WA Senate Democrats’ budget includes state capital gains tax
OLYMPIA, Wash. (AP) — WA Senate Democrats on Thursday released a $59.2 billion two-year budget plan that includes $357 million in new revenue from a tax on capital gains, and laid out how they would separately spend more than $7 billion spending of federal stimulus funds meant to help those hit hardest by the coronavirus pandemic.
Federal stimulus money will address areas ranging from learning loss in schools to child care grants to rental assistance. The largest chunk will be about $1.7 billion for school reopening and funds for schools to address learning loss by students over the past year. Another $1.1 billion will be allocated for vaccine deployment, recruitment of public health workers and other efforts related to the pandemic.
The budget’s capital gains tax, which has already passed the Senate and awaits a vote in the House, would be used to fund child care and expanding a tax credit for low-income families, Rolfes said. Opponents of a capital gain tax have argued that it’s a tax on income that’s illegal under state law and litigation is certain if the Legislature ultimately approves the tax.
Budget writers also tap the so-called rainy day fund to balance out the current budget that ends this summer, transferring $1.8 billion from that fund.
Lawmakers got good news last week, with an updated state revenue forecast showing that were nearly back to where they were pre-pandemic, a significant turnaround from a forecast last summer that projected a $9 billion shortfall.
Democratic Sen. Christine Rolfes, the chamber’s chief budget writer said that early forecast was “the lowest point for us as budget writers.”
“The state’s economy is stronger than people had anticipated,” she told reporters before a news conference announcing the plan. “I think we’re lucky to be able to have the resources that we need to pull everybody out of this equitably across the state.”
The budget plan also includes:
—$150 million for the state’s public health system.
—$450 million in state and federal dollars to increase eligibility and subsidies for child care and increase spending on early learning in the state.
—$850 million in federal dollars for affordable housing and efforts to reduce homelessness, including rental assistance, grants to increase shelter capacity and assistance to help homeowners from going into foreclosure.
—$125 million to bolster firefighting resources and reduce fire risk.
Sen. Lynda Wilson, the lead Republican on the Senate Ways and Means Committee, said in a statement that there were good things in the budget, but by linking tax relief to “an unnecessary, unconstitutional tax that was already rejected by Republicans, the Democrats have guaranteed the Senate budget will be purely partisan.”
WA Senate Democrats also released a $6.2 billion construction budget that would see spending on things like expanding broadband internet access and increasing affordable housing.
Senate leaders unveiled their plans a day before leaders in the House were to release their own budget proposal. Both Democratic-led chambers will move to pass their own budgets before moving to negotiations on agreeing on and passing a final budget plan before the 105-day legislative session ends on April 25.
The WA Senate is scheduled to have a public hearing on its budget plan on Friday, and is expected to have a vote of the full chamber next week.
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