OLYMPIA — Washington House and Senate Democrats on Saturday afternoon inked a deal on a new, two-year state operating budget that spends roughly $59 billion that boosts public health, child care and mental health programs amid the COVID-19 pandemic.

That number doesn’t even include the billions in federal coronavirus aid that the budget agreement spends across a host of programs that would chart a recovery from the pandemic’s health and economic impacts.

With a combination of federal aid, rebounding tax collections and a new 7% tax on capital gains on sale of some assets above $250,000, the new budget boosts spending across the board.

Now, legislators in the Democratic-controlled House and Senate are tasked with passing the budget and its related bills, including the capital gains tax, before the legislative session’s scheduled end Sunday.

Washington’s operating budget is the state’s primary spending blueprint. It funds K-12 schools and higher education, parks and prisons, and mental health, foster care and other social service programs.

The increased spending includes $261 million to implement a long-stalled tax credit for low income families. It also provides $50 million to expand subsidized health care premiums for qualified people enrolled in plans through the state Health Benefit Exchange.


And the new deal spends $147 million on Washington’s long-underfunded state and local public health systems.

Much of the new spending is focused on assisting with the public health and economic response to the pandemic, which Democrats have made a priority.

On that front, the new budget allocates federal aid dollars in the amounts of:

  • $1.7 billion to help reopen Washington’s K-12 schools and address learning loss
  • $1.1 billion for the deployment of vaccines, testing and contact tracing and recruitment of public health workers
  • $658 million for rental assistance
  • $528 million for child care programs
  • $500 million for unemployment insurance relief to employers hit hard by COVID-19 restrictions
  • $340 million in pandemic assistance for residents who can’t get help through other programs due to their citizenship status
  • $201 million to help small businesses through various programs
  • $190 million for assistance to prevent housing foreclosures

Elsewhere in the budget, funding is provided to establish Juneteenth as a paid holiday for state workers and to create an independent office to investigate uses of deadly force by law enforcement.

It spends $130 million on increased forest-health programs and wildfire-fighting capabilities for the state Department of Natural Resources.

And the deal earmarks $74.2 million to help counties resentence individuals and refund legal financial obligations in the wake of the state Supreme Court’s ruling that struck down Washington’s felony drug-possession law.


The new budget — which was negotiated behind closed doors by House and Senate Democrats — also provides $517 million in federal and state funds for new behavioral-health funding. That includes new dollars for six additional youth mobile crisis teams around the state, and higher payment rates for care providers.

The mental health funding also schedules dollars to make sure the University of Washington’s new behavioral-health teaching hospital is ready to operate once it is built in the coming years.

The new budget also spend some existing budget reserves. By the end of the 2021-23 budget cycle, the state would have $1.2 billion in reserve accounts.