The state budget is not just a statement of our values. It is also a foundation and framework for delivering the everyday services that benefit us all – like ensuring everyone has the opportunity to thrive, making sure we have clean water to drink and air to breathe, and keeping school buses and fire trucks running each day. Republican leaders in the state Senate have proposed a two-year spending plan that would profoundly weaken that framework by slashing vital investments that help Washington’s communities and people prosper – and by failing to come up with the revenue needed to fund schools and other key priorities. Their plan would turn the state budget into a house of cards, at risk of collapsing at the first sign of a slowdown in the economy. And the human cost in terms of the well-being of Washingtonians would be staggering.
Building a responsible and sustainable budget requires lawmakers to take steps toward fixing Washington’s upside-down tax code, which taxes middle- and lower-income households at significantly higher rates than those at the very top of the income scale. Yet the proposal from Republican leaders in the state Senate offers no meaningful reforms to the state’s flawed tax code.
Far from raising the substantial new revenue needed to fully fund education and protect the programs that help Washingtonians who are struggling to make ends meet, their “levy swap” proposal would actually reduce overall property tax resources for schools in our state. It would also be deeply inequitable, raising taxes on millions of lower- and middle-income homeowners and renters in the Puget Sound region.
What’s more, Senate Republicans actually propose creating or extending nine tax breaks, totaling $13.5 million in giveaways in the 2017-2019 budget cycle.
Rather than working to flip our tax code right-side up and improve our quality of life, Senate Republican leaders propose a state budget that nominally balances, but only with the help of unsustainable gimmicks, such as:
- Forcing future lawmakers to make deep cuts to non-K-12 investments – such as health care, child care, job training, safe communities, and other important investments – by dedicating all future revenue growth to maintaining K-12 spending and property tax cuts.
- Draining $700 million in reserve savings from our state’s rainy day fund, the budget stabilization account, which is an essential backstop that prevents severe disruptions in funding for our most important services during recessions and other state emergencies. And Senate Republican leaders offer no plan to replenish it.
- Sweeping $63 million from Temporary Assistance for Needy Families (TANF) to pay for other unrelated budget items. TANF is an essential resource for families trying to get back on their feet. This proposal would take much-needed resources out of programs that help the people who have the hardest time making ends meet and dole those resources out for other investments.
As shown in the chart below, the budget proposal from Senate Republicans would boost state funding for education, but at the expense of essential investments in Washingtonians’ economic security and in community development and trust. Within those categories are programs that are essential to many Washingtonians – programs like TANF, Housing and Essential Needs, state retirement contributions for first responders, and the programs we all count on to protect our legal rights. Thousands of Washingtonians’ lives would be severely and negatively affected by these cuts – and in many cases, they are the people who are already struggling just to get by every day.
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The proposed changes to funding, according to the major value areas laid out in the Budget & Policy Center’s Progress Index framework, are detailed in the sections that follow.
The McCleary Supreme Court case’s school funding mandate has been the most prominent issue in the legislative session so far – and for good reason. Excellent schools are one of the foundations of a thriving economy, and the legislature is facing a deadline for fully funding those schools. While the Senate’s proposed budget increases K-12 education funding by $1.8 billion, or by 7 percent, it makes huge cuts to early learning – slashing $36 million from child care programs. This is because the Senate doesn’t actually raise the necessary new revenue to fund K-12 education, despite the speaking points that make it sound otherwise. The proposals include:
- Undermining the foundations for high-quality early learning, especially for low-income children and families. The Senate plan would limit access to Washington’s Early Childhood Education and Assistance Program – our state’s preschool program that serves families living in poverty – by eliminating 3 year olds from the program and not adding any new slots over the next two years despite 23,000 unserved eligible children in the state. It also guts Early Achievers, our state’s key resource for early learning professionals to access coaching and tools to provide high-quality early care.
- Repealing voter-approved education initiatives. The budget would repeal initiatives 1351 and 732, measures passed by Washington voters to reduce class sizes and fund teacher cost-of-living raises. Refusing to implement voter-approved teacher cost-of-living raises is out of step with the goal of fully funding K-12 education.
- Overhauling the current school funding formula to change the way state disburses money to schools throughout the state. Even though the plan would require sizeable and commendable new investments in K-12 schools, the Senate has proposed to pay for its plan with a levy swap proposal that would actually reduce property tax resources for schools compared to the current system.
- Prioritizing STEM and medical education over the needs of struggling working families. The Senate’s budget provides some increases in the higher education budget. But these investments would come at the expense of the lowest-income working families: $47 million is ransacked from WorkFirst – Washington’s job training and assistance program for families with young children who are trying to get back on their feet – to pay for them. Lawmakers should not be pitting working the needs of families against those of people seeking higher education opportunities.
A community with a thriving economy fosters great jobs and supports working families, ensures stable and healthy housing for everyone, and provides economic opportunity for Washingtonians to meet their basic needs. The Senate Republicans’ proposal eviscerates the parts of our budget that make these values a reality for residents, particularly targeting those programs that relieve hardship among the lowest-income working people. This budget would cut funding for economic security by $132 million, a staggering 13 percent decrease from the amount necessary to maintain current services. Proposed changes include:
- Cutting assistance for people with disabilities at risk of homelessness. This proposal would do away with the Housing and Essential Needs program that provides housing-related assistance to people unable to work because of disabilities. It replaces it with a new program that would only be available to people with dependent children, essentially eliminating services for seniors and single adults and all but guaranteeing an increase in homelessness. It also cuts another crucial program for people with disabilities – the Aged, Blind, and Disabled program – by limiting the time people can be on it to 36 months.
- Ransacking resources from job training programs to plug holes in other parts of the budget. The proposal moves $63 million out of the WorkFirst program and uses the money for other unrelated purposes, such as replacing funding cuts to colleges and universities.
- Pushing people off basic assistance and making it harder for new people to get on. TANF provides basic supports to families with children who are financially struggling. The Senate Republican budget would cut people off the program who have a disability, or people who are needed at home to care for a family member with a disability. It would also require new applicants to prove that they have been unable to find a job before applying for benefits, but it fails to provide necessary help to applicants in their efforts, such as providing for child care while parents are job-hunting. When other states have implemented similar procedural hurdles for families, they saw increases in hardship and spikes in homelessness.
- Limiting options for working families to access child care so parents can go to work. The plan makes Working Connections Child Care, Washington’s largest child care subsidy program for families with low incomes, more difficult to access by changing eligibility requirements, capping enrollment, and creating more red tape for participants.
Washingtonians enjoy clean air and water and an excellent health care system that supports the wellbeing of a vast majority of Washington’s residents. The state budget provides for those benefits by investing in public health clinics, climate protection measures, and mental health services. The proposal would increase funding in this area by only $75 million, a less-than-1-percent boost. The proposals include:
- Failing to provide adequate investments in mental health services. Compared to the budget proposed by Governor Inslee, this budget falls short on the immediate investments to address safety and staffing issues at Western State Hospital – in fact, this proposal would close down two entire wards – and fails to make the investments needed to build a strong community system into the future.
- Missing opportunities to invest in public health, and to safeguard against proposed federal cuts. As the federal government considers cutting back federal support for health care, it is alarming to see leaders in our state Senate propose underinvestment in our public health system and health benefits for state workers. The budget also threatens the health insurance coverage for tens of thousands of home care workers who support our vulnerable seniors and people with disabilities.
- Threatening health care innovation reforms that are part of the Washington State Medicaid Transformation Project. This initiative is designed to help Washingtonians achieve better health outcomes, to reward high-quality care, and to curb health care costs in the state Medicaid program. The Senate’s budget would create a roadblock to continuing this initiative and to receiving the $1.5 billion in federal funds it was slated to receive.
- Reducing investments in programs that are protecting our state’s air and water. The proposal fails to provide resources to adequately sustain work to clean Puget Sound, a clean-up project that is also facing a federal funding threat from the Trump administration’s proposed budget. And no state funding is provided to implement the Clean Air Rule, an effort by Inslee’s administration to reduce carbon pollution in our state. The proposal would also cut or fail to fund investments in restoring salmon and protecting habitat.
COMMUNITY DEVELOPMENT & TRUST
Good quality of life for Washingtonians includes safe communities to live in, access to beautiful parks and historical spaces, an open government that runs smoothly and efficiently, and the assurance of transparent and fair elections. This budget would undermine community development and trust by cutting current programs by $107 million, a 1.8 percent decrease from maintenance levels. The major changes include:
- Failing to invest in tens of thousands of front-line workers, like nurses, home care workers, child care workers, highway maintenance workers, and other public employees by rejecting collective bargaining agreements already negotiated (with the exception of corrections workers and Washington State Patrol troopers and lieutenants). It also exacerbates ongoing issues with recruitment and retention throughout state government by mandating indiscriminate layoffs at state agencies. This would make it nearly impossible for our state agencies to deliver high-quality, timely services to the public.
- Reducing resources for those who serve to uphold the law for all Washingtonians. Under this budget, state agencies that work to protect the legal rights of everyday citizens would see huge cuts. The Office of Civil Legal Aid would be cut by $10 million (36 percent) and the Office of the Attorney General, which represents our state in legal matters that benefit us all, such as lawsuits against the federal government, would be cut by $20 million (78 percent). The cuts to the Office of the Attorney General in ongoing funding would be temporarily replaced by shifting one-time resources from a lawsuit.
- Reducing state contributions to retirement systems for first responders. Contributions to retirement systems are reduced by $159 million (a 74 percent reduction from maintenance levels), largely because of a $109 million cut to retirement contributions for police and firefighters.
The state Senate Republican leaders take a page out of the book of Republicans in the other Washington – making deep cuts to the very investments that people throughout our state rely on, and across every area that we use to measure progress. It would be particularly stark for the people who are struggling to make ends meet. And it also includes a host of irresponsible and unsustainable financial stunts that add up to a budget that would collapse under its own weight.
A solid budget framework is the foundation for a strong economic future for Washington and its people. The Senate Republicans should rework their budget with an eye toward strengthening our state’s communities and the foundations that support them.
In the fall of 2015, Community Council of the Blue Mountain Region – in collaboration with Sherwood Trust, Walla Walla County Department of Community Health, and Blue Mountain Community Foundation – partnered with the Budget & Policy Center to launch a community-driven, results-focused process to create a more prosperous region. Now we are proud to release Building a Better Blue Mountain Region, a report summarizing this collaborative effort and highlighting a new, innovative way to support community-driven solutions.
The Blue Mountain Region includes Walla Walla and Columbia counties in Washington state and the northeastern part of Umatilla County in Oregon. It is home to a diverse and growing population and economy, and it is known for its higher education system, wineries, agriculture, and small-business community.
We used the Budget & Policy Center’s own Progress Index framework as a starting point for identifying local data that could tell a preliminary story about the region’s well-being. The story that emerged from the data revealed areas for improvement in the community as well as bright spots upon which to build. For example:
- The Blue Mountain Region ranks high for overall quality of life and has a strong healthcare infrastructure;
- Economic hardship is high throughout the region, especially among the Latino population, which is driving population growth;
- Among residents born outside of the United States, those who have obtained citizenship have greater economic security than residents who are non-citizens, and they have lower rates of economic hardship than their peers born in the United States; and
- Education outcomes – like kindergarten readiness, reading ability by the end of third grade, and high school graduation rates – vary considerably by race, ethnicity, and district/school, but many schools perform better than the state average on these important indicators, offering the opportunity to learn what is working for students.
Community Council and its partners used Budget & Policy Center data to hold two "data walks" – events where members of the community review and discuss what the data says about them – with Blue Mountain region residents. The attendees of these events were asked to discuss what the data in the infographics meant to them, answering the following questions: Does the data align with their understanding of the community? What conditions in the community explain why the data looks the way it does? How do residents want the story emerging from the data to change? And, what strengths does the community possess to change the story?
The conversations that took place during the data walks were dynamic and inspiring, giving Community Council insight into the ideas and aspirations of residents. It also gave the project partner organizations a better sense of the network of individuals and organizations they can tap into to achieve community-driven progress. [See pages 22-23 of the report for a summary of the data walk discussions.]
Thanks to feedback from the participants in the first data walk, project partners made the second data walk more accessible. It was held in the evening so people who work during the day could attend. A Spanish interpreter and bilingual materials were offered so more members of the Latino community could be part of the conversation. It also provided free childcare.
The partner organizations are now using the information gathered from the conversations at these two events in strategic planning efforts for the Blue Mountain region. With the data and the initial conversations as a guide, they plan to continue conversations with a growing network of residents to create a community-driven vision for the improvement of the well-being of the region and its people.
And at the Budget & Policy Center, this collaboration with our partners in eastern Washington marks a new way of doing our work. We recognize that data is much more powerful – and a better tool for developing and advancing effective public policies – when it is shaped by the stories of the people it represents. Building data walks and other community engagement tools into our research ensures that our analysis is informed by and accountable to the people and communities behind the numbers. They are the people and communities whose well-being we seek to ensure in our work to create a just, prosperous, and equitable Washington.
With too many hardworking people struggling to get by, state lawmakers must do more to support the investments needed for Washingtonians’ long-term economic security than they did in the recent state budget.
For an eye-opening look at the challenges our state faces, see the "Progress at a Glance" table below and, for more details, check out our full Progress Index .
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Ultimately, state budget writers this year missed significant opportunities to help build an economy where prosperity is widely shared. Their budget did not do enough to rectify the fact that today’s economy is providing gains to a relative handful of Washingtonians, as these statistics dramatically show:
- Nearly one quarter of all income in Washington state goes to the richest 1 percent – those with average annual incomes of $1.3 million. For perspective, the richest 1 percent held no more than 11 percent of all income during the height of middle-class prosperity from 1947 to 1979.
- Between 2009 and 2012, during the recovery from the Great Recession, all income gains went to the richest Washingtonians. The remaining 99 percent saw their income decline.
- Median household income declined by $4,000 between 2008 and 2013, to $58,405 a year from $62,486.
- The share of Washingtonians who make too little to meet basic needs is rising, now encompassing nearly one-third of the population.
In addition to all this, Washington continues to have the nation’s most upside-down state tax system: as a percentage of what they make in a year, the lowest-paid Washingtonians pay up to seven times more in state and local taxes than the wealthiest 1 percent.
The disturbing situation these statistics describe should serve as a clarion call to lawmakers that investments need to be made to create affordable housing, connect workers to job training, keep children from going hungry, and in other ways promote opportunity and prosperity for all. Yet Washington state invests just 3 percent of its total operating revenue on ways to help Washingtonians maintain economic stability during an economic downturn or personal crisis.
Further, inadequate state support over the past five years has weakened the forms of assistance many Washingtonians need most. Temporary Assistance for Needy Families and Working Connections Child Care – critical tools to help families find or keep a job – serve significantly fewer children today than in 2008.
The recently adopted state budget did increase support in some key areas, like expanding early learning opportunities for all kids and providing a small increase in cash assistance to families struggling to get by. But those gains are severely threatened by the failure to enact enough new, sustainable revenue sources to protect long-term investments and economic security in the years to come. The adoption of a capital gains tax on the wealthiest Washingtonians in particular would have provided several million dollars a year to meet important needs and take a step toward making taxes more equitable.
This is Part 6 in our "Progress in Focus" series of blog posts highlighting the individual sections of the Progress Index. To read our additional recommendations for how to support a thriving Washington economy, visit the Economic Security section of our Progress Index. See our previous posts:
This is Part 3 in our "Progress in Focus" series of blog posts highlighting the individual sections of the Progress Index. This post is focused on Good Jobs.
by Lori Pfingst, Research and Policy Director, and Kim Justice, Senior Budget Analyst
The cornerstone of a strong middle class is an abundance of well-paying jobs that allow workers to meet their basic needs and to get ahead. Lawmakers have opportunities to strengthen the middle class in Washington state right now. They can do this by increasing their investment in workers and their families. But this is dependent on whether lawmakers have the foresight to raise new revenue.
According to our Progress Index, Washington state has a lot going for it when it comes to jobs. Our state is nationally recognized for having one of the highest shares of science, technology, engineering, and math (STEM) jobs (15 percent). With high median incomes, STEM jobs ($77,698) and STEM-related jobs ($68,984) are critical to the overall health of Washington state's middle class.
But while the share of STEM jobs is relatively high compared to other states, the vast majority (85 percent) of jobs in Washington state pay far lower median wages ($45,574). In fact, the largest non-STEM job categories are retail sales, cashiers, and food service. And they all have median annual incomes below $25,000 – well below what it takes to meet basic needs in most places in the state.
The trend toward lower-wage work has been happening for some time. Indeed, wages for low- and middle-income workers have been stagnant for nearly four decades (see "At a Glance" table for a summary; and see the full Progress Index to review all the data we use to measure progress). Meanwhile, on the other side of the recession, all the income gains have gone to the richest 1 percent. In addition, investments in the kinds of things that workers need to do their jobs well – child care for their kids, after-school programs, a reliable bus system – have steadily declined or grown stagnant as well. This limits the potential of our state to create good jobs and produce a competitive 21st century workforce.
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Proposed Budget Investments
As they negotiate their budgets in Olympia, lawmakers can make a range of investments that would improve the economic security of workers and strengthen the potential of our workforce over time. Education – from early learning through higher education – has dominated the budget negotiations thus far. Lawmakers are keenly aware that these investments play a critical role in workforce development and the creation of good jobs, especially those in high-wage, high-skilled STEM occupations. But investing in education alone is not enough.
Good jobs and productive workers would benefit from a range of policies currently under consideration. Lawmakers should raise additional revenue to fund not only education, but also all of the other investments Washington state's workers and economy need to thrive. Just a few of the policies that would lead to a healthier workforce in our state include:
- Approving collective bargaining agreements with workers who provide essential public services: Our public servants play a key role in our state. They protect children from abuse and neglect, care for seniors and people with disabilities, and provide services to college students, among many other things. They should be adequately compensated for the important work they do for Washingtonians. Last summer, workers who collectively bargain with the state reached an agreement with the Governor that would result in their first raise since 2008. The House budget funds this wage increase – 3 percent in 2015 and 1.8 percent in 2016 with an additional 0.8 percent or $20 per month, depending on the employee’s salary. The Senate, however, undermines the collective bargaining process, attempting to impose watered-down wage increases of a flat $1,000 increase in each year of the biennium – which is far below the rate of inflation. The Senate also proposes to strip home-care workers of the retirement benefit they negotiated, and it would cut health benefits to retired state employees who receive Medicare.
- Retaining and attracting the best teachers for students. Although voters approved Initiative 732 in 2000 to provide Cost-of-Living-Adjustments (COLAs) to teachers, those increases have been suspended by the Legislature in eight out of the past 14 years. For the first time since 2008, COLAs would be provided under both budget proposals – an increase of 1.8 percent in the 2015-16 school year and 1.3 percent in the 2016-17 school year. Reinstating and increasing the COLA is important to attract and retain high-quality teachers for our kids. It also addresses the overall funding deficiencies in our K-12 public schools and helps meets the requirements under McCleary. The House budget invests an extra $150 million for an added boost to align the teacher COLA with the wage increase received by state employees. It also invests $200 million to align teachers' benefits with that of state employees.
- Keeping families secure while parents find work. The Temporary Assistance for Needy Families (TANF) program helps parents who are seeking employment find work while also ensuring that they can provide the basics for their families. Stabilizing families during times of transition produces better outcomes for children and our economy. Yet funding for the program has eroded in the last few years, despite increased financial hardship during the recession. The House budget begins to restore some help to families by increasing funding for TANF by $18 million, including investments to provide housing for homeless families on TANF. The Senate's budget would further erode TANF by stripping $40 million from services, like housing assistance and utility supports (see table).
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It takes investments to prepare a competitive workforce, create good jobs, and help workers get ahead. Additional resources are necessary. That's why it's vital that lawmakers adopt new source of revenue through a capital gains tax and by closing tax breaks, as the House budget proposes. Without such investments, we are likely to continue to see an increasing trend toward low-wage work. Which brings with it an increase in the number of people falling behind and struggling to make ends meet – or worse, falling into poverty. As the richest Washingtonians continue to be the only ones benefiting from income gains, this disparity is simply unconscionable.
To read our additional recommendations for how to improve our state’s jobs market, visit the Good Jobs section of our Progress Index. Stay tuned for "Progress in Focus" blog posts on the other sections of our Progress Index.
Progress Index spotlights need for greater investment in schools, health care, and other foundations of a thriving economy
The foundations required for a strong economy in Washington state are cracking. On more than half of almost 100 measures of progress – from employment opportunities for our residents to the education of future generations – we are stalled or going backward. If our state is to reverse this trend, our government must invest more widely in the programs and services that promote a thriving economy and shared prosperity among all our residents. Those are the primary findings of our newly released Progress Index.
The Index shows how budget and policy decisions impact the lives and well-being of Washingtonians – decisions that will be highlighted as the state House and Senate release their proposed budgets in the coming weeks.
The Index further shows that our state’s funding priorities have gotten out of whack in recent decades, largely because of a broken revenue system and significant cuts to essential public programs and services. Since 2008, state investments have fallen in several critical areas, including:
- Education – Spending on education has declined by 14 percent ($1.3 billion) and has affected the entire education system – from early learning through higher education. Throughout this time, there has been stalled progress on preparedness for kindergarten and preschool enrollment; a persistent achievement gap for students of color that’s evident by the third grade; and the second-largest tuition increase in the nation at four-year colleges.
- Economic security – Spending on programs that help Washingtonians meet basic needs has declined by 58 percent ($281 million). During the same time period, the share of people who do not have enough income to adequately provide for their families has risen to nearly one-third of all Washingtonians. And an increased number of school children have become homeless.
These cuts hurt all Washingtonians, and especially people of color, who do not have equal access to opportunity. Their measures of progress in many critical areas trail those of their peers, which is detrimental to our collective future.
Yet there are areas, like our increased use of renewable energy and the uptick in people earning community college degrees, where our state is making steady improvement – and it can continue to do so if we invest wisely. The Progress Index offers many strategies that policymakers can adopt to ensure that they are supporting overall progress in our state. These strategies include: expanding successful programs like the State Need Grant and College Bound Scholarship program; adopting the proposed cap-and-trade system to reduce pollution and increase revenue; and requiring companies that receive tax breaks to meet minimum standards for state job creation.
The extensive data and analysis presented in the Progress Index can be used to inform policymakers’ decisions as they craft the budget. The Index can also shape initiatives to help communities secure the resources they need to thrive. Ultimately, it can be a map of where we are as a state and it can help us understand how our state budget can better support the well-being of our families, children, businesses, and communities.
The goal? For Washington state to be a place where progress is a given for every single one of us.
Read the full Progress Index:
In the coming weeks, the Budget & Policy Center will also release a series of schmudget blog posts highlighting and analyzing the findings from each section of the Progress Index.
• Leigh Sims, Team Soapbox Communications, 206-528-2550, ext. 7
• Melinda Young-Flynn, Washington State Budget & Policy Center, 206-262-0973, ext. 223