Washington state’s Senate released its two year operating budget proposal last Friday, March 29, just a few days after the House’s operating budget proposal.S enate budget writers have taken critical steps in the right direction with their investments and budget priorities.The 2019-2021 Senate budget proposal makes huge strides toward ensuring we have a tax code in which the wealthy pay their fair share, and low-income people get a much-needed break. It also makes significant investments in many of the basic needs assistance programs that low-income kids and adults rely on during hard times. This information was provided by Poverty Action Network. More information is available at poverty action.org.
For years, Washington state has had the most upside-down state tax structure, with low-income people paying the highest share of their income in taxes. Just like with the House budget proposal, the Senate budget proposal generated new, progressive revenue streams that will not only help balance our tax code, but will also allow lawmakers to increase funding in essential health and human services. The Senate budget proposes important progressive revenue, including:
–Closing the tax break on capital gains, which come from the sale of high-end assets, like stocks, bonds, and property.
–Enacting a graduated real estate tax, which would lower the real estate tax for properties valued at $250,000 or below, and raise the real estate tax for properties valued at $1 million and higher.
–Cleaning up unnecessary loopholes in our tax code,such as eliminating the non-resident sales tax and the preferential tax rates for prescription drug resellers and the tour booking industry.
The revenue generated from the Capital Gains Tax will pay for a Working Families Tax Credit (WFTC), a critical tax rebate for low- and moderate-income families who currently shoulder the highest tax rate in the state. The inclusion of the WFTC is an enormous step toward making our state’s tax structure equitable for low- and moderate-income families. Modeled after the Federal Earned Income Tax Credit, the WFTC will provide an average tax refund of $350 to eligible families, providing a vital income boost and a necessary break from our state’s upside-down state tax code.
The Senate’s budget also included crucial investments to essential state assistance programs that help low-income children and families meet their basic needs, including:
–$15 million in funding for the Housing and Essential Needs (HEN) program. HEN is one of our state’s most effective anti-homelessness programs, and it has not received a funding increase since 2011—even though housing costs and homelessness rates throughout Washington state have risen. This investment in HEN is almost $3 million greater than the House’s proposed investment, and will allow the program to make bigger strides in serving the thousands of people on HEN waitlists throughout the state.
–$175 million toward the Housing Trust Fund.This is $25 million more than the amount proposed by the House, and this large investment will support homelessness resources and housing affordability throughout the state.
–$395,000 to add a dental benefit for the Medical Care Services (MCS)program, which serves elderly and disabled immigrants, and$300,000 for a $166 grant increase to the Pregnant Women’s Assistance program, which will provides modest support to pregnant women who are ineligible for Temporary Assistance for Needy Families (TANF). Both of these investments were also funded by the House.