On “The Impact” this week we’re focusing on the two-year operating budget proposals backed by the democratic majorities in the House and Senate.
The operating budget covers the state’s payroll for state workers and funds programs for state residents.
Both budgets represent a combination of federal and state tax dollars, both factor in a proposed capital gains tax as an additional source of revenue, and both tap into the Budget Stabilization Account, the state’s $1.8 billion rainy day fund.
The Senate version sponsored by Ways and Means Committee Chair, Sen. Christine Rolfes (D-Bainbridge Island) contains a one time transfer of $1.8 billion from the Budget Stabilization Account to the General Fund.
The House version Sponsored by Appropriations Committee Chair, Rep. Timm Ormsby (D-Spokane) would transfer $1.8 billion from the rainy day fund to a newly created “Washington Rescue Plan Transition Account” that could be used to pay for a variety of pandemic recovery efforts.
Below are some data points from the initial 2021-23 House Democratic Operating Budget proposal:
- $1.185 billion for COVID-19 vaccines, contact tracing and testing.
- $100 million for local public health districts
- $94 million for primary care provider rate increases.
- $415 million for a temporary provider rate increase for long-term care/developmental disabilities
- $2.2 billion for schools including funds for five additional days in upcoming school year
- $1.07 billion for rental assistance to help pay back rent
- $600 million in unemployment insurance rate tax cuts
- $250 million in small business grants
- $90 million for Working Connections Child Care co-pay reductions
- $204.7 million to expand the Paid Family and Medical Leave
- $140.8 million in food assistance programs
- $340 million in unemployment assistance for undocumented workers and their families
- $400 million in child care grants and support for providers
- $144 million for a local government assistance account to help pay for court costs, ballot boxes, Growth Management Act planning, or police reform
- $125 million for forest health and wildfire prevention
Both the House Republican Caucus and the Senate Republican Caucus released separate two-year budget proposals earlier in the session before the most recent revenue forecast projected an additional $1.9 billion for 2021-23. (House, Senate) Neither the $55.5 billion Senate version or the $55 billion House version contained any new taxes. Both contained various tax exemptions.
The proposed capital gains tax remains a point of friction.
“The first 350 million dollars go to the Education Legacy Trust Account in the interest of funding early learning and taking care of our youngsters while their folks are back at work,” said Rep. Timm Ormsby (D-Spokane), Chair, House Appropriations Committee.
“It’s poor economic policy because it disincentivizes investment at a time when we should be encouraging that. It’s also frankly unconstitutional,” said Rep. Drew Stokesbary (R-Auburn), Ranking Member, House Appropriations Committee.
Stokesbary authored the House Republican Operating Budget proposal released back in February.
“I think it was possible to write a budget then and it’s even more possible now to do it without raising taxes,” said Stokesbary.
“People are struggling,” said Ormsby. “Things look good on paper. They don’t look good in every community. Not in my community, the lowest income legislative district in the state.”
There are other areas of the proposed two-year budget where the respective House budget leaders have found common ground.
“I mentioned several things I appreciated about Rep. Ormsby’s budget because they were included in the House Republican budget a few months ago,” said Stokesbary. “… a budget that fully funded the working families tax credit.”…“now it looks like the final budget will hopefully include that.”