Two bold Washington state legislative proposals aimed at lifting low-income residents out of poverty toward a path of financial independence died last week in the Legislature, but advocates say there's still urgency — and momentum — to pass them next year.
One bill would have created so-called baby bonds for low-income children, while the other would have established a first-in-the-nation statewide guaranteed income pilot program for very low-income adults. Both failed to make it out of fiscal committees by the mandated deadline last week.
Once controversial policy ideas circulated in academic spaces, both concepts have gained popularity as ways to address long-standing wealth disparities, particularly during the economic shutdown caused by the COVID-19 pandemic.
Sponsors of the bills emphasized the policy ideas haven't been permanently killed. Lawmakers, state officials and community organizers say they will work to get the bills passed next year by continuing to advocate for them in the interim.
"Though the policy is not moving forward this session, we fully expect the momentum to continue forward as the need to address persistent poverty and a growing wealth gap will only deepen with each passing year," Washington state Treasurer Mike Pellicciotti said in a statement. Pellicciotti requested the "baby bonds" legislation.
House Bill 1045 would have created the Evergreen Basic Income Pilot Program, a statewide guaranteed income that would give no-strings-attached cash to very low-income adults each month for two years. The monthly payment would cover the fair market rent of a two-bedroom apartment in their area.
Rep. Liz Berry, D-Seattle, who sponsored the bill, said the failure to advance the legislation is a result of lawmakers tightening the budget and rejecting new costly programs in light of an uncertain economic forecast this year.
But the looming unsteady financial picture is also pressuring Washington residents, she said, adding that the urgency to pass such proposals is still there.
"We all know giving people cash with no strings attached works and the reason we know it works is because the federal government gave millions [in COVID-19 relief] and poverty fell to its lowest rate in decades," Berry said.
Local guaranteed income programs across the country have shown promising results, increasing recipients' monthly income, decreasing reliance on government assistance, reducing food insecurity, boosting employment and helping recipients to better weather unexpected expenses.
In Tacoma, organizers behind a recent guaranteed income pilot program found relatively small amounts of routine cash assistance can make "a big difference in the home, around the table, and in the neighborhoods that we serve together," according to the program's director, Abigail Lawson. Led by the city of Tacoma and local nonprofit United Way of Pierce County, the 12-month pilot concluded in December.
"We hope as we create local movement and gather local data, legislators will stay in tune and be open to innovative policies that address the root cause of economic insecurity," Lawson said.
Critics of guaranteed income programs argue the unrestricted payments discourage recipients from working or becoming self-sufficient, or that the benefits don't justify the price tag. Some supporters of the policy have also warned cash payments should not be viewed as a quick fix to solve systemic poverty and wealth disparity, or as a replacement for long-established government assistance programs like food stamps.
A 2022 state feasibility study estimated a two-year pilot in Washington state would cost between $65 million and $244 million.
"Getting it out of the policy committee [this session] is a huge deal, and now we have to figure out how to get this funding," Berry said. She hopes to secure a Senate sponsor for the bill ahead of next year's legislative session.
"I think it's all about socializing and mobilizing the concept to other members," Berry said. "The more and more people learn about [guaranteed basic income] the more people become fans."
House Bill 1094, which also did not make it out of a fiscal committee by last week's deadline, would have established a pool of money that every child born under the state's Medicaid program, Apple Health, could access as an adult.
The money, known as the Washingon Future Fund, could then be used to pay for higher education or trade school, to buy a home or to start a small business.
Roughly half of all children born in Washington, or about 40,000 children per year, are covered by Apple Health. About 57% of those are children of color.
Advocates of the fund describe it as a kind of nest egg that would help even the financial playing field by giving lower-income residents a chance to catch up to their wealthier peers.
Beyond the expense of running such a fund, opponents argue the "baby bonds" model disincentivizes saving money, and that young adults may mishandle their account.
The plan, which has bipartisan support, proposed a minimum of $4,000 be set aside for each eligible child to access when they're 18 to 35 years old. The program would cost about $150 million annually, according to state estimates, with the first investment coming from the general fund, the principal fund used to support the operation of the state.
While the bill that would establish the fund did not survive this year's session, a constitutional amendment that would allow state funds like the Washington Future Fund to be invested in private equities, similar to pension funds, is still advancing through the Legislature.
The amendment would allow the state to maximize returns from the fund — potentially as high as roughly $24,000 — if a recipient tapped into the account at age 25, or about $50,000 if they accessed the fund at age 35, according to state estimates.
If approved by lawmakers, the amendment could come before Washington state voters as early as this fall, according to Pellicciotti. The Legislature would still need to pass a separate bill establishing the Washington Future Fund to launch the program.
"The bipartisan constitutional amendment is an important step forward to empower the state to pursue more effective investment strategies oriented toward the long-term fight against poverty," Pellicciotti said.
