The Washington State Capitol in Olympia. (Emma Epperly/WNPA Olympia News Bureau, file)

The Washington State Capitol in Olympia. (Emma Epperly/WNPA Olympia News Bureau, file)

State Senate Democrats unveil ambitious $59.2B spending plan

The proposal would use reserves and federal aid for economic recovery and the fight against COVID-19.

OLYMPIA — With rising tax collections and a bounty of federal aid, Senate Democrats unveiled an ambitious budget Thursday that funds the state’s pandemic response, strengthens its safety net of social services, and confronts long-term challenges posed by wildfires and pensions.

Their blueprint diagrams a whole lot of spending. At the core is $59.2 billion contained in the next two-year budget. On top of that, there’s $7 billion in federal funds coming to Washington via the American Rescue Plan and earlier COVID-19 relief packages.

Of the federal dollars, $1.1 billion is earmarked for the coronavirus response, including vaccination efforts, testing and contact tracing. Another portion is for direct aid to struggling families, businesses, immigrants and health care providers. Existing assistance programs for renters and homeowners get another financial injection. And hundreds of millions of dollars are used to expand child care programs and help operators of long-term care facilities.

Meanwhile, in the regular budget, Democrats, boost spending across state government to reach everybody in all corners of the state. As part of the approach, they sweep emergency reserves in the Rainy Day Fund and pencil in receipts from a capital gains tax to do everything they wanted to do.

“This budget spends a lot of money,” said Sen. Christine Rolfes, D-Bainbridge Island, the lead writer of the budget. “This money is being used to stabilize our economy, to stabilize our health care system, to stabilize our schools, to stabilize our environment, to stabilize the working families of our state and strategically bring us out of this pandemic into a strong recovery and into a more resilient state.”

Democrats provide roughly $660 million to public schools to offset the loss of revenue from declining enrollment and transportation expenses, plus money to accelerate programs to deal with learning loss during the pandemic. The budget proposal would sweep $1.8 billion from the state’s rainy day fund to cover the costs.

The budget also contains $500 million to buy off a hike in unemployment insurance taxes on businesses next year. It makes an $800 million payment into the teachers retirement system to reduce its unfunded accrued liability.

There’s also $125 million for developing an approach to improving the health of forests and reducing the threat of wildfires and $100 million to eliminate state employee furloughs penciled in for the next biennium.

It commits $150 million to the state’s public health system which has borne the brunt of the response to the pandemic. And it transfers $800 million of state funds into an account the Legislature can tap to address unexpected emergencies.

“This is a bold and equitable budget that invests in the recovery that our state badly needs at this this time,” said Democratic Sen. June Robinson, who is a vice-chair of the Ways and Means Committee and sponsor of the tax bill. “(It) will make a significant difference in the lives of the people I represent and all across the state. “

Republicans viewed the proposal as a case of good news and bad news.

“There are things to like about this budget, and Republicans have ideas for making it better,” said Sen. Lynda Wilson, the ranking Republican on the Senate budget committee. “But by linking it to an unnecessary, unconstitutional tax that was already rejected by Republicans, the Democrats have guaranteed the Senate budget will be purely partisan. That’s truly disappointing.”

Money from the proposed 7% tax on capital gains above $250,000 would fund child care and early education programs, and provide tax relief for low-income families. It has passed the Senate and awaits action in the House Finance Committee.

Critics contend it is a tax on income that’s illegal under state law. If it is enacted, a lawsuit challenging its legality is expected to be filed.

A hearing on the budget is set for 1 p.m. Friday in the Senate Ways and Means Committee. The Senate is expected to vote on it next week.

Meanwhile, House Democrats are slated to release their proposed budget at 3 p.m. Friday. A hearing is scheduled Saturday in the House Appropriations Committee with the House likely to vote on the spending plan April 3.

“We’re making some good investments to deal with COVID and promote recovery,” Rep. Lillian Ortiz-Self, chair of the Democratic Caucus, said Thursday. They will be focused on “where people have been hit hardest and what they need to get back on their feet again.”

Once budgets are passed in each chamber, negotiations will begin on a final version. The 105-day legislative session ends April 25.

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