Washington voters will be asked this fall to amend the state constitution to allow the state’s long-term care program, WA Cares Fund, to invest its funds in the stock market.
The Washington State Legislature has put a measure on the November 4 ballot to change the current investment rules for the WA Cares Fund. The proposal would allow the state to invest the fund’s assets in a way similar to how the state’s pension and retirement funds are managed. Any earnings would be reinvested into the program.
Currently, Washington’s constitution prohibits public funds from being invested in private company stocks. Instead, the state is limited to safer, fixed-income investments like government bonds and certificates of deposit. Senate Joint Resolution 8201, which passed with broad support in both the Senate and House, seeks to add the WA Cares Fund to the list of funds exempt from this restriction, alongside the state’s pension funds.
Background
A similar proposal was rejected by voters in 2020, with 54.4% voting against it. The 2020 measure saw support in only three counties: Jefferson, King, and Whatcom.
Since then, the WA Cares program has matured. Payroll taxes began in mid-2023 at a rate of 0.58% of paychecks. By July 2026, eligible workers will be able to access the program’s benefits, a one-time lifetime payment of $36,500 that will increase with inflation in future years.
As of December 31, 2024, the WA Cares Fund held total assets of $1.64 billion, which are currently invested by the Washington State Investment Board under existing guidelines for public funds.
Arguments For and Against
Senate Minority Leader John Braun, a Centralia Republican, sponsored both the 2020 and current measures. He argues that the political climate has changed significantly since 2020. In particular, he notes that the 2020 opposition to the program was fueled by uncertainty during the pandemic, and public resistance to mandatory participation in the program has since faded. A 2023 vote rejected an initiative that would have made participation voluntary.
Braun believes that allowing the WA Cares Fund to invest like the state’s pension funds would lead to higher returns, which could result in lower premiums and more benefits for participants. The state’s pension system assumes a 7% return on invested funds, a level set by the Pension Funding Council in 2023.
On the other hand, Senator Bob Hasegawa, a Democrat from Seattle, has remained a vocal opponent of the proposal. He co-wrote the argument against the 2020 measure, citing concerns about the stability of the fund being jeopardized by stock market fluctuations. Hasegawa continues to favor safer investments, like municipal bonds, which could support public works projects instead.
Support for the Measure
Supporters of the amendment, including a coalition called We Care For WA Cares, argue that investing in the stock market could lead to greater financial stability and higher returns. The coalition includes groups such as the Washington State Nurses Association, AARP Washington, and SEIU 775, a union representing caregivers. They are optimistic about the potential for improved fiscal health for the WA Cares program, which they believe will benefit the state’s long-term care system.
“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.
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