After session marked by pandemic, Washington Legislature adjourns with final passage of $59 billion budget

OLYMPIA – When the final gavel fell in the 2021 Washington State Legislature on Sunday evening, the capitol campus was quiet.

No lobbyists roamed the halls, no reporters looked for final comments. Only a handful of lawmakers were on the floor. The rest were represented by small Zoom squares on a large flat-screen TV in the corner of each chamber.

A mostly remote session brought new challenges for legislators who virtually came to Olympia in January with hefty goals in mind: set the state up for economic recovery after the COVID-19 pandemic, assist with response to the public health emergency, reform policing and fight a changing climate.

After final passage of a $59.2 billion two-year budget on Sunday, lawmakers adjourned until January. The budget passed 57-40 on party lines in the House of Representatives and 27-22 in the Senate where all Republicans and one Democrat, Sen. Mark Mullet of Issaquah, opposed it. It will head to Gov. Jay Inslee’s desk for his signature.

The final weekend of the session saw quick passage of many long-awaited Democratic proposals: a capital gains tax, a slew of police accountability measures, two major climate proposals and an overhaul of the state’s drug laws.

During the budget debate, Senate Majority Leader Andy Billig, D-Spokane, said the Legislature had a choice in January: to do the minimum and leave as quickly as they could or “rise to the occasion with a robust response.”

“We chose to meet the moment,” he said.

Many of the proposals, however, were met with stiff opposition from Republicans who say the major policy changes were done during a session with little physical access for Washington residents. For the entirety of the session, COVID-19 protocols shut down the inside of the Legislative Building, and safety concerns following the Jan. 6 breach of the governor’s mansion gate put up a fence around the exterior of the campus. Throughout the session, Republicans pushed to reopen the campus.

“I do not believe it is any coincidence that so many controversial bills were able to pass this session with the public only participating in their state government virtually,” Sen. Shelly Short, R-Addy, said in a statement.

Lawmakers in the minority also expressed concerns with a lack of transparency from Democrats during the budget writing process. The final proposal was released one day before lawmakers had to vote on it.

The budget drains the state’s $1.8 billion “rainy day fund,” implements a new capital gains tax and uses $10 billion in federal stimulus funds, on top of $59.2 billion in state money. State spending for the next two years will focus on economic recovery from the pandemic, assist schools with reopening, expand public health services and improve the state’s wildfire capabilities.

The budget would allocate most of the federal stimulus funds on COVID-19 recovery, including $1 billion for vaccine distribution, $1 billion for housing assistance and $3.3 billion on K-12 education, to assist in reopening over the next two years.

The state would be left with about $1.1 billion in federal flexible funds to be used later. States have until the end of 2024 to spend them.

The final budget uses $415 million generated each year from a new 7% tax on the sale of capital gains.

The state would begin receiving that revenue in 2023, at which point it would fund expansion of child care priorities.

Sen. Lynda Wilson, R-Vancouver, said the budget proposal shows the differences between the two parties. “They are tax and spend,” she said. “We are save and invest.”

One million of the state’s rainy day fund would be moved to a new transition account to help with COVID-19 costs. It wouldn’t be spent right away but would be in a new account that wouldn’t necessarily have the same constitutional restraints as the rainy day fund, which requires support from three-fifths of lawmakers to be used.

In some cases, only a simple majority is required to drain the fund, such as if the employment growth for a fiscal year is less than 1%. This is how lawmakers are justified the decision to draw down the fund now, meaning they only needed a majority.

Democrats said it provides more flexibility for the future use of those funds, assuming they are needed to assist with post-pandemic recovery.

Top Republican on the House Appropriations Committee Drew Stokesbary, R-Auburn, called the maneuver “near unconstitutional.” He said he was “deeply concerned about the sustainability of the budget.”

The budget also allocates $130 million in the next two years for wildfire response and forest health. It sets aside around $147 million for foundational public health services for the next two years. It also funds the working families tax exemption, a rebate for low-income families that passed the Legislature in 2008 but had never been funded.Sen. Christine Rolfes, D-Kitsap County, said the budget is “more comprehensive than any in our state’s history.”

“Today, we show that this Legislature can work effectively for the people even in the midst of an emergency,” Rolfes said on the floor Sunday.

In a prepared video Sunday, Inslee congratulated lawmakers on their session.

“So many of these achievements were years in the making,” Inslee said. “It took the hard work, sweat and tears of many in this state to see these policies finally make it over the finish line.”

He said there is still much more to do, hinting at work on a new transportation package that could happen in the interim. If a deal is reached before January, lawmakers could call themselves back into special session.