Building an Economy that Works for Everyone

COVID-19 Toolkit: Building a Brighter Future for Washington

The policy solutions we need to emerge from this crisis with a stronger state and economy

Washington State’s legislators face enormous challenges in responding to the COVID-19 pandemic, systemic racism and economic recession. They also have a once-in-a-generation opportunity to rebuild our economy so that it better promotes shared prosperity, healthy communities, and opportunity for all Washingtonians.

This toolkit will help us rebuild our state so that we come out of the pandemic and this recession to a stronger and brighter future.


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Over one million Washingtonians have lost work and income due to the pandemic. But even before social distancing, many were living precariously. Washington is home to some of the wealthiest people on the planet, yet basic housing and food insecurity are on the rise in communities across the state. According to the 2019 American Community Survey, 1.8 million state residents and 13 percent of children under age five were growing up in deep poverty.[1]

The top 20 percent or so of executives and professionals prospered during the boom years of the 2010s, but many households that once would have been considered comfortably middle class have struggled to meet skyrocketing costs for housing, health care, child care, and college tuition. Persistent and pervasive racism and gender-based discrimination intersect with economic and regional inequality to create additional barriers to individual opportunity and economic security.

State government has a unique role to play in helping reshape our economy so that we all do better together.

A decade ago during the Great Recession, legislators faced a budget deficit as they do today. From 2009 through 2011, Washington’s policymakers chose a mostly cuts approach to balancing the budget. They cut people off of health coverage, childcare supports, and TANF; reduced home healthcare for vulnerable seniors and disabled people; slashed public health and mental health; increased K-12 class sizes and college tuition. Many of these services have never been restored to their 2008 levels.

State and local government budget cuts caused long-lasting human suffering and exacerbated economic and racial inequality. Reduced public spending meant more job losses, driving our state into a longer and deeper recession. The policy choices of a decade ago made Washington households and state government less resilient and prepared to face the challenges of the current pandemic.

We can choose a different path now. Great wealth exists in our state, but our out dated and unfair tax system provides few tools to tax well-to-do individuals and businesses. Fortunately, we have a number of options that will allow us to raise new revenues from those who are prospering and reinvest that money in state services that will help all individuals and communities across our state thrive.

Washington’s Economy in the Age of COVID-19

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Growing Income Inequality Exacerbated by COVID-19

The COVID-19 pandemic has pushed millions of Washingtonians to the economic brink – but the crisis has been years in the making. State government must act to rescue our people and rebuild a more equitable economy so that all our communities thrive.

Over the past decade, Washington’s employers added high salary jobs in technology, business, and other professions, along with many low wage jobs in restaurants, retail, and other services.

The resulting population increase and rapid growth in wages at the top pushed up costs for housing and other necessities faster than inflation, straining family budgets and deepening economic, racial, and geographic inequality. Constrained by the state’s inadequate and unfair tax system, public investments didn’t keep pace with growing needs for affordable housing, health care, child care, and education.[1]

When coronavirus hit, many high-wage employees could work from home at full pay – but low- and middle-wage workers in restaurants, child care, retail, and health care either got laid off or were forced to put themselves and their families at risk by continuing essential jobs in the community.

Growing Wage Inequality and Increasing Economic Insecurity

Most of the gains from the past decade of economic growth went to the top. High-salary earners saw big gains in income, while most people’s wages just kept pace with inflation.[2] At least Washington’s minimum wage law has helped ensure the lowest-paid workers don’t lose ground.


Meanwhile costs for housing, transportation, health care, child care and higher education far outpaced the modest increases in a typical Washington family’s income.

  • Median monthly rent in Washington increased $350 per month above inflation from 2007 to 2019.[3] Median home prices in Washington have climbed from 3.9x median family income during the depths of the Great Recession to 5.1x median family income in 2019.[4] Housing prices continue to soar in many counties across the state even during the pandemic.[5]
  • Rising housing costs and gentrification are pushing people further from jobs . From 2010 to 2019 the proportion of Washingtonians with a commute over 45 minutes increased from 14 percent to 20 percent, while those with commute of 15 minutes or less declined from 28 percent to 23 percent.[6]
  • After inflation, since 2005 the average cost for infant care has climbed 23 percent, for toddlers 19 percent, for preschoolers 16 percent, and for school-age kids 18 percent.[7a] Research conducted by The Child Care Collaborative Task Force (CCCTF), formed by the Washington legislature, found that 67 percent of Washington employers report absenteeism cause by child care issues. [7b]
COVID Unemployment Highlights Inequities

Unemployment and income loss during the COVID-19 recession are having an outsized effect on workers in food service, health care, local government, and other services. These workers are more likely to have low or moderate incomes, have less formal education, and be Black, Indigenous, or People of Color.[8]

  • Nearly half (48 percent) of households with incomes below $75,000 have lost employment income during the COVID pandemic, while income loss is much lower in high income households.[9a]

As of October 3, 2020, unemployment claims among workers who:

  • Have completed high school or some college are 2.6 percentage points higher than for those with a Bachelors/advanced degree;
  • Are Pacific Islander, Black, or Native American have averaged 7.5, 2.7, and 2.2 percentage points higher, respectively, than for Caucasian workers – and are 17.5 percentage points higher for those of Latinx ethnicity (all races). [9b]
Billionaires in Washington See Net Worth Jump 28 Percent in First Three Months of Pandemic

Washington has 12 billionaires who collectively saw their wealth increase by $89.9 billion or 28 percent during the first three months of the COVID-19 pandemic even as the state’s economy was reeling from a huge spike in joblessness and a collapse in taxes collected.

Between March 18—the rough start date of the pandemic shutdown, when most federal and state economic restrictions were in place—and June 17, the total net worth of the state’s 12 billionaires rose from $321.4 billion to $411.3 billion, based on an analysis of Forbes data. Forbes’ annual billionaires report was published March 18, and the most recent real-time data was collected June 17 from the Forbes website.

Three Washington billionaires—Jeff Bezos, Bill Gates and Steve Ballmer—saw their wealth grow by 39 percent, 12 percent and 30 percent, respectively, while over about the same period, 1,317,000 of the state’s residents lost their jobs,[9c] 27,000 fell ill with the virus[10a] and 1,200 died from it.

Washington Billionaires’ Worth March 18 to June 17, 2020
Name March 18 Net Worth June 17 Real Time Worth Wealth Growth in 3 Months  Percent Growth in 3 Months Primary Income Source Industry
Jeff Bezos $113.0 Billion $156.8 Billion $43.8 Billion 38.7 percent Amazon Technology
Bill Gates $98.0 Billion $109.5 Billion $11.5 Billion 11.7 percent Microsoft Technology
Steve Ballmer $52.7 Billion $68.4 Billion $15.7 Billion 29.8 percent Microsoft Technology
MacKenzie Bezos $36.0 Billion $51.3 Billion $15.3 Billion 42.4 percent Amazon Technology
Ken Fisher $3.9 Billion $5.4 Billion $1.5 Billion 38.8 percent money management Finance & Investments
Charles Simonyi $3.5 Billion $4.5 Billion $0.96 Billion 27.5 percent Microsoft Technology
Gabe Newell $3.5 Billion $3.5 Billion -$0.01 Billion -0.3 percent video games Gambling & Casinos
Howard Schultz $3.0 Billion $3.9 Billion $0.94 Billion 31.2 percent Starbucks Food & Beverage
James Jannard $2.8 Billion $2.9 Billion $0.06 Billion 2.1 percent sunglasses Fashion & Retail
Craig McCaw $1.8 Billion $1.8 Billion -$0.03 Billion -1.9 percent telecom Telecom
Chuck Bundrant $1.6 Billion $1.9 Billion $0.25 Billion 15.6 percent fishing Food & Beverage
Martin Selig $1.6 Billion $1.6 Billion $0.02 Billion 1.4 percent real estate Real Estate
TOTAL $321.4 Billion $411.3 Billion $89.9 Billion 28.0 percent

Sources: Forbes World’s Billionaires List: The Richest in 2020 and June 17, Forbes real-time estimates


Support for Families and Workers is Crucial Now

In July 2020, more than 355,000 Washingtonians reporting little to no confidence they will be able to pay next month’s rent.[10b] State lawmakers must rescue Washington’s families and small businesses and rebuild a more equitable and resilient economy, through significantly increased investments in housing, child care, health care, higher education, income supports, green infrastructure, and other essentials. Budget cuts in the midst of recession will worsen job losses and force more businesses to permanently close.

Racial Inequality in Washington State

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We want our state to provide a healthy environment and access to opportunity for all Washingtonians. Yet while explicitly racist policies such as red-lining, school segregation, and employment discrimination have been outlawed, “color blind” policies often perpetuate their legacies. Regardless of educational background, Black and Brown Washingtonians are more likely to face unemployment, live in poverty, live and work in unhealthy environments, and experience overreaching and violent policing. Communities of Color accumulate less wealth over time and experience more severe health complications – including from COVID-19.

By considering the differential impacts of policy choices on diverse communities and prioritizing investments in communities furthest from opportunity, we can build a more fair economy.


Both nationally and in Washington, Black, Latinx, and Native American children are more likely than white and Asian students to attend under-resourced K-12 schools.[1] Black and Brown children are more likely to be disciplined and to be disciplined more severely than white children for similar offenses, starting in preschool. This encourages more children of Color to drop out and increases the likelihood of interaction with the juvenile justice system.[2]

Nationwide, 14% of children ages 3 to 18 do not have internet access at home, making school work more challenging – especially with the COVID pandemic. For both internet and computer access, white and Asian children have higher than average access, whereas Black, Latinx, and Native American children have lower than average access.[3] These factors combine with fewer family resources and high tuition to limit access to higher education among Black, Latinx, Native American, and Hawaiian/Pacific Islander students.

Source: Education Research and Data Center Statewide High School Graduate Outcomes

Persistent Employment Discrimination

Both gender and racial discrimination contribute to the wage and employment gaps. Studies show that people with “ethnic” names have a harder time landing a job interview, even with the same resume, and that Black and Brown workers, particularly women of Color, have to accomplish more to demonstrate competence than white coworkers. On the brink of the COVID recession, Black workers faced a 6% unemployment rate at the national level, double the 3% rate for white workers, with big gaps at every education level.[4]

Source: U.S. Census, American Community Survey, 2018

Mass Incarceration

In Washington, the total incarceration rate more than doubled between 1978 to 2016.[5] The war on drugs, the state’s “three strikes” law, and aggressive policing in Black and Brown communities all played a role. Black and Brown Washingtonians are far more likely to experience incarceration, and among those serving life without parole, 28% are Black compared to 3.5% of the state’s population.[6] A conviction record can haunt a person for life, making it harder to secure housing, land a job, or receive financial aid for college.

The Racial Wealth Gap

Black and Brown people get less of a financial head start from their families and accumulate less wealth over their lifetimes than their white counterparts at all educational levels. White college graduates in the U.S. had a median net worth of $339,000 in 2016, compared to $68,200 for Black graduates.[7]

Homeownership and retirement savings illustrate the disparities. In Washington, white households have higher rates of home ownership than any other racial or ethnic group, and double the rate of Black households.[8] Black and Latinx households are less likely to get approved for conventional mortgages than white and Asian households, and when they are approved, they are often forced to pay higher interest rates.[9] Nationwide, 68% of white households have a retirement account, compared to 41% of Black and 35% of Latinx households.[10]

Source: U.S. Census, American Community Survey 2018, Table S2502

Health Outcomes

Black, Latinx, and Native American Washingtonians have been especially likely to contract and become seriously ill with COVID-19. They also experience higher rates of asthma, cardiovascular disease, and diabetes.[11] Nationwide, Black and Native American women are two to three times more likely to die from pregnancy-related causes than white women.[12]

The everyday experience of racism and unconscious bias in the health care system contribute to these disparate health outcomes.[13] Black and Brown households more often live in “food deserts” without culturally appropriate and affordable access to healthy foods,[14]  and are more often exposed to toxins in the environment.[15]

Invest in Communities and Public Services with an Equity Lens 

While inequality and institutional racism are complex problems, the good news is that many of the public investments and policy improvements that will help us rebuild a more resilient economy will also reduce racial inequality – if we pay attention to community priorities and thoughtfully craft policies with a racial equity lens. Key steps include:

  1. Reforming our inadequate and unfair revenue system and investing in healthy communities. Washington has the nation’s most regressive revenue system. Wealthy people here pay much less than in other states, while lower-income households pay more, and we lack the funds to adequately finance public services that are essential for family economic resilience, an overall healthy economy, and to redress racial and ethnic inequity and harm.
  2. Addressing the immediate needs presented by COVID 19. We must reconsider our funding priorities and rethink public policies that harm our communities. We can alleviate some of the immediate harm of COVID-19 and the economic crisis and build a better economy with expanded access to health care subsidies; increased investments in our K-12 and higher education systems to build more culturally-responsive, accessible and effective educational institutions; major new investments to make quality child care affordable, accessible, and sustainable – to both nurture our young children and help out essential workers who are disproportionately People of Color; increased investments in safety nets such as housing and food assistance; and small business support.
  3. Undoing harmful public policies and paying reparations directly to impacted communities. We must find creative ways to repair the damage of past policies and invest directly in impacted communities so that they can respond to their own needs. We will need to make a series of long-term and sustainable investments that support communities through the policy-making process, in the interim, and to various forms of reparations according to the community needs. These investments will not only build a more equitable society, but also a more resilient one that will be better prepared for future disruptions.

Washington’s Budget and Insufficient, Unjust Tax Structure

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Washington State has failed for years to make the investments necessary to promote educational opportunity and healthy communities. Our tax system is both insufficient to meet the needs of our people and unjust because we rely too heavily on sales tax and have not implemented ways to tax high incomes and profits. Economist Dick Conway has labeled Washington’s tax system the worst in the nation, plagued by inadequacy, unfairness, instability, and opaqueness.[1a]

Some problems are masked during economic booms when revenues increase, allowing modest, if insufficient, improvements in services. But recessions cause sales and business tax revenues to plummet – and the current recession will almost certainly linger even after the coronavirus is tamed. According to the September 2020 revenue forecast, Washington’s reserves and rainy day fund, along with reductions already made, provide enough cushion for the biennial budget that goes through June 2021, but we face a budget shortfall of about $2 billion for the 2021-23 biennium – just to maintain the present inadequate level of services.[1b]

The Root of Inadequacy

The sales tax contributes half of all General Fund revenues.[2] But the share of our economy subject to sales tax has been declining for decades as we’ve moved from goods to a service and technology-based economy. In the 1970s, over 50 percent of personal income in Washington was spent on taxable purchases. That rate fell to 45 percent by the mid-1990s and has continued the downward trend since. Even before the pandemic, the Forecast Council projected that only about 35 percent of state personal income would go to taxable sales over the next five years.[3]

As a result, state revenue does not grow as quickly as population, incomes, and demand for state services. At the beginning of 2020 after a decade of strong population and economic growth, the dollar amount of tax revenues had increased, but Washington’s General Fund still represented a smaller share of the state’s economy than it had in 2008 before the Great Recession.

During the last recession, Washington’s legislature slashed spending across the board from 2009 to 2012, then devoted most of the new revenue as the economy recovered to the grossly underfunded K-12 public education system.

A Tax System that Punishes Poverty: Low and moderate income households pay more in state and local taxes in Washington than in other states, while the wealthy pay much less. Almost all of our taxes are regressive. Lower-income households spend all or most of their income, so pay a higher percentage in sales, utility, and property taxes – even though they buy less expensive stuff and live in less expensive homes. Renters also pay property tax through higher rents. Higher-income people spend more on services, which are mostly not directly taxed, and invest more. [4] The tax structures of our nearest neighbors, Idaho and Oregon, are much more evenly distributed across income groups.[5]

Washington’s main business tax, the business and occupation tax (B&O), is on gross receipts, not profits. That makes it is especially hard on small, new, and low-profit-margin companies, while being a negligible amount for major corporations with high profits.

We Can Give Ourselves New Tools to Invest in a Just Recovery and Healthy Communities

Most state services have never recovered from the cuts of the Great Recession. Out-of-pocket costs for health care are increasing, more people are going without insurance, mental health services are grossly inadequate, and our public health systems were strained before the COVID pandemic compounded all these problems. We know that quality child care and early learning are critical to our youngest children getting a strong start. Yet child care teachers make poverty wages and centers are shutting down, while parents struggle to find an opening and can’t afford tuition when they do. College tuition for today’s moderate-income students remains much higher than for earlier generations, even with newly expanded colleges grants.

Without new sources of revenue, Washington will not be able to meet the challenges of the COVID pandemic and rebuild our economy to promote healthy people and communities and true opportunity for all our residents.

Washington is home to millions of individuals and small business owners who worry about the next rent check, along side thriving businesses, highly compensated executives and professionals, and some of the wealthiest people on the planet. During the first three months of pandemic shutdowns, while over one million Washingtonians applied for unemployment insurance and the number without health insurance doubled,[6] twelve billionaires in our state watched their collective personal wealth grow by $90 billion.[7] In almost every other U.S. state, the well-to-do and the fantastically rich contribute a fairer share toward the wellbeing of the communities that help them prosper. Washington can use those same tools, if legislators have sufficient courage to act.

Lessons from Washington’s Anemic Recovery from the Great Recession

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Lack of Tax Diversity and Austerity Created Budget Shrinkage and Job Loss Lasting a Decade

Washington State has failed for years to make the investments necessary to promote educational opportunity and healthy communities because of our insufficient and unjust tax system. Washington stands to learn from its mistakes in the Great Recession, as austerity and cuts caused Washington to lag behind other states in rebounding – to the extent that funding for state services did not reach pre-Great Recession levels when the coronavirus caused the 2020 shutdown.

Tax Diversity and Length of Recession Recoveries

One major difference between Washington and other states’ tax systems is our state’s reliance on sales taxes for the bulk of its funds. Sales taxes accounted for 49.5 percent of the state’s general fund revenue in fiscal year 2019.[1] Through the middle part of the 20th century, when our economy was based largely on the consumption of goods, sales tax revenues largely kept up with personal income growth. For the last 40 years, however, that revenue stream has declined as the economy shifts from goods to services.[2]

While the state taxes construction labor, repair services, and some other services, the retail sales tax does not apply to the majority of services.[3] As Washington gets richer, taxable sales have remained relatively flat, after adjusting for inflation, while incomes have exploded.


After recessions, it may take years for consumer confidence to rise again, and for sales to reach pre-recession levels. According to a study from the Pew Charitable Trusts, Washington took longer to recover tax revenue after the Great Recession than other states, most of which have a diverse mix of sales, income and capital gains taxes.[4] While the average state had a pre-recession peak in revenue in the third quarter of 2008 and recovered in the second quarter of 2013, Washington had a peak in the first quarter of 2008 and recovered in the first quarter of 2015 – almost two years longer. The Urban Institute found that the 2007-2009 hit sales-tax-reliant states unprecedentedly hard.[5]


In Washington, per capita incomes have rebounded from recessions much quicker than taxable sales, which has been generally true throughout the country. In the past six recessionary periods, taxable sales took on average 2.3 times longer to recover than income in Washington. Washington’s unreliable revenue stream is one of the main reasons that Seattle economist Dick Conway highlighted in rating Washington’s tax system 42nd in terms of stability in 2017.[6]

Washington’s proneness to recessions is forecasted to worsen. Because revenue from sales taxes is eroding, the Urban Institute predicts sales-tax-reliant states will continue to face anemic revenue growth compared with other states, causing escalating problems from recession to recession.[7]

Impacts of Austerity

Washington made severe cuts to its budget in response to the Great Recession instead of increasing revenue to make up for the shortfall. The effect of that austerity lasted a very long time. Six years after the recession ended, the Washington Post reported: “So far, states have been slow to undo the cuts they made during the crisis. In Washington state, per-pupil spending remains 28 percent below pre-recession levels, while sticker prices at public four-year colleges is up 58 percent — and that’s all after adjusting for inflation.”[9]

In fact, the impact of the budget cuts lingered through 2020. When looking at the budget per capita and adjusting for inflation, the Near General Fund only last year returned to its per capita levels of 2008. After the McCleary decision, the majority of the recovery gains went to K-12 funding. The funding for everything else, however, was still more than 18 percent lower per capita in 2019 than it was in 2008.


Unsurprisingly, the Near General Fund Budget and revenue from taxable sales correlate strongly. Although the budget has grown significantly in real dollars, Washington has gained more than a million people since 2008, not to mention the 19.1 percent inflationary change during that period – meaning that per capita, the hefty budget growth is an illusion.

In contrast, personal income in the state continued to grow at a fast clip, especially for the wealthy. Since the 1980s, inequality in our state has expanded due to income growth among the top 10 percent, particularly among the top 1 percent. Incomes for the vast majority of residents have stagnated, however.


The lackluster rebound after the Great Recession coupled with an inability to collect revenue reflecting the larger, wealthier populace means that nearly every state agency had significantly less funding per capita in 2019 than in 2008.

While per capita funding for state parks and recreation was almost flat from 1999-2008, the funding has been about 80 percent lower than 2008 for the last eight years. For the Department of Health, it’s about 60 percent lower, and for the Department of Ecology it’s about 70 percent.


Looking more closely, the post-recession budgets have had a discrete effect on the funding for the Department of Social and Health Services. From 2000 to 2019, the amount of cases per year has increased 33 percent. Funding, however has not caught up. From 2000 to 2008, the budget per case averaged $6,639. From 2009 to 2019, the average was $5,029 – 32 percent lower.

Austerity’s Effect on Jobs

While Washington gained jobs during and after the 1990 and 2001 recessions, the opposite was true during the Great Recession. In fact, employment was still below pre-recession levels even three years after the Great Recession ended, despite gaining 150,000 new residents.


The most glaring weakness in the Great Recession recovery was the unprecedented public-sector job loss. Private sector job growth in the Great Recession recovery was better than in the other two. But the public sector saw massive job loss in the Great Recession recovery, largely due to budget cuts at the state level — a serious drag that was not weighing on earlier recoveries.


State government shed 1,600 jobs from June 2009 to June 2012. To keep the same ratio of state jobs to population, the state should have added 3,400.

In the long run, public-sector job cuts also cause job loss in the private sector. First, public-sector workers need good from the private sector. Firefighters need hoses, police officers need cars, and teachers need books. When public-sector jobs are lost, it stands to reason that the need for goods into these jobs will fall as well. Research shows that for every public-sector job lost, roughly 0.43 supplier jobs are lost.[10]

Second, the economic multiplier of state and local spending (not including transfer payments) is large – economic studies place it between 1.2 and 1.5.[11] This means that for every dollar cut in salary and supplies of public-sector workers, another $0.20 to $0.5 is lost in purchasing power throughout the rest of the economy.

According to research from the Economic Policy Institute, fiscal austerity explains why the most recent recovery took so long.[12] Per capita federal, state and local government spending in the first quarter of 2016 — 7 years into the recovery — was nearly 3.5 percent lower than it was at the trough of the Great Recession. That’s in stark contrast to the three recessions prior, when spending was 3 to 17 percent higher after the same amount of time.

This conclusion was echoed by many other economists. “One of the biggest drags on the recovery between 2009 and 2016 was cutbacks in state and municipal funding,” said Yakov Feygin, associate director of the Future of Capitalism Program at the Berggruen Institute. “You had increases in federal spending, but those were eaten up by austerity at the state level. It’s one of the primary reasons we had such a big drag on the recovery.”[13]

“State spending cuts translate into income losses for state employees and suppliers, while tax increases reduce the after-tax income of state residents,” said researchers from the Brookings Institute.[14] “Those income losses are likely to cause follow-on reductions in economic activity, both by directly and contemporaneously reducing aggregate demand for goods and services and by increasing the risk that current disruptions cause scarring that weighs on economic activity for a longer period.”

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Key Investments to Recover and Build a Stronger Washington

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Everyone Deserves Access to Affordable Health Care

Access to affordable, high-quality health care is a cornerstone of building thriving communities. Without it, we can’t erase health, economic, racial, and gender inequities in Washington, or flatten the COVID-19 curve.

We have a patchwork system of health insurance based on employment, age, and income that results in many gaps in coverage. 57 percent of people in Washington received health insurance through employers in 2017, including 13 percent who were employed by federal, state, or local governments.[1] Another 17.5 percent were on Medicare – the federal government plan restricted to those over age 65, often in combination with another plan.[2] Nearly 20 percent were on Medicaid, the jointly funded federal and state plan restricted to low-income households. Altogether, 54 percent of Washingtonians received insurance in whole or part through publicly funded plans, and 5.5 percent were uninsured.[3]

What’s Standing in the Way of Achieving Health Equity?
High Cost

The U.S. health-care system is the most expensive in the world – but that doesn’t translate to better health outcomes.[4] Americans spent more than $11,000 per person on health care in 2018, yet we still have higher rates of chronic diseases such as diabetes, cancer, and heart disease than our peer nations, and millions can’t afford to see a doctor for basic care.[5] Insurance premiums and other out-of-pocket costs for people seeking care, such as deductibles and co-insurance, go up year after year, fueled by rising specialty provider reimbursements, executive salaries, and profits for hospitals and drug makers. Meanwhile, industry lobbyists fight regulation.[6]

A recent Kaiser Family Foundation report showed that two thirds of Americans worry about being able to afford their own or a family member’s unexpected medical bills – even when they have insurance.[7] In 2019, one in three people dropped coverage because of the high cost on Washington State’s marketplace, the Health Benefit Exchange.[8] In addition, one in five Americans in 2018 were considered “underinsured” – meaning a trip to the doctor or emergency room could result in very high out-of-pocket costs.[9] When going to the doctor is too expensive, people must choose between receiving needed medical care and paying for other necessities like rent or food. Skipping care can result in long-term health challenges, costly emergency room visits, and increased costs for the whole system.

Rising Uninsurance

The number of uninsured people fell dramatically after the adoption of the Affordable Care Act (ACA), or Obamacare, but started climbing again over the past two years. Half a million people in Washington were uninsured in 2019. That number has doubled during the COVID crisis, as a record number of people lost their employment.[10]

Unnecessary “Churnfrom Employment-Based Insurance

Unfortunately, tying health coverage to employment means people lose or must change insurance every time they lose or change jobs, and uninsurance rates skyrocket during economic downturns. Medicaid, or Apple Health in Washington, provides coverage to people in or near poverty without employer plans. The ACA created additional pathways to affordable health insurance by providing subsidies to people buying insurance on the Exchange with incomes below 250 percent of the Federal Poverty Level (FPL) and premium tax credits for people up to 400 percent of FPL. However, people just over these income limits can suffer from “income cliffs” and a pay increase can result in losing coverage.

Disparities in Access

Many immigrants are barred from receiving federal subsidies, and undocumented people in Washington are 11 times more likely to be uninsured than their U.S.-born counterparts. People in Black, Native American, and Latinx communities are all less likely to have insurance, often because their employers offer no or poor-quality insurance plans.


Criminalization of Mental Illness and Substance Use

Mental health services and substance use treatment in Washington State have been dangerously underfunded for decades. Rather than supporting people to stay healthy, we rely on police and prison systems to respond to people in crisis. Washington incarcerates more individuals with severe mental illness than it hospitalizes and has only one fifth of the public psychiatric beds necessary to provide them with minimally adequate.[11]

Steps Washington Leaders Can Take for Healthier Communities

Affordable access to medical care for everyone is vital to building an equitable, healthy, and fair society. While we need change at the federal level, there are steps that Washington State policymakers can take to address our state’s health care affordability crisis.

Support Legislation from Washington’s Universal Health Care Work Group

In 2019, the Washington State Legislature created the Universal Health Care Work Group to develop pathways to transition to a system that ensures health coverage for all. That group will have recommendations for the 2021 legislature.

Expand Subsidies and Build Out the Public Option

Washington legislators passed Cascade Care in 2019 to create the nation’s first Public Option, and to increase subsidies on the Exchange to everyone has affordable, quality insurance options. The 2021 legislature will receive the Cascade Care study report, including options for expanded subsidies and funding sources.

Expand Apple Health for People Left Out of Federal Programs

Federal restrictions exclude many people from coverage with federal funds. The state can cover priority groups through Apple Health, including low-income young adults up to age 26[12] and low-income women for one year postpartum,[13] regardless of citizenship status.

Working Families and Our Whole Economy Depend on Child Care

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Child care and early learning are critical to child development, family wellbeing, and business prosperity. Our state’s economic recovery from COVID-19 will depend on many things – including if parents going back to work can find a safe place for their kids.

Even before the pandemic, child care was in crisis. Although state legislators have acknowledged the importance of child care to “the vitality and economic security of our state and communities and families,”[1] they have not followed through with adequate funding. Wages for teachers and caregivers hover near poverty, centers and family home providers struggle to stay open, and families can’t find affordable care.

Adjusting to COVID-19

The pandemic has forced child care providers to cope with uncertain and changing enrollments, new restrictions on total capacity and extra cleaning, all while putting themselves and their family members at risk. Since March, 2020:

  • 33% of workers in child care have been laid off
  • 1,100 centers, family homes, and school-aged-care programs have closed (20% of all programs)
  • 26% of licensed slots have been lost, totaling 49,000 slots
  • 45% of all programs are in danger of permanent closure
  • Because of COVID health mandates, the cost of operations has increased by about $18,000 a month for a child care center with 50 kids, with no assistance from the state.
Underfunding Deepens Racial and Gender Inequality
  • Among the childcare workforce – Washington’s failure to invest in compensation for early learning teachers and caregivers perpetuates racial and gender inequities. Women make up 89% of the early learning workforce, which is also disproportionately composed of workers of Color.[2] Despite the importance of the field to our whole economy, wages hover just above minimum wage, and thousands of workers have no access to health insurance.

Sources: Washington Employment Security Department, Median and Hourly Wages; Department of Early Learning, 2018 Child Care Market Rate Survey Final Report

  • Among kids – Children from low-income families, who are disproportionately children of Color, get the biggest boost to school readiness from quality early learning– and suffer the most when quality care is inaccessible.
  • Among women workers – Mothers are the ones who most frequently cut back on hours at work and forego promotions when quality and affordable child care is not accessible.
Building a Strong Childcare System for Thriving Kids, Families, and Communities is Possible – with Major New Investments

To cope with COVID requirements, providers need:

  • Grants to cover adapting facilities for smaller classes and physical distancing and for purchasing personal protective equipment and cleaning supplies
  • Reimbursement for subsidized children at full market rates and for monthly enrollment, not daily attendance
  • Bonuses for irregular and extended hours of work

To build the child care system kids, families, and businesses need for a thriving future, we need:

  • Competitive wages and health benefits and professional training for the early learning and care workforce, including parity with K-3 teachers, as recommended by the Legislature’s 2018 Compensation Technical Work Group[3]
  • Continuation of higher subsidies and monthly reimbursements for state-subsidized children, along with additional flexibility for eligibility so that kids don’t lose their slot if a parent is laid off – or gets a small raise
  • Extension of the subsidy schedule up to median income as a step toward ensuring families pay no more than 7% of their income for care

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Equitable Access to the Opportunity of Higher Education

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Higher education is a public asset that strengthens our economy and democracy, and promotes economic resilience for many households. In this unprecedented global pandemic and recession, it is more important than ever to invest in our colleges and universities. Higher education institutions can play a key role in spurring a stronger economic recovery by providing students and the recently unemployed opportunities to learn new skills for the changing job market. But we can only realize this benefit if we invest in equitable access and equip our colleges and universities with the staffing and resources to both educate students and help them achieve degrees.

The Promise of Higher Education

People with college degrees typically earn far more and have more career options than those without – particularly important during times of economic change. In Washington, 70% of jobs now require a postsecondary degree, and Washington has a strong system of 4-year universities and community and technical colleges (CTCs). Yet because we have not invested enough in making higher education affordable and accessible over the past two decades, many of the highest paying jobs are going to people who move in from out of state.[1]

Source: U.S. Census, American Community Survey Table B20004 Median Earnings in the Past 12 months 2018 1 year estimates

30 Years of Declining State Support

With every economic downturn over the past 30 years, legislators have slashed funding for higher education and shifted the cost burden to students through increased tuition and reduced services, and staff in the form of restricted pay, less job security, and increased workloads.

Inflation-adjusted tuition at the University of Washington increased from $5,744 in 2000 to $8,065 in 2008, then skyrocketed during the Great Recession.[2] Even with modest reductions in the past few years, in-state tuition at the UW for fall 2020 will be $11,745.[3] At CTCs, inflation-adjusted tuition increased from $2,434 in 2000 to $3,425 in 2008 and over $4,000 today.

College Grant alone is not enough to create equitable access – While the College Grant program and other forms of financial aid significantly reduce the cost of tuition for many low- and modest- income students, those grants alone do not create equitable access to college. The pathway from high school to college has many barriers for students who are first generation college students, from rural communities, or are Black, Indigenous, or People of Color. Staying in college can also be especially challenging for those who must support themselves, have dependents and other family responsibilities, or face long commutes.[4]

Disparities in access and degree completion are, in part, a result of the systemic underfunding of higher education in Washington.

Investing now in higher education access, affordability, and capacity will help Washington come out of the COVID recession with stronger, more resilient communities and businesses across the state. These investments should include:

  • Ensuring College Grants and other scholarship programs remain available to all eligible students, without further increases in tuition;
  • Investing in student support systems, such as counseling, advising, and child care services;
  • Providing adequate pay to staff and faculty and increasing the full-time to part-time ratio;
  • Investing in infrastructure and other supports for online learning necessary during the pandemic

Progressive Revenues to Rebuild Washington’s Economy

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Washington’s communities are hurting from the combined effects of the coronavirus pandemic, social isolation, and loss of income. To prevent extreme hardship, promote health, and provide opportunity to Washington’s diverse communities, the state must increase investments in public health, education, housing, child care, and income support for the most vulnerable.

Washington State faces a likely budget deficit over the next three years. Cutting the budget now will cause lasting harm to millions. Austerity will feed a downward economic spiral of job loss and business closures that could result in a decade of blight and economic privation.

In responding to this pandemic-recession, policymakers must not repeat the mistakes of 2009 through 2012, when they eviscerated early learning, public health, higher education, mental health, state parks, and income support. Those cuts deepened and perpetuated racial and geographic inequality. As a result, many working families and small businesses were already struggling to make ends meet when the current crisis hit.

Using budget reserves and tapping into the rainy day fund will allow the legislature to avoid making immediate service cuts. In addition, policymakers must make forward-looking choices to raise progressive revenues for new investments that will promote widespread and equitable recovery. Washington is in a relatively fortuitous position, with steadfast pockets of great wealth and thriving businesses. By financing important public services now, we can come out of this emergency into a new and better normal in which all people can face the future with hope.

Progressive Taxes Resulting in Billions of Dollars for the 2021-23 Biennium and Beyond
  • New corporate tax on windfall compensation – up to $1 billion per year: SB 6017, introduced in 2019, would have taxed corporations that choose to pay high salaries on compensation above $1 million. It would have raised $363 million in the current biennium and $625 million in 2021-23.[1] Lowering the threshold to $250,000 could raise at least $500 million annual beginning in 2021.
  • Estate tax reform on the wealthiest estates – $50 million per year: Washington’s estate tax applies to estates valued at more than $2.2 million. Senate Bill 6581, amended to close estate accounting loopholes, would increase taxes on approximately 80 of the wealthiest estates annually – those with values in excess of $6.5 million. [2] It would also eliminate or reduce taxes on estates between $2.2 and $6.5 million. Because the estate tax is already in place, the increases and decreases in taxation could be immediate for all deaths occurring after legislation is signed into law.
  • Remove the cap on the Workforce Investment Surcharge – up to $50 million per year: In 2019 and 2020, the Legislature fully funded the College Grant program for low- and moderate-income Washingtonians through a surcharge on higher-revenue businesses (SB 6492). However, contributions of profitable global corporations were capped at $9 million a year. For Amazon, which made $75 billion in the first three months of 2020, $9 million amounts to 0.00003 percent of its revenue. For the 40 companies with more than $25 billion in annual revenues, the ceiling provides a tax windfall of at least $50 million a year.[3]
  • Billionaire Wealth Tax – over $4.4 billion per year: Washington’s billionaires have a combined wealth in excess of $441 billion. In the spring of 2020 while the pandemic raged, 12 Washington billionaires enjoyed an increase of $90 billion in their combined wealth.[4] This wealth would be subject to a 1 percent tax on intangible property (stocks and bonds) in excess of $1 billion.
  • Millionaire Income Tax – over $3.9 billion per year: A 12.5 percent marginal tax rate for income in excess of $1 million would tax 12,500 people in Washington (one third of one percent of all taxpayers). This rate is lower than California’s top rate. A marginal tax at Oregon’s top rate of 9.9 percent would generate almost $3 billion. Because of State Supreme Court decisions overturning a popular initiative and state law in 1933 and 1935, the millionaire tax would trigger an automatic legal challenge. The Legislature could request expedited review so that revenue could be forthcoming in 2022.
  • Inheritance Tax – $517 million: The inheritance tax is a tax on the privilege of receiving assets from an estate. When it was in law in Washington, it generated three times the revenue later generated by the estate tax.[5] Maryland has both estate and inheritance taxes;[6] New Jersey had both taxes until 2018.[7]
  • Capital Gains Tax – $1 billion per year: Legislators have considered a capital gains tax on wealthy investors over many years. A 10 percent tax on gains above $100,000 would generate $1 billion annually beginning in 2022, assuming expedited review of any legal challenge.[8]
By strengthening our tax system with several of these new progressive sources of revenue, Washington’s policymakers can make the investments critical to recovery from the pandemic and to building healthy communities in which all Washington residents have the opportunity to thrive.

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[1] Low income here is defined as below 200% of federal poverty level, and deep poverty as below the poverty level. U.S. Census Bureau, American Community Survey, 2019, Table S1701.

Growing Income Inequality Exacerbated by COVID-19

[1] Adjusted for inflation, per capita Near General Fund revenue didn’t return to 2008 levels until 2019. See “Lessons from Washington’s Anemic Recovery from the Great Recession”,

[2]   Economic Policy Institute analysis of Current Population Survey data.

[3]   Analysis of American Community Survey Median Monthly Housing Costs for Renter-Occupied Housing Units (Table DP04) and Median Family Income in the Past 12 Months (Table S19113).

[4]   Analysis of data published University of Washington Runstad Department of Real Estate, and American Community Survey Median Income in the Past 12 Months (Table S1903).

[5] Seattle Times, “Record-breaking prices and a cutthroat market,” August 7, 2020,

[6]   American Community Survey 1-year estimates, “Travel Time to Work for Workplace Geography” for years noted.

[7a]   Analysis of data published by Kids Count Data Center.


[8]   Analysis of continuing/ongoing regular unemployment insurance claims demographic data published by Washington Employment Security Department for weeks ending April 18 through July 11,

[9a]   Analysis of U.S. Census Bureau Household Pulse Survey data, Weeks 1-11, for Washington.

[9b] Based on analysis of Washington Employment Security Department Unemployment Insurance Data and Bureau of Labor Statistics Quarterly Workforce Indicators. Percent of group working population reflects 2019 Q3 data (latest available). Reflects continued claims for regular Unemployment Insurance (UI) only.



[10b] U.S. Census Bureau Household Pulse Survey, week 11 (Washington).

Racial Inequality in Washington State

[1] Garcia, Emma. “Schools Are Still Segregated, and Black Children Are Paying a Price.” Economic Policy Institute, 12 Feb. 2020,

[2] Lopez, German. “Black Kids Are Way More Likely to Be Punished in School than White Kids, Study Finds.” Vox, Vox, 5 Apr. 2018,; Libby Nelson & Dara Lind Published: February 24, 2015. “The School to Prison Pipeline, Explained – Justice Policy Institute.” – Justice Policy Institute,

[3] “More than 9 Million Children Lack Internet Access at Home for Online Learning.” USAFacts, USAFacts, 14 Apr. 2020,

[4] Elise Gould and Valerie Wilson, “Black workers face two of the most lethal preexisting conditions for coronavirus—racism and economic inequality,” Economic Policy Institute, June 2020,

[5]  “About Time: How Long and Life Sentences Fuel Mass Incarceration in Washington State.” ACLU of Washington, 21 May 2020,

[6] Green, Marcus Harrison. “Washington State’s Other Epidemic: Mass Incarceration.” Crosscut, Crosscut, 23 Mar. 2020,

[7] Mishory, — Jen, et al. “How Student Debt and the Racial Wealth Gap Reinforce Each Other.” The Century Foundation, 9 Sept. 2019,

[8] “Demographic Characteristics for occupied housing units” American Community Survey, 2018    1-year estimates

[9] DeSilver, Drew, and Kristen Bialik. “Blacks, Hispanics Face Mortgage Challenges.” Pew Research Center, Pew Research Center, 30 May 2020,

[10] Rhee, Nari. “Race and Retirement Insecurity in the United States.” National Institute on Retirement Security, 2013,

[11] “Increasing Health Equity.” Washington Health Alliance, 2016,

[12] “Racial and Ethnic Disparities Continue in Pregnancy-Related Deaths.” Centers for Disease Control and Prevention, Centers for Disease Control and Prevention, 6 Sept. 2019,

[13] Villarosa, Linda. “How False Beliefs in Physical Racial Difference Still Live in Medicine Today.” The New York Times, The New York Times, 14 Aug. 2019,

[14] Harris, Mark. “Seattle’s Unhealthiest Neighborhoods Dubbed Food Deserts.” Seattle Magazine, Seattle Magazine, Dec. 2011,

[15] “Washington Tracking Network: A source for Environmental Public Health Data” Washington State Department of Health

Washington’s Budget and Insufficient, Unjust Tax Structure

[1a] Conway, Dick. “Washington State and Local Tax System: Dysfunction & Reform,” 2014, p vii,

[1b] Washington Office of Financial Management, “State revenue projection for 2019–21 increased by $2.2 billion, but revenue collections remain below pre-pandemic levels” September 23, 2020,

[2] For a more detailed explanation of all Washington’s General Fund revenues, see Washington Senate Ways and Means Committee, “A Legislative Guide to Washington’s Tax Structure,” 2020,

[3] Washington Economic and Revenue Forecast Council, February 2020 forecast, pp. 44-48,

[4] Institute on Taxation and Economic Policy, “Who Pays,” 2018,; Washington Tax Structure Study, Tax Alternatives for Washington State, 2002, chap. 4,

[5] Institute on Taxation and Economic Policy, “Who Pays,” 2018,

[6] Washington Employment Security Department,; and Office of Financial Management,

[7] Americans for Tax Fairness, “Billionaires Boom as State Budgets Go Bust,” July 15, 2020,

Lessons from Washington’s Anemic Recovery from the Great Recession

[1] Economic and Revenue Forecast Council. Washington State Economic and Revenue Forecast, Volume XLII, No. 4. 2019, p. 45.

[2] Church, Jonathan. “Explaining the 30-year shift in consumer expenditures from commodities to services, 1982–2012.” Monthly Labor Review, U.S. Bureau of Labor Statistics, April 2014.

[3] Washington Department of Revenue. Services subject to sales tax.

[4] Pew Charitable Trusts. “Fiscal 50: State Trends and Analysis.” March 1, 2018.

[5] Francis, Norton and Frank Sammartino. “Governing with Tight Budgets: Long-Term Trends in State Finances.” Urban Institute, 2015, p. 9-10.

[6] Conway, Dick. “Washington State and Local Tax System: Dysfunction & Reform.” Dick Conway & Associates, 2017, p. 17.

[7] Norton, op. cit.

[8] Farmer, Liz. “Why States’ Increasing Reliance on Sales Taxes Is Risky.” Governing, September 22, 2015.

[9] Guo, Jeff. “College will soon be a ton cheaper in Washington state. Thank Microsoft.” Washington Post, July 2, 2015.

[10] Pollack, Ethan. “Dire Straits: State and Local Budget Relief Needed to Prevent Job Losses and Ensure a Robust Recovery.” EPI Briefing Paper No. 252, Economic Policy Institute, 2009, p. 5.

[11] Scott, Katie. “Keeping up with the Economy: Local Economic Multipliers.” Pulse, National Association of State Procurement Officials, June 4, 2019.

[12] Bivens, Josh. “Why is recovery taking so long – and who’s to blame?” Economic Policy Institute, August 11, 2016.

[13] Blumgart, Jake “The pandemic is pushing US city budgets into a new age of austerity.” CityMetric, May 5, 2020.

[14] Fiedler, Matthew and Wilson Powell III, “States will need more fiscal relief. Policymakers should make that happen automatically.” Brookings Institute, April 2, 2020.

Everyone Deserves Access to Affordable Health Care

[1] U.S. Census Bureau, Private Health Insurance Coverage by Type and Selected Characteristics, 2018 American Community Survey 1-year Estimates, Table S2703, (2019), Retrieved from

[2] Centers for Medicare and Medicaid Services, 2018 Medicare Enrollment, MDCR Enroll AB2,

[3] Wei, Yen. Public-funded Health Coverage in Washington: 2017, Research Brief No. 92,
August 2019, Washington State Office of Financial Management.

[4] The Commonwealth Fund, Health Care Spending in the United States and Other High-Income Countries, (2018),;

Anderson, G., Reinhardt, U., Hussey, P., et al, It’s The Prices, Stupid: Why The United States Is So Different From Other Countries, Health Affairs, 22 (3), (2003)

[5] Centers for Medicare & Medicaid Services, Historical,

[6] Altman, Stuart and Mechanic, Robert. Health Care Cost Control, Health Affairs, (2018),

[7] Pollitz, K, Rae, M, Claxton, G, et al. An examination of surprise medical bills and proposals to protect consumers, Peterson-KFF Health System Tracker, (2020)

[8] Washington State Health Care Authority, Request for Applications: Cascade Care Public Option Plans, (2020),

[9] Collins, S., Bhupal, H., Doty, M., Health Insurance Coverage Eight Years After the ACA, Commonwealth Fund, (2019),

[10] OFM, Estimated Impact of COVID-19 on Washington State’s Health Coverage, (2020),

[11] Treatment Advocacy Center, Washington (accessed 2020),

[12]  HB 1697 – 2019-20, Concerning health coverage for young adults.

[13]  SB 6128 – 2019-20, Extending coverage during the postpartum period.

Working Families and Our Whole Economy Depend on Child Care

[1], Second Substitute House Bill 1344, Section 1 (1)

[2] Sources:    Total count for workers in Washington, 2017 4th Quarter:  QWI Explorer:; Total count of early learning workers, NAISC Code:  6244 Child Day Care Services

[3] DCYF, Compensation Technical Workgroup, Report to the Washington State Legislature, 2019,

Equitable Access to the Opportunity of Higher Education

[1] Carnevale , Anthony P, et al. Recovery Job Growth and Education Requirements through 2020 State Report.

[2] Aaron Keating, Public Higher Tuition Education in Washington, August 2019,

[3] University of Washington, Cost of Attendance, accessed Aug. 7, 2020,

[4] Berman, Jillian. “More low-income students are attending college, but they’re still playing catch-up on their wealthier peers” MarketWatch, 23, May. 2919,; Office of Financial Management; Education Research and Data Center High School Graduation Outcomes; Darling-Hammond, Linda. “Unequal Opportunity: Race and Education.” Brookings, Brookings, 28 July 2016,

Progressive Revenues to Rebuild Washington’s Economy


[2] The current version would bring in approximately $16 million a year.


[4] Americans for Tax Fairness, Billionaire wealth growth vs state budget/revenue shortfalls, July 13, 2020,

[5] See former RCW 83.01-83.98



[8] See

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    • Susan Fox

      This is excellent! Comprehensive! Compelling! Every Washingtonian should read this!

      Oct 24 2020 at 8:31 AM

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