On Inside Olympia last month, Gov. Inslee talked about his budget proposals and said, “In fact, we’re actually doing a tax cut in this budget because it funds the working families tax credit. So 400,000 Washingtonians will get a tax cut starting February 1, if they apply for it.”

The governor isn’t referring to a new tax cut in his budget proposal. The working families tax credit (WFTC) was funded in the original 2021–23 biennial budget, after the 2021 passage of ESHB 1297. Although the remittances are set up in statute as sales tax refunds, the funding for the remittances is appropriated in the budget.

The 2021–23 budget appropriated $242.0 million for this purpose for FY 2023 (the first year remittances will be paid). The 2022 supplemental budget reduced the appropriation to $232.0 million, to reflect updated estimates of the program’s cost. Gov. Inslee’s 2023 supplemental proposal would reduce the appropriation for remittances to $228.0 million (again to reflect updated cost estimates).

Gov. Inslee’s 2023–25 budget proposal would appropriate $512.0 million for WFTC remittances in the biennium ($257.0 million in FY 2024 and $255.0 million in FY 2025). The proposal would also appropriate $396,000 for the Caseload Forecast Council to begin forecasting caseloads for the WFTC.

As part of the Department of Revenue’s (DOR) 2023–25 budget request, it suggested that instead of appropriating funds for the WFTC remittances, the state should treat the refunds as a revenue reduction. According to DOR, this would be “significantly easier and use less staff time to administer than if appropriated.” Gov. Inslee’s budget proposal would not make that change.

Meanwhile, Rep. Stokesbary has prefiled HB 1000, which would double the WFTC qualifying income level for people with children and double the remittance amounts for people with children.

Rep. Thai has prefiled HB 1075, which would change the age threshold for qualifying for the WFTC to anyone who is at least 18, as long as they meet the income and other eligibility requirements. (Currently, people must be at least 25 and under 65 to qualify, if they don’t have children.)

(Prior posts on the governor’s budget proposals are here.)