state budget

As he prepares to begin a third term in office, Washington Gov. Jay Inslee is proposing a new tax on health care premiums to fund post-pandemic public health. He’s also once again urging the Legislature to pass a capital gains tax.

The tax measures are contained in Inslee’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.

In a move not seen since the Great Recession, Washington Gov. Jay Inslee on Wednesday canceled pay raises for some state employees and ordered furloughs for many more through at least this fall. The move came the same day a new state revenue forecast projected an $8.8 billion drop in tax collections over the next three years.

As the state of Washington grapples with the economic fallout from the COVID-19 pandemic, lawmakers are bracing for a bleak revenue forecast on June 17 that could portend a $10 billion drop in state tax collections over the next three years.

Already, a preliminary forecast in May predicted state revenues would crater by $7 billion over that same time period. The official forecast is likely to be worse. The state’s current two-year budget is approximately $53 billion.

“We know that we are faced with a big problem over the next few years,” said David Schumacher, the governor’s budget director, in a recent call with reporters.

As Washington Gov. Jay Inslee exerts his emergency powers to battle COVID-19, behind the scenes legislative leaders are exploring the idea of a special session of the Legislature, perhaps as early as next month. 

“We are very much deeply in the weeds on trying to figure that out and I think in the next week or two we should have some more clarity,” said Senate Majority Leader Andy Billig, a Spokane Democrat.

In anticipation of state revenues cratering because of the COVID-19 pandemic, Washington Gov. Jay Inslee on Friday vetoed more than $200 million of new spending from the supplemental budget passed by state lawmakers last month.

Among the bigger ticket items Inslee eliminated was more than $100 million to hire 370 more school guidance counselors statewide and $35 million for para-educator training.

Washington Senate Democrats on Friday proposed a capital gains tax that would fund a suite of tax reductions for low-income families, small businesses and senior citizen homeowners. The tax proposal was rolled out in conjunction with the Senate Democrats' unveiling of a $52 billion two-year state spending plan, which followed a House Democratic budget presentation earlier in the week.