Washington Voters Face Decision on WA Cares Tax Investment Proposal

Washington voters will soon determine the future of taxpayer dollars as they consider a significant amendment to the state constitution. On the ballot is Senate Joint Resolution 8201, which seeks to allow state investments of payroll taxes from the WA Cares program in the stock market. If approved, this measure would enable the Washington State Investment Board to manage these funds similarly to pension and retirement assets.

The WA Cares program, established by legislation in 2019, is funded through a payroll tax of 0.58% on most workers’ earnings. Starting in July 2026, eligible individuals can access a benefit amounting to $36,500, which will increase in future years to account for inflation. As of summer 2023, over $2.5 billion has been deposited in the Long Term Services and Supports Trust Account, which is currently restricted from investing in private stocks due to constitutional limitations.

Heather Weiner, a proponent of the amendment and a spokesperson for the Approve 8201 campaign, emphasized the potential benefits during a recent debate at the University of Washington. With the aim of generating higher returns, she noted that Washington’s pension funds have averaged annual returns of 8.9% since 1992, outpacing government bonds by several percentage points. Weiner reassured voters that the investment strategy would focus on “smart long-term investing” rather than high-risk trading.

Conversely, opposition has emerged from figures like State Senator Bob Hasegawa, who argues that the state’s fiduciary responsibility lies with the public. “No one is going to know when the economy or stock market crashes,” he stated, warning against deviating from prudent fiscal management practices. Hasegawa, alongside three Republican lawmakers, authored the voters’ pamphlet statement opposing the initiative.

The Washington Legislature voted overwhelmingly to place the amendment on the ballot, passing it with an 86-9 margin in the House and 42-7 in the Senate. If more than 50% of voters approve the measure, it will become law, allowing the WA Cares account to join the ranks of funds exempt from the state’s general prohibition against investing public money in private companies.

In a notable change from a previous attempt in 2020, Weiner highlighted that this year’s proposal mandates that any earnings from investments must be reinvested into the WA Cares Fund. This requirement aims to prevent lawmakers from diverting those funds for other budgetary needs, ensuring that the benefits remain focused on long-term care.

Support for the ballot measure includes endorsements from various organizations, such as the AARP, the Washington State Nurses Association, and the Washington State Council of Fire Fighters. The Service Employees International Union 775, which represents 55,000 long-term care workers across Washington, Montana, and Alaska, is funding the campaign, having raised and spent approximately $2.5 million to date—five times more than its previous effort in 2020.

As voters prepare to make their decision, both sides are advocating their positions, with statements available on the Washington Secretary of State’s website. This proposal represents a pivotal moment for the management of public funds in Washington, aiming to balance risk and return while safeguarding the future of long-term care for residents.