Washington House Democrats propose state budget aimed at easing housing crisis after COVID-19 pandemic

OLYMPIA — Washington House Democrats released a budget proposal Friday that focuses on preventing the state from sinking into an even deeper housing and homelessness crisis due to the COVID-19 pandemic.

The roughly $58 billion proposed 2021-23 state operating budget in some ways mirrors the proposal released a day earlier by Senate Democrats. It includes a proposed 7% tax on capital gains over $250,000, which has been opposed by Republican minorities in the Legislature. That is intended to fund a tax credit for low-income families, as well as child care.

And the Friday proposal by the House earmarks billions of dollars in federal COVID-19 relief aid to help the state recover from the pandemic.

But House Democrats in their plan emphasized a slew of different programs to prevent foreclosures and tenant evictions that could make Washington’s already-severe homelessness crisis even worse.

It budgets $920 million for rental assistance, which also would help landlords who haven’t been getting paid.

That would help as Washington lawmakers prepare for when the temporary moratorium on evictions is lifted and a slew of people could lose housing, adding to the pandemic’s economic devastation.

“We’re very concerned about the number of people who are precariously housed right now,” said Rep. Nicole Macri, D-Seattle, adding later: “Once the eviction moratorium goes away, eventually the rent is going to come due.”

“We can’t even respond to the number of people who are currently homeless across the state,” she said. “And the prospect of hundreds of thousands more people losing their homes, falling into homelessness, is something we would like to avoid.”

Roughly 136,300 Washington households, or 9.6% of renters, are behind on rent, according to a survey in late February by the U.S. Census Bureau.

The House budget proposal uses $166 million to help low-income homeowners who are behind on mortgage payments. There’s $80 million in aid for energy costs to low-income individuals.

And it puts $26.5 million toward the state’s Housing and Essential Needs (HEN) program, which assists low-income residents not able to work for at least 90 days who have been incapacitated because of a physical or mental health issue.

Currently, 1,700 people are eligible for HEN, but the state can’t afford to help them with housing support, said Macri, and the new money would fund that.

The legislation comes as state lawmakers are flush with billions of dollars in federal COVID-19 aid to help residents through the now yearlong pandemic.

On Thursday, Senate Democrats proposed a roughly $59 billion two-year budget. With the different structures of the two proposals, it’s difficult to compare them side by side.

But both are measurably larger than the $52.4 billion two-year budget when it was signed in 2019.

After a projected $8.8 billion budget shortfall last spring as tax revenues plummeted amid the pandemic restrictions, Washington’s tax collections have returned to pre-pandemic levels.

That has led Republicans to strongly protest a proposed tax on capital gains, which they call unconstitutional and a potential doorway to a broader personal income tax.

In a statement Friday on the House budget proposal, Rep. Drew Stokesbary, R-Auburn, slammed the capital gains proposal, saying “unemployment remains high and the state has not yet recovered roughly 200,000 of its pandemic-related job losses.”

“Our economic recovery will depend on private investors and entrepreneurs betting on Washington’s ingenuity and hard work,” said Stokesbary in prepared remarks. “However convenient of a political target they may be, taxing investments and innovators is a surefire way to hamper the state’s recovery.”

Gov. Jay Inslee in December unveiled his own two-year budget proposal. That $57.6 billion plan focuses on spending increases on public health and schools to aid the pandemic recovery, among other things.

With unified control in Olympia, Democrats will now negotiate a final budget agreement among themselves before the end of the scheduled legislative session in late April.