Legislature sends $59 billion budget to Gov. Inslee

The $59 billion dollars in the spending plan is on top of billions in federal coronavirus relief dollars expected to be spent on a variety of programs, including nearly $2 billion for school reopening, lost learning, and more to deal with the hit to education from the pandemic.

Here is a look at the federal spending.

Federal Funding:
• $1.7 billion for school reopening, addressing learning loss, and other allowable costs under Elementary and Secondary School Emergency Relief
• $1.1 billion for the vaccine deployment, recruitment of public health workers, contact tracing and testing
• $658 million to extend the state’s rental assistance program
• $528 million for childcare grants and provider rates
• $500 million in state funds for Unemployment Insurance benefit relief
• $340 million for grants to adults who have been impacted by COVID-19 but are unable to access other benefits due to their citizenship status
• $187 million to help prevent foreclosure for individuals under 100 percent area median income
• $170 million for family leave during the period of the pandemic

Bolstered by that federal injection of dollars, much better than expected revenues, a capital gains tax and even some reserve dollars, the budget increases spending across the board.

Major Revenue Changes:

• $1.0 billion is transferred into the Washington Rescue Plan Transition Account to respond to the impacts of the COVID-19 pandemic including those related to education, human services, health care and the economy
• $415 million gain from imposing a 7% tax on Washington capital gains realized from the sale of long-term assets
• $34 million gain from creating a framework for registering eligible captive insurers and imposing a premium tax on the risk covered by premiums allocable to Washington
• $12 million loss for mitigation payments for the support of manufacturing and job centers

Other spending includes a mix of state and federal dollars, including billions for child care and early learning, behavioral health, including nearly $90 million to significantly expand treatment in the wake of the state Supreme Court’s Blake decision invalidating Washington’s drug possession law.

Nearly $74 million was also included in the budget to assist counties with resentencing and repayment of court fees and fines necessary after the Blake decision.

Treatment investments related to Blake include:
• $45 million to implement a statewide Recovery Navigator Program that will provide community-based treatment and long-term case management for people with substance use disorder;
• $12.5 million to establish a Homeless Outreach Stabilization Team Program; and
• $4.5 million to expand the successful therapeutic court model to municipal and district courts, which will have jurisdiction over controlled substance possession now that it has been made a misdemeanor.

There’s also $261 million for the Working Families Tax Credit, the long unfunded tax credit for low income families, nearly $130 million for wildfires and forest health, as well as hundreds of millions for Unemployment Insurance relief.

The budget dips into reserves, which are projected to sit at $1.2 billion at the end of the 2021-2023 biennium.

“This is a budget that meets the moment and will guide a sustainable and equitable recovery based on lessons that we’ve learned over the past year,” said Senator Christine Rolfes, chair of the Senate Ways & Means Committee.

“It supports our smallest businesses, rebuilds our precarious childcare system, boosts public health efforts, sustains K-12 education, and even commits to protecting communities against the catastrophic fires we saw last Labor Day. It’s a reflection of our collective strength, determination, and will to recover together,” Rolfes added.

“This is a momentous budget for a time that calls for action. Families and neighbors who have felt held back and forgotten are lifted up with these investments,” said Rep. Timm Ormsby (D-Spokane), Chair of the House Appropriations Committee.

“This budget honors the sacrifices the people in this state have made and reinforces our values of helping those who need it the most,” Ormsby added.

Republicans noted many items in the Democrats’ budget mirrored their own priorities and opportunities laid out in their House and Senate proposed budgets weeks earlier in the session, including the Working Families Tax Credit and unemployment insurance relief, but was a far cry from what they would have done for the people of Washington.

“If you like a budget that is harder on people with lower incomes and people in marginalized communities, and sneaks a billion dollars out of the rainy-day fund into a slush fund, then the Democrat budget is a winner,” Senate Republican budget writer Linda Wilson said.

“Our Senate Republican budget would have maintained services, reduced the tax burden on families and small businesses, saved for the future, and made game-changing investments without requiring new taxes. Our approach respects the people and reflects their priorities, but the Democrats have other interests in mind, and that’s who comes out ahead with this budget,” added Wilson, who called the spending plan a step backward for low-income families.

House Republicans largely echoed that sentiment.

“This budget will make our state less competitive, make our revenue less predictable, and ultimately hurt working families across the state,” Rep. Drew Stokesbary said in a statement on Sunday.

It didn’t take the wind out of Democrats’ sails though, as they celebrated significant changes to finally start to right the state’s regressive tax code and invest in those left behind, including providing small business grants, boosting rental relief and investing in housing and homelessness assistance, along with expanding food assistance and the Temporary Assistance for Needy Families program.

Governor Inslee was equally pleased with Democrats’ achievements in this budget.

“The Legislature passed a budget that strategically directs federal recovery dollars to the people who need it most so that this pandemic does not put more families in a downward economic spiral” Inslee said in a video release following the wrap of the 2021 legislative session.

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