A ballot measure that would let the state make stock market investments with payroll taxes collected for Washington’s new long-term care program is a “no-brainer,” supporters said Friday.
Senate Joint Resolution 8201, if passed in November, would amend the state constitution to allow assets of the program, known as the WA Cares Fund, to be handled similarly to pension and retirement accounts.
That would lead to larger returns in the long run, ensuring premiums stay low and the program is sustainable, advocates said in a call with reporters Friday.
“I think this is just a no-brainer,” said Greg Markley, secretary treasurer of the Washington State Association of Firefighters. He’s also chair of the Washington State Investment Board, whose fiduciary responsibility is to manage retirement and public fund investments. He was not representing the board Friday.
A state lawmaker opposing the ballot measure says it amounts to “gambling in the stock market” with taxpayers’ dollars.
The state constitution generally bars investing public money in the stock of private companies and private equity firms. That means state and local governments are limited to fixed-income securities like government bonds and certificates of deposit that are less risky but with lower rates of returns.
Pension and retirement accounts are exempt from that prohibition. The resolution, if approved by voters, would add the Long-Term Services and Supports Trust account to the list of exempt funds.
Voters defeated a similar measure in 2020 by a margin of 54.4% to 45.6%.
WA Cares is funded with a 0.58% tax on the paychecks of most workers in Washington. Beginning in July 2026, those who qualify can begin accessing the program’s benefit, a lifetime amount of $36,500 — a sum that is set to rise in future years to account for inflation.
Collections by the state began in July 2023. A person pays as long as they are working in the state. Deductions stop if they retire, become unemployed or leave the workforce, and resume if the person returns to work. As of March, $2 billion in tax collections had been banked in the program’s trust fund.
Backers say the public better understands the long-term care program than it did five years ago.
And they hope in the coming weeks to make them aware that the Washington State Investment Board has been earning 7% or more on pension funds, a couple percentage points higher than its investments in government bonds. That difference will translate to a lot more dollars in the trust account for the program, they said.
Four state lawmakers — a Democrat and three Republicans — are leading the opposition. They’ve signed the opposition statement in the voter’s pamphlet that will be sent out statewide in October. It is online now.
They argue it would be “financial roulette” to put the money in “an unstable market.” Right now, “it’s safeguarded in secured investments like federal, state and municipal bonds which support our communities.”
Sen. Bob Hasegawa, D-Seattle, fought the measure five years ago. He’s doing it again now.
“It’s gambling in the stock market. It’s a breach of fiduciary responsibility when you put taxpayer dollars at risk,” he said Friday.
Hasegawa said investing in municipal bonds may earn a little less but it provides a broad public benefit by helping local governments carry out projects. “I have faith in the voters that they will make the right decision,” he said.
Gary Bruebaker, who served as the state’s chief investment officer for 19 years, said this debate “has gone on for decades, and will continue to go on. There are some people that are extremely conservative and they don’t want to take any risk at all.”
By not investing in equities, he said, you’re accepting a lower return than what that the taxpayers and the stakeholders in Washington deserve. While there is risk on a year to year basis, there’s less risk over a longer term with the state’s diversified portfolio, he said.
Approve 8201, the political committee campaigning for passage, had reported raising $220,476 as of Friday. All of it is from the Service Employees International Union 775 which represents 55,000 long-term care workers in Washington, Montana and Alaska.
There was no campaign committee raising money to oppose the measure as of Friday.
Statements from both sides, along with an explanation of the measure prepared by the attorney general’s office, can be found on the secretary of state website.
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