Senate Democrats unveil plan for $59.2 billion budget and $7 billion in federal funds
Senate Democrats unveiled a two-year operating budget proposal Thursday that allocates $59.2 billion toward priorities largely colored by current crises, plus $7 billion in new federal stimulus money targeted at pandemic relief.
The Senate plan for the 2021-23 operating budget taps the state’s “rainy day fund” for $1.8 billion in one-time spending and includes new revenue from a 7 percent tax on capital gains over $250,000. Spending is aimed at public health, relief for people and businesses hit hardest by the pandemic, and a slate of other efforts.
The proposal, federal stimulus money aside, would represent a roughly 12 percent increase in spending over 2019-21.
It comes in the wake of a state revenue forecast, released last week, that showed projections through mid-2023 nearly on-par with what was expected before the pandemic — a much rosier picture than expected shortly after COVID-19 hit.
Without the one-time spending directed at pandemic recovery, lawmakers argue it would not be possible to invest in forest fire prevention, developmental disability services, and other long-term priorities.
“This budget is an important document, it’s an important blueprint for the state’s future,” said Sen. Christine Rolfes, D-Bainbridge Island and chair of the Senate Ways & Means Committee.
“This budget spends a lot of money. Our state budgets always spend a lot of money. But this money is being used to stabilize our economy, to stabilize our health care system, to stabilize our schools, to stabilize our environment, and to stabilize the working families of our state and strategically bring us out of this pandemic into a strong recovery and into a more resilient state.”
What’s in the proposal
Big items in the budget include $1.7 billion in federal grants to school districts that will be allocated via a formula from the Title I program, which takes into account the number of low-income families in a district.
Hundreds of millions of dollars more in the plan go toward efforts related to special education, increasing counselors in high-poverty districts, and stabilizing funding for schools that have seen a drop in enrollment during COVID-19.
The state’s public health system would also receive a major injection of federal funding: $1.1 billion in one-time money would go toward vaccinations and other COVID-19 response efforts. The proposal also allocates $150 million for foundational public health services.
Money for other major policy priorities is included, such as the governor’s cap-and-trade proposal, the HEAL Act that aims to reduce environmental health disparities, and a new Office of Independent Investigations.
Other major destinations for funding include:
- $100 million to reduce rates on the Washington Health Benefit Exchange.
- $454 million to increase vendor rates for nursing homes, assisted living centers, and adult family homes.
- $201 million in federal funding for foreclosure prevention and assistance services.
- $495 million in federal funding for rental and utility assistance for low-income renters.
- $500 million in state money for unemployment insurance tax relief for businesses.
- $125 million for wildfire prevention and suppression.
The federal government determined how most of the $7 billion in stimulus money in the plan will be spent, according to staff, while the state had flexibility in how to spend about $500 million included in the operating budget. The Immigrant Relief Fund would get $300 million of that flexible stimulus money, and $200 million would go toward expanded paid family leave for people who couldn’t work during the pandemic.
The Senate narrowly passed a controversial capital gains tax bill earlier this month, and it’s now in the House Finance Committee. The operating budget plan includes $357 million from that tax, which lawmakers say would go toward the Fair Start for Kids Act to expand access to affordable childcare.
Some other revenue from the tax would filter to a “Taxpayer Relief Account” that’s separate from this budget proposal and could go toward funding the working families tax exemption.
“Everywhere you look in this budget, we have seized the opportunity to build a stronger, more equitable state,” Rolfes said in a prepared statement. “This is an ambitious set of priorities that will guide a sustainable recovery. It is a budget that meets the moment.”
When all is said and done, the proposal leaves $1 billion state funding and $2.3 billion in federal funding “to guard against a future fiscal emergency,” according to a press release.
House Democrats planned to release their plan Friday afternoon, and the two chambers will negotiate on a final plan. The current, 105-day legislative session ends April 25.
Budget documents are available online at leap.leg.wa.gov.
This story was originally published March 25, 2021 at 2:33 PM.
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