Inslee Unveils $57.6 Billion Budget Proposal For 2021-2023

OLYMPIA, WA — Gov. Jay Inslee has announced his proposed $57.6 billion budget for the biennium, detailing a series of plans to help the state recover from the coronavirus pandemic.

At a news conference announcing the budget Thursday, the governor began with a suite of proposed spending which he says would help small businesses and state residents as they try to stay afloat through the remainder of the pandemic.

The announcement included plans to spend 100 million each on assistance for small businesses and for rental assistance programs. Similar proposals included legislation to ease unemployment rate increases on businesses, while also increasing weekly unemployment benefits for job-seekers. The governor claimed that, had the increased unemployment spending been in place at the beginning of 2020, 312,000 Washingtonians would have qualified for those increased benefits this year.

Meanwhile, low income residents would also be able to apply for a new working families tax credit.

"This will put dollars in the pockets of lower income working families, and that is the right thing to do," Inslee said.

The governor noted that, while the job market has recovered from its lowest point in spring, there is still significant work to be done.

To that end, Inslee is proposing a large capital budget which his office estimates will create an estimated 36,000 jobs each year over the next two years.

“We must create jobs and stimulate economic growth throughout the state. Therefore, I am proposing a large capital budget,” Inslee said. “One way to do that is tap future bond capacity now to help stimulate the economy and retain construction jobs."

Public health and safety was also one of the biggest talking points at Inslee's unveiling Thursday: the governor detailed a combined $397 million in investments to the state's public health system, with spending allocated for supplies like personal protective equipment and testing kits, plus funding for rapid response programs to protect against large-scale disease outbreaks.

Inslee also detailed new protections for workers who raise health and safety concerns.

"Workers have faced retaliation at times, even for making legitimate health complaints, during the crisis" Inslee said. "I propose we address this problem by increasing the protections for workers who face repercussions for raising health and safety concerns."

To do so, Inslee says his budget includes funding for additional staff at the Division of Occupational Safety and Health.

As for how money will be raised to support new spending, the governor pointed to two potential sources for revenue: a capital gains tax and a new, monthly assessment on health insurance carriers.

Washington is just one of nine states that does not currently have a capital gains tax. As proposed, Inslee's capital gains tax would be a 9 percent tax on sales of stocks, bonds and other assets above $25,000 for an individual, or $50,000 for joint filers. The tax would not be in effect until 2022, and according to the governor's office would only impact a tiny fraction of taxpayers: about 1.9 percent of households, whose average income would be nearly $750,000 a year.

As the governor's budget notes, most of Washington's current taxes disproportionately impact lower-income residents:

The governor supports adding a capital gains tax in Washington in large part because it won’t make the state’s upside down tax system even more regressive. Under Washington’s tax system — the most regressive in the country — the poorest households pay nearly 18% of their income in taxes, compared to just 3% for the very wealthiest households.

If implemented, the tax would raise an estimated $1.1 billion in 2023 and more than $2.4 billion between 2023 and 2025.

For public health funding, the governor has proposed new charges for health insurance carriers in the form of a monthly assessment of carriers based on how many members the carrier serves. That assessment would raise an estimated $205 million during the budget's second year

Other highlights from the governor's proposal include:

• A combined $750 million in spending to address both the homelessness crisis and the mental health crisis. Money would be put towards the construction of affordable housing, plus rental assistance and behavioral health programs.
• $400 million to preserve existing transportation infrastructure. That funding comes in addition to previously announced spending on clean transportation investments in electric ferries and public transit.
• Another $400 million to address educational outcomes for all students, as well as educational opportunity gaps. Earlier this year the governor set aside $191 million in CARES Act funding to support childcare businesses and low income families in need of childcare. The governor says this funding will help build on that effort.

Related:

Inslee Announces Climate Package For 2021-2023

Inslee Unveils WA Budget Goals With A Focus On Equity