(The Center Square) – Washington will have a $59.2 billion budget to work with for the next two years and millions less in emergency cash.
The 2021-2023 budget House and Senate Democrats passed Sunday along party lines marks a 12% increase in state spending over the 2019-2021 budget. It's millions more than the $58.9 billion budget Senate Democrats proposed in March and Gov. Jay Inslee's $57.6 billion plan from December.
It's also buoyed by about $10 billion in federal money to combat the COVID-19 pandemic, which shot the state's jobless rate to 15.4% a year ago. It stands now at 5.4%.
Most of that federal stimulus money would go to pandemic relief, with $1 billion for the vaccine rollout, $1 billion for housing aid and $3.3 billion set aside for K-12 schools. Another $1.1 billion will sit on the sidelines unless state lawmakers can decide what to do with it before 2024, when states must spend it per federal law.
The new budget also drains the state's $1.8 billion rainy day fund, leaving $36 million in the account. Lawmakers approved of the transfer Sunday. They're able to shift that money because of a 2002 amendment to state law. Washington Republicans floated the idea of diving into the state's rainy day funds in February to fund COVID-19 business grants.
A capital gains tax passed by the Washington Legislature on Sunday will prop up the 2021-2023 budget with some $455 million state analysts project it to bring in over the next two years. The first $500 million it would take in by 2025 would go to the state's education fund. The rest would go to public school construction. The tax will cost the Washington Department of Revenue an estimated $6.7 million to implement and another $122,000 in legal costs for the state attorney general's office.
Republican lawmakers criticized their Democratic colleagues for releasing their final budget only 24 hours beforehand. Washington's economy is growing, they argued, and new taxes are not needed. A capital gains tax also could face judicial scrutiny since it's widely considered a form of income tax, which the state constitution bans.
" 'But it's for the children!' is a manipulative talking point when the money you want to spend on them is risked on an unconstitutional income tax that will be held up in court for a long time," said Sen. Ann Rivers, R-La Center. "Child care should be in the budget itself."
Sen. Christine Rolfes, D-Kitsap, shared her party's opinion that new taxes would help the state expand public services and keep it a step ahead of rising costs.
"As the economy recovers and families recover, I think this budget is perfectly suited to lift everyone up equitably, providing resources strategically where we need them the most," Rolfes said.
Other highlights of the new state budget passed Sunday include $125 million for wildland fighting resources, which will be paid out each biennium per a bill passed Thursday. It joins an $11.8 billion transportation budget and a cap-and-trade bill, including a 5-cent gas tax increase. The two plans passed over the weekend after clearing 11th-hour logjams.
Several other items in the budget include:
• A $77,000 study on the "feasibility of implementing a universal basic income pilot program;"
• A solar siting pilot project from Washington State University in the Columbia River Basin;
• $340 million in federal funds for the Washington Immigrant Relief Fund providing financial aid to undocumented residents
• A $300,000 study on the competitiveness of the state economy by Lt. Gov. Denny Heck.
The 2021-2023 budget now heads to Gov. Jay Inslee's desk, where it has 20 days to receive his signature or a veto.