Finalized just in time to avert a partial state government shut-down, negotiators from the House and Senate reached a deal on our state’s biennial budget. Their work was cut out for them this year between the need to meet the McCleary mandate and the challenges of a divided government. We were pleased overall by our state’s investments in critical basic needs programs and were encouraged to see new revenue, but were disappointed that the legislature declined to raise revenue from progressive sources.
Some highlights of the budget include:
- Redefining Temporary Assistance for Needy Families (TANF)’s work requirements to allow for up to two years of vocational education, creating more access for parents on TANF to get a credential from a community or technical college (aka our TANF 24 campaign).
- Increasing the TANF grant by 2.5%, meaning $15 more in the pocket of a family of four to meet their basic needs each month. While we still haven’t fully restored the 2011 cut, we have managed to increase the TANF grant steadily over the last several years. And it was no small feat given this year’s budget climate!
- Increasing the funding for civil legal aid by $4.8 million, an important first step in ensuring access to justice for low-income Washingtonians. This amount does not fully close the gap in need so we will continue to advocate investment in this critical service.
- Investing in a Dental Pilot Project to allow greater access to care for Medicaid patients with diabetes and/or who are pregnant in three rural counties — Yakima, Cowlitz, and Adams.
- No big cuts vital basic need programs. Despite the threat of deep cuts to our safety net programs for families and people with disabilities in the Senate budget, our advocacy ensured no grant reductions or eligibility restrictions to basic needs programs, including TANF, Working Connections Child Care, Housing & Essential Needs (HEN), the Aged, Blind & Disabled (ABD) grant, and State Food Assistance.
Read our analysis of the final budget here.
About that revenue
The state will raise an addition $7.4 billion over the next four years as follows:
The majority of the funds will come from increased property taxes. An estimated $6.6 billion will be generated by increasing the state property tax rate to $2.70 of assessed property value.
Another $1.3 billion is generated by closing tax loopholes by: 1) taxing out of state internet sales; 2) allowing sales tax to apply to bottle waters and certain fuels; and 3) applying a business and occupation tax to out-of-state retailers that aren’t physically present in Washington (like ebay). In a piece of good news, the Governor also vetoed two big tax breaks to large corporations in manufacturing and coal-energy that to the tune of at least 40 million/year.
While we applaud the raising of new revenue, the way the revenue was raised does not increase equity in the state. The property tax is a mixed bag, hitting some middle income homeowners hard. Taxing assets like capital gains for the wealthiest households in our state and closing large tax loopholes would be much more equitable, sustainable solutions to our state revenue needs. We will keep advocating for fair revenue options in the years to come to invest in all our communities.