Voters in Washington will be asked this fall to let the state make stock market investments with payroll taxes collected for its long-term care program.
The Legislature has put a measure on the Nov. 4 ballot to 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. Any earnings would be plowed back into the program.
The state constitution generally bars investing public money in the stock of private companies. That means state and local governments are limited to fixed-income securities like government bonds and certificates of deposit that are less risky.
Senate Joint Resolution 8201, which passed 42-7 in the Senate and 86-9 in the House, would add the Long-Term Services and Supports Trust account to the list of funds exempt from that prohibition, alongside the state’s pension and retirement funds.
Voters defeated a similar measure in 2020, 54.4% to 45.6%. It passed in only three counties — Jefferson, King, and Whatcom.
Much has changed. For one thing, the program was new, collections of payroll tax hadn’t started and distribution of benefits was years away.
Since mid-2023, a 0.58% tax has been applied 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.
As of Dec. 31, 2024, the long-term care account had total assets of $1.64 billion, which are invested by the Washington State Investment Board in line with current guidelines for public money.
Senate Minority Leader John Braun, R-Centralia, the sponsor of the measure in 2020 and this year’s too, said the political environment is much different from five years ago.
Then, public opposition to the year-old program was strong and the pandemic stirred uncertainty about the stability of the stock market.
In November, voters defeated an initiative to make WA Cares participation voluntary rather than mandatory for workers, a move that would have effectively ended the program. Braun said that is an indication of a broader endorsement of the program.
He said supporters of the 2020 measure didn’t do a good enough job communicating that the Washington State Investment Board could produce higher earnings on WA Cares Fund assets that would translate into lower premiums and more benefits.
The state investment board uses a long-term, diversified investment strategy. There is a 7% return assumed on dollars invested through the state’s pension accounts, a level set by the Pension Funding Council in 2023.
“We’ll give them another chance and see what they think,” Braun said of voters.
Sen. Bob Hasegawa, D-Seattle, has been a steadfast opponent. He co-wrote the voter pamphlet argument against the measure in 2020 with Mike Padden, a Republican senator from Spokane Valley who retired from the Legislature last year.
Hasegawa said then that he didn’t want the long-term stability of the trust fund “gambled on by Wall Street.” His position hasn’t changed.
“Look at what’s happened to the stock market,” he said in April. It would be smarter to invest the money in municipal bonds to support public works projects of the local government, he said.
Supporters have formed a coalition, We Care For WA Cares, to make the case that the change will lead to higher investment earnings and greater fiscal stability. Coalition members include the Washington State Nurses Association, Washington Health Care Association, AARP Washington and SEIU 775, a union that represents caregivers.
“We are thrilled to see state lawmakers on both sides of the aisle working together to strengthen WA Cares,” said Cathy Knight, state director for the Washington Association of Area Agencies on Aging.
