The Washington State Capitol Building in Olympia. (AP file photo)
The $59 billion dollar in the spending plan agreed to by both House and Senate budget writers is on top of billions in federal 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.
• $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 aimed at helping state’s recover from the coronavirus pandemic, much better than expected revenues, the assumed passage of a capital gains tax and even some reserves spending, 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 percent 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
The plan increases spending by nearly $2 billion more than Governor Inslee’s proposed budget released in December, which already increased spending $5.5 billion from the prior budget.
Other spending includes a mix of state and federal dollars, including billions for child care and early learning, behavioral health and more than $74 million to help counties deal with resentencing and repayment of court fees and fines necessary in the wake of the state Supreme Court’s Blake decision invalidating Washington’s drug possession law.
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.
It also assumed $415 million a year in revenue from the 7% tax on capital gains above $250,000. Republicans were highly critical of the inclusion of the tax they argue – and courts and state and federal agencies have agreed – is income tax. But they were more critical of the inclusion of language in the bill that they say serves as a stealth effort to block a referendum after an emergency clause that would have had the same effect was stripped out.
Whether it actually blocks a referendum will be up to the courts, according to the bill’s sponsor Democratic Senator June Robinson.
As to whether the intent of including the clause was to block a referendum, Robinson said, “We are not prohibiting public vote. The initiative process is open to anyone to pursue,” adding that they included the language they believe will ensure those services will be there.