House Democrats on Friday released their Washington Recovery budget. As with the Senate budget, it’s not an immodest proposal.
House Democrats unveiled the next step in their plan for community and economy recovery Friday, the 2021-2023 operating budget plan that utilizes state and federal funds to help us recover together by centering people most impacted by the pandemic and prioritizing needs of Black, Brown, and Indigenous communities that have suffered the most health, economic, and education impacts and face the most barriers to recovery.
Seattle Times reporter Joseph O’Sullivan writes,
The roughly $58 billion proposed 2021-23 state operating budget in some ways mirrors the proposal released a day earlier by Senate Democrats. It includes a proposed 7% tax on capital gains over $250,000, which has been opposed by Republican minorities in the Legislature. That is intended to fund a tax credit for low-income families, as well as child care.
And the Friday proposal by the House earmarks billions of dollars in federal COVID-19 relief aid to help the state recover from the pandemic.
But House Democrats in their plan emphasized a slew of different programs to prevent foreclosures and tenant evictions that could make Washington’s already-severe homelessness crisis even worse.
As O’Sullivan reports,
On Thursday, Senate Democrats proposed a roughly $59 billion two-year budget. With the different structures of the two proposals, it’s difficult to compare them side by side.
But both are measurably larger than the $52.4 billion two-year budget when it was signed in 2019.
The Washington Research Council provides some initial comparative analysis.
The House Appropriations Committee chair has proposed an operating budget that is broadly similar to the Senate Ways & Means Committee chair’s proposal. Both would impose a capital gains tax and drain the rainy day fund (the budget stabilization account, or BSA). Both would balance over four years, leaving unrestricted ending balances of $199 million in the House and $179 million in the Senate.
The Senate chair’s version is the high-water mark for spending, though. The House chair’s proposal would increase appropriations from funds subject to the outlook (NGFO) by $1.293 billion less (over three years) than the Senate chair would.
For the 2021 supplemental, the House chair would reduce 2019–21 NGFO appropriations by 2.6%, to $52.313 billion. (This would still be an increase of 17.1% over 2017–19.) For 2021–23, the House chair would appropriate $58.310 billion, an increase of 11.5% over the proposed 2019–21 revision.
WRC senior analyst Emily Makings comments on the House plans for the rainy day fund (Budget Stabilization Account).
The $1.816 billion withdrawn from the BSA would be appropriated to a new “Washington rescue plan transition account.” According to the budget bill, the account could be used to respond “to the impacts of the COVID-19 pandemic including those related to education, human services, health care, and the economy. In addition, the legislature may appropriate from the account to continue activities begun with, or augmented with, COVID-19 related federal funding.” It doesn’t look like any the House chair would make any immediate appropriations from the account. (He would transfer $305 million from the general fund–state to the account in 2019–21.)
At the press conference, Rep. Sullivan said that they are holding this funding in reserve in case it is needed. The funds could better serve that purpose if they remained in the BSA, which is subject to constitutional restrictions on its use. Because employment growth is forecast to be less than 1% in FY 2021, the Legislature needs only a simple majority to use the BSA right now. Next year, if the economy continues to improve, they may need a three-fifths majority. The new account would be subject to no such restriction. But it is that restriction that helps to ensure the reserves are actually there when needed.
More at the link.
Other comparative analyses are available on the LEAP site here. The House budget documents are here. The overview is useful. Here’s the key:
For the 2021‐23 biennium, PSHB 1094 appropriates $58.3 billion NGF‐O and $121.2 billion in Total Budgeted funds. NGF‐O policy level changes are a net increase of $2.3 billion. In Total Budgeted funds, policy level increases are a net $17.1 billion. PSHB 1094 approves the collective bargaining agreements submitted to the legislature.
The ST reports on Republican responses.
In a statement Friday on the House budget proposal, Rep. Drew Stokesbary, R-Auburn, slammed the capital gains proposal, saying “unemployment remains high and the state has not yet recovered roughly 200,000 of its pandemic-related job losses.”
“Our economic recovery will depend on private investors and entrepreneurs betting on Washington’s ingenuity and hard work,” said Stokesbary in prepared remarks. “However convenient of a political target they may be, taxing investments and innovators is a surefire way to hamper the state’s recovery.”
It’s expected that both chambers will pass their budget plans quickly and move to conference committee to resolve differences.