Inslee unveils Washington budget proposal with taxes on capital gains and health insurers to fund COVID-19 recovery

OLYMPIA — Gov. Jay Inslee on Thursday unveiled his proposed state budget plan with new taxes on capital gains and health insurers to fund government through the coronavirus pandemic without reducing services.

The governor’s new proposed 2021-23 state operating budget would spend $57.6 billion, with a focus on boosting public health spending amid a pandemic and the ensuing restrictions that have shuttered businesses and schools and caused an economic downturn.

“This is for our state to attack the multiple crises that we have, associated with the COVID pandemic,” said Inslee in a news conference. “And this is a budget that is built on giving Washington state relief and recovery and resilience.”

The proposal includes $397 million to pay for testing supplies, personal

protective equipment, lab costs, epidemiology work, vaccine distribution and funding for Washington’s public health system.

There’s $400 million in new education funding to address learning loss and educational opportunity gaps amid the pandemic. That component comes as 15% of Washington’s K-12 students are getting any in-person schooling right now, and the governor Wednesday announced new, less-stringent public health metrics intended to spur more school districts to reopen with in-person instruction.

Inslee’s proposal would, among other things, include additional funding for Washington’s mental health system as part of a broader overhaul.

While the overall plan aims to begin funding tax-credit payments to low-income families — a program created in 2008 shortly before the Great Recession but never funded — in the near future, those payments wouldn’t start in the 2021-23 budget cycle.

The governor’s spending blueprint would also accelerate projects in the state’s capital construction budget — such as at community colleges and for court-ordered fixes of fish passages under roadways — in an effort to boost the economy.

Sen. David Frockt, D-Seattle, praised that approach in a statement as “a bold framework.”

“Investing in construction, infrastructure, and much-needed housing and behavioral health can provide a crucial tool for our recovery from the COVID-19 recession and help create a more equitable Washington,” Frockt, lead Democratic senator working on the capital budget, said in prepared remarks.

Republicans, who are in the minority in the state House and Senate, took a dim view of the budget package.

“I think by and large this budget doesn’t do as much as it should for working families, who are struggling through this year and really anxious about what the future holds,” said Rep. Drew Stokesbary, R-Auburn.

Stokesbary called on Democratic lawmakers to fund the Working Families Tax Rebate program in this coming budget cycle.