Since 2023, new payroll tax in Washington has accumulated $2.5 billion dollars for the long-term care program WA Cares.
This November, voters will decide whether the state should be able to invest that money in the stock market.
Doing so would require amending the state constitution. That amendment is on the ballot this fall, the result of Senate Joint Resolution Number 8201.
KNKX recently spoke to Jerry Cornfield, who covers state government for the Washington State Standard, about what’s at stake.
Interview Highlights
What WA Cares does
WA Cares is the product of legislation that was six years ago, and it's an entitlement program. Folks pay for it through their payroll tax of about $25 a month for a salary of $50,000 a year. It creates a benefit, a lifetime cap, that starts off at $36,500. You'll be able to use that for certain things that help you at home — if you need grapple bars, maybe, or you need a wheelchair ramp, or you need in-home care that isn't covered by your insurance. It is really the nation's first full scale effort to help the state's workforce afford the rising cost of long-term care and services.
What the amendment's supporters say
The proponents are saying, "Look, we've got this money. It's a trust account. If you allow us to have a more diversified portfolio with the investments, we’ll be able to make more money on your money." And if they turn that $2.5 billion into a lot more billions going forward, then the premium won't have to go up, and there might even be a larger benefit available down the line.
One of the critical points that I've written about it — it's hard to remind folks — but the Washington State Investment Board handles these investments. Right now they're limited to what they can do with the money and this would give them more options of where they could do it. They can still invest in the low-earning bond market, but they could also do a mix, and they would determine that at public meetings.
On investing Washington's public money in the stock market
All of the public worker pension funds, they are, under the constitution, allowed to be invested in what would essentially be the stock market. The Washington State Investment Board has been earning, over a long period of time, over 7% — many years closer to 10%, and some years below. And so that allowed — for example, this year, legislators counting on that were able to then count on bringing in more money from the investments, and that freed up more general fund dollars away from paying into the pension fund and putting it into programs. So they make the same argument that the long-term trust account dollars would go up, and that would maintain low premiums going forward.
What opponents of the constitutional amendment say
Pretty simply: You're putting taxpayers' hard earned money into the stock market. Both Democrats like Sen. Bob Hasegawa of Seattle and Republicans like Rep. Peter Abbarno of Centralia have said, ‘Look, you can bet on the stock market with your own money. It's not our job as lawmakers to be betting on the stock market with other people's money.’
On support for the measure
Well, on the support side, it's pretty broad. You have unions. You've got the SEIU — which is the healthcare workers — is funding quite a bit of the campaign. But they have firefighters and they have retirees; teacher retiree organizations and former Investment Board leaders. They even have Gov. Bob Ferguson, a Democrat, and Senate Minority Leader John Braun, a Republican. They've signed the ballot statement that voters will see in the voters' pamphlet.
The opposition is not organized with a committee, they're not raising hundreds of thousands of dollars. It's lawmakers who just disagree with this principle of expanding the options of where the money can be invested.
Election Day is Nov. 4. Ballots must be postmarked by that day, or placed in a ballot drop box by 8 p.m. that evening.
