’s values, but this year’s proposals fall short of ensuring adequate economic support for many Washingtonians. This biennium, our state is facing the challenges of increased costs, increased need, and the loss of federal pandemic relief funding. And unlike the Federal government, our legislature must do one thing each year and that is balance the budget. We cannot work from a deficit, which means we need additional revenue. Raising new revenue by taxing the ultra-wealthy (multi-millionaires & billionaires) will not only provide funding for necessary programs, but it will also play a big role in balancing our regressive tax code and addressing racial inequities that have been baked in to our economic and tax systems.

Our state’s budget should be a reflection of our values— values of racial equity, community care, health, tax fairness, and economic justice. The legislature’s budget proposals hold a glimmer of these values, but there’s no way to properly invest in what our state needs without new sources of revenue.

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