Washington Budget

Just days after the Washington Legislature gave final approval to a new capital gains tax aimed at the state's wealthiest residents, the conservative Freedom Foundation has filed a lawsuit on behalf of five individuals and one couple to overturn the tax.

On Sunday, Democrats adjourned the session having accomplished much of what they set out to do, including passage of a number of sweeping bills that Gov. Jay Inslee, in a statement, called “historic” in nature.

A new state capital gains tax. An expanded and fully funded tax credit for lower-income families. Fresh investments in disaster preparation and foundational public health. And significant new spending in early learning and child care. Those are among the elements of a proposed $59.2 billion, two-year budget Washington Senate Democrats unveiled on Thursday.

Washington’s improving fiscal picture isn’t an anomaly. A recent New York Times analysis shows that nearly half of states saw their revenues increase from April to December of last year. And many more experienced only slight declines. A key factor was federal aid that allowed even laid off workers to keep spending. Now, more federal money is headed to states from the latest stimulus package.

Even as the state of Washington’s revenue picture improves, majority Democrats in the Legislature appear committed to a course that will, one way or another, involve raising taxes this year. Not necessarily to balance a recession-era budget, but instead to reform a tax code they view as regressive and to address gaps and inequities exposed by the global pandemic.

As majority Democrats in the Washington Legislature lay the groundwork for tax increases to fund the next two-year budget, minority Republicans are jumping out ahead by releasing their own tax-averse budget blueprints.

Amid the ongoing pandemic and threats by far-right protesters to "occupy" the Capitol, Washington lawmakers will convene Monday for what will ultimately be a mostly remote 2021 session with a focus on the ongoing response to COVID-19, police reform, addressing climate change and writing a two-year state budget.

COVID-related aid and police reform will be two of the major issues before the Washington legislature when it convenes next month. But newly-reelected Lands Commissioner Hilary Franz hopes legislators will also consider dedicating more funding for wildfire and forest health projects.

COVID-19 has hit at least 158 hospital workers since March, which takes them off the schedule and means a lot of overtime for the workers left on the wards. At least 64 patients have tested positive and one has died. Making matters worse, the economic downturn that resulted from the pandemic, and the loss of revenues needed to run state government s forcing the Department of Social and Health Services to make budget cuts, including layoffs.

The tax measures are contained in the governor's two-year, $57.6 billion operating budget proposal released Thursday in advance of the 2021 Legislative session. Separately, the Democratic governor also released proposed capital construction and transportation budgets.