A state policy response to COVID- 19s economic crisis: what can - PDF document

4/8/2020 A state policy response to COVID- 19’s economic crisis: what can lawmakers do? 1 2 1

4/8/2020 Agenda & Goals • Goal: learn about state fiscal situation in months ahead and solicit feedback about what we should prioritize in our advocacy • Agenda • Introductions • Federal response • What should we expect for the state? • Budget & Policy Center’s response • Feedback • Questions 3 State budget reflects values Budget investments by Budget & Policy Center Progress Index value area 2019-21 operating budget, enacted 4 2

4/8/2020 Source: Institute on Taxation and Economic Policy, average effective state and local tax rate by income group in 2018 5 Washington’s tax code exacerbates racial injustices Source: Institute on Taxation and Economic Policy; distribution of income groups by race/ethnicity in 2015 6 3

4/8/2020 Expansions to unemployment and cash assistance will help Washingtonians but will be inadequate The Federal CARES Act: • Bolsters our state unemployment benefits and expands eligibility • Provides one-time cash payment of $1,200 to many individuals earning less than $75,000, with an additional $500 per child. • Excludes ITIN filers in our state, other groups 7 Education-specific funding from CARES Act $30.75 billion nationally, $475 million for Washington state: • $213.6 million for k-12 • $202.5 million for higher education • $59.5 million for emergency education relief grants 8 4

4/8/2020 Federal aid to Washington will be dwarfed by revenue shortfalls • Washington will receive $3 billion (including education funds) from the CARES Act but this will run out quickly • Coming out of the Great Recession, WA state faced a $12 billion budget shortfall in 2009-2011 biennium • State and local revenues in Washington are largely reliant on sales taxes o Revenue will likely decline for months and years ahead 9 Gov. Inslee vetoed millions in new spending to mitigate economic downturn • Governor cut $445 million over the next three years • Threats to programs, agencies, and departments as well as rising costs due to bigger health and economic needs • Underscores the need to fix the regressive structure of our tax code 10 5

4/8/2020 Budget & Policy Center’s response • Preparing for the possibility of a special session and for the 2021 legislative session ahead • In the process of partner outreach and listening • Developing principles for state policymakers to address the crisis and mitigate the impact 11 Budget & Policy Center’s response Policy platform priorities to guide us through this health and economic crisis: • Basic needs • Cash assistance • Raising progressive revenue 12 6

4/8/2020 What else should we be prioritizing? ● How has COVID-19 affected your organizations? How has COVID-19 affected people you serve? ● What will your organizations be prioritizing next ● session or in a special session? How can Budget & Policy Center support your ● work? ● Other questions for us? 13 Thank you! Margaret Babayan , Policy Analyst Misha Werschkul , Executive Director margaretb@budgetandpolicy.org mishaw@budgetandpolicy.org 14 7