Awash in money, lawmakers propose big increases in spending

Small business owners and schoolchildren hurt by the pandemic would see some financial relief with approval of state supplemental budget proposals now under consideration.

“We’re looking at the basics, food, shelter, health and cash assistance,” House Appropriations Committee Chair Rep. Timm Ormsby, D-Spokane, said. “Those are things in this pandemic economy that are going to make a difference in people’s lives, and that is our focus.”

The Washington State House and Senate each released their proposals Feb. 21, just hours before public hearings were to be held on the plans. Each chamber is anticipating its plan will be passed within days. Negotiations are expected to begin by the end of the month.

With a projected $2.7 billion in higher-than-expected tax revenue to be collected through mid-2025, each plan proposes significantly increasing spending in the areas of business, education and public health.

The Senate proposal increases overall spending to $63.7 billion, an addition of about $5.8 billion over the two-year budget passed by lawmakers last April. The House adds about $6.2 billion in new spending, totaling approximately $65 billion for the 2021-23 budget cycle.

Neither plan includes general tax increases. The Senate uses all of the leftover $1.3 billion in federal COVID relief funds in their proposal, while the House plans on reserving nearly $1 billion. The House plan also includes a one-time sales tax holiday over Labor Day weekend where qualifying purchases under $1,000 would be exempt from taxation.

Republicans said the proposed one-time holiday is not enough and criticized the majority for not including significant tax cuts within the proposals.

“They have a $13 billion surplus at a time when inflation is at 7.6%, the highest in 40 years,” Rep. Drew Stokesbary, R-Auburn, said at a news conference. “To not have any tax relief for consumers, to try to ease that economic pain or anxiety, is a real missed opportunity.”

 Sen. Christine Rolfes, D-Bainbridge Island, said the addition of tax relief is not completely off the table, as long as proposed cuts do not reduce spending priorities.

“At this point, all creative ideas are on the table,” she said. “Especially things that will help the Washingtonians who are feeling the pinch.” 

Chair of the House Finance Committee, Rep. Noel Frame, D-Seattle, said, “A sales-tax holiday is perhaps the fastest, most direct way for us to get money into the pockets of Washington families.”

Both plans include a $2 billion transfer to fund the proposed ‘Move Ahead WA’ transportation package.

Additional investments included in both plans focus on behavioral health, schools, housing, and business recovery.

The highlights of the House plan include $300 million to create a low-interest student loan program and $150 million to provide utility assistance for low-income households. 

The Senate proposal commits to similar investments, allocating $100 million to help the recovery of salmon and $172 million to boost the number of school nurses, psychologists, social workers, and guidance counselors. An additional $400 million would be used to retrofit schools to better withstand earthquakes.

 A mix of state and federal dollars totaling $700 million would be put toward affordable housing and finding permanent homes for people currently encamped on public rights-of-way.

“It’s evident that after two difficult and challenging years, our state is in a strong position to come roaring back,” Rolfes said. “Today it’s time to look beyond the pandemic, and our proposal does just that.”

Lawmakers will negotiate a final supplemental budget in the last weeks of the session scheduled to end March 10.

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