Washington state’s Senate released its two year operating budget proposal last Friday, March 29, just a few days after the House’s operating budget proposal. Senate budget writers have taken critical steps in the right direction with their investments and budget priorities. The 2019-2021 Senate budget proposal makes huge strides toward ensuring we have a tax code in which the wealthy pay their fair share, and low-income people get a much-needed break. It also makes significant investments in many of the basic needs assistance programs that low-income kids and adults rely on during hard times.
For years, Washington state has had the most upside-down state tax structure, with low-income people paying the highest share of their income in taxes. Just like with the House budget proposal, the Senate budget proposal generated new, progressive revenue streams that will not only help balance our tax code, but will also allow lawmakers to increase funding in essential health and human services. The Senate budget proposes important progressive revenue, including:
–Closing the tax break on capital gains, which come from the sale of high-end assets, like stocks, bonds, and property.
–Enacting a graduated real estate tax, which would lower the real estate tax for properties valued at $250,000 or below, and raise the real estate tax for properties valued at $1 million and higher.
–Cleaning up unnecessary loopholes in our tax code, such as eliminating the non-resident sales tax and the preferential tax rates for prescription drug resellers and the tour booking industry.
The revenue generated from the Capital Gains Tax will pay for a Working Families Tax Credit (WFTC), a critical tax rebate for low- and moderate-income families who currently shoulder the highest tax rate in the state. The inclusion of the WFTC is an enormous step toward making our state’s tax structure equitable for low- and moderate-income families. Modeled after the Federal Earned Income Tax Credit, the WFTC will provide an average tax refund of $350 to eligible families, providing a vital income boost and a necessary break from our state’s upside-down state tax code.
The Senate’s budget also included crucial investments to essential state assistance programs that help low-income children and families meet their basic needs, including:
–$15 million in funding for the Housing and Essential Needs (HEN) program. HEN is one of our state’s most effective anti-homelessness programs, and it has not received a funding increase since 2011—even though housing costs and homelessness rates throughout Washington state have risen. This investment in HEN is almost $3 million greater than the House’s proposed investment, and will allow the program to make bigger strides in serving the thousands of people on HEN waitlists throughout the state.
–$175 million toward the Housing Trust Fund. This is $25 million more than the amount proposed by the House, and this large investment will support homelessness resources and housing affordability throughout the state.
–$395,000 to add a dental benefit for the Medical Care Services (MCS) program, which serves elderly and disabled immigrants, and$300,000 for a $166 grant increase to the Pregnant Women’s Assistance program, which will provides modest support to pregnant women who are ineligible for Temporary Assistance for Needy Families (TANF). Both of these investments were also funded by the House.
The Senate has released a strong budget, with substantial, long-awaited overhauls to our state tax structure and investments in many of the state’s lifeline basic needs programs. As House and Senate lawmakers enter budget negotiations, we urge them to retain the proposals listed above, and to also go further in making deeper, more targeted investments in health and human services that benefit Washington’s low-income communities. As lawmakers draft the final budget, they must:
-Ensure equity within the state’s Working Families Tax Credit. Our proposal for the WFTC includes a modernization of the original bill that was passed in 2008 to ensure we do not bake inequities into the creation of this critical program. Eligibility for the WFTC must be expanded so that all people who contribute to our economy are recognized – including immigrants, people who care for family members, and low-income students.
–Pass and fund Second Substitute House Bill 1603, which would end TANF’s permanent disqualification policy and create a TANF time limit extension for homelessness. The House’s budget included $2.7 million to eliminate the permanent disqualification policy, and the Senate recently amended the bill in committee to ensure families that are homeless are not cut off from support. The Senate must schedule this bill for a Ways & Means hearing, pass the bill, and fully fund it in their final budget.
– Stop the sweep of money from the state’s TANF program. Our state’s recession-era time-limit and sanction policies that routinely disqualify so many low-income families from receiving TANF means that the state will sweep $19.7 million out of the program in “savings” due to policies that are kicking families off the program in alarming numbers. This sweep would be on top of $220 million in reduced funding over the last decade, even as the number of families with children living in deep poverty in our state has grown by 30%. We urge lawmakers to reinvest TANF dollars back into the program so families with children in poverty get the support they need.
—Make bold investments in the Housing & Essential Needs program. Both the House’s investment of $12.7 million and the Senate’s investment of $15 million falls far short of the $69 million needed to meaningfully address Washington state’s housing and homelessness crisis and ensure HEN-eligible people on waitlists can be served. Without an investment that meets the level of need, the waitlist for HEN resources will continue to grow.
–Reject the Senate’s proposed cuts to the state’s Medicaid Dental program. The Senate’s budget proposal included an alarming $5.2 million cut to Medicaid Dental, a program which ensures thousands of low-income Washingtonians to receive critical medical care. The Senate must follow the Governor and House’s lead on dental access by revoking this cut and instead investing $19.9 million to support dental’s transition to managed care.
In the final weeks of the legislative session, we must make sure we keep pressure on lawmakers to make bold and deep investments difference in low-income Washington communities with progressive revenue that requires those at the top pay up! Let’s make sure that lawmakers know we’re paying attention to the decisions they’re making for the state’s budget. Take action now!