Any time we propose to change the Constitution, we should do so with a great deal of caution. However, this particular change is a good idea. The Constitution prohibits the state from having equity investments. The concern is real that government money would be used to specifically provide financial support for specific businesses and perhaps even manipulate them.
But since the time when our Constitution was written, there have been a few situations where the funds that the state held were allowed to be invested in stocks and bonds. These investments are not overseen by the Legislature, but by a board. This is not a matter of the Legislature playing the stock market – the investments will be held in a portfolio, much like your 401(k), pension, or retirement funds are invested. We already do this with state funds that are held for state public pensions. You can find more about how this works at this link – https://www.sib.wa.gov/wsib_story.pdf. As the material at this link points out, the return is much greater than what we can get if the Treasurer holds the funds. The Treasurer’s average is 2.0% and the investment board returns are much higher.
The money in question would be a single fund – the fund that pays for the new Long Term Care Program. In 2019, the Democrats introduced and passed several substantial taxes. One was the Long Term Care Program, a program that will start taking money out of everyone’s paycheck starting in January of 2022. It was a terrible bill for many reasons, but they were able to pass it because they held a majority in the Legislature.
However bad the bill was, we have to live with the program, and the state will take the money to fund it. The question remains – how will those funds will be invested? Unfortunately, when the bill was passed, the amount they settled upon to remove from your paycheck was based on the state being able to gain a 5.3% return on investments. That won’t happen if the funds are held by the Treasurer. If we do not allow for investments to gain a greater return, the state will have no choice but to raise taxes later to fulfill their commitment. As you can see, it’s common sense to vote “Approved” on this one. It won’t raise your taxes, and in fact, it could save you from future increases.
Here is a link to the bill report that explains what the legislation does – https://app.leg.wa.gov/billsummary?BillNumber=8212…Here is a link to a newsletter, written by Senator John Braun, that explains the bill. It is very similar to the information I have here, but there are footnotes. https://bit.ly/2HURPEJ