Vote ‘Yes’ to strengthen WA Cares Fund for elder, long-term care | Editorial
AI-generated summary reviewed by our newsroom.
- Vote yes on SJR 8201 to let WA Cares diversify investments for higher returns.
- Amending the state constitution lets the Investment Board add equities with bonds.
- Analysts predict diversification could yield $67B over 50 years without new worker taxes.
Last year, voters affirmed their support for WA Cares, the state’s long-term care program for seniors and people with disabilities. This year, they can make sure that the WA Cares is on a strong financial footing by voting for Senate Joint Resolution 8201.
WA Cares is still relatively new. Signed into law in 2019, it only started collecting money through a payroll deduction in 2023.
That money sits in the WA Cares Fund, which will provide financial assistance to qualified Washingtonians as they get older. The fund currently has more than $2 billion.
The problem is that the state constitution says that public funds like this may be invested only in the safest holdings like fixed-income bonds and certificates of deposit. With that restriction, projected long-term growth is only 4%. That growth rate probably will not keep up with inflation in the highly volatile health care and senior care sectors.
The solution is to change the constitution.
SJR 8201 would allow the independent, nonpartisan Washington State Investment Board, which oversees state funds, to put some money into stocks and other equities. Those tend to have higher rates of return.
There will be ups and downs, just as there are with any investment portfolio, but over time it’s a safe bet that the ups will outperform the downs so long as the Investment Board pursues a conservative strategy.
Most financial advisors recommend diversified portfolios. Stocks provide growth while bonds provide stability. Just stocks would be too aggressive, and just bonds too cautious. That’s why past constitutional amendments have allowed public pension funds and a fund for people with developmental disabilities to diversify their holdings.
If the WA Cares Fund could pursue that sort of investment strategy, analysts predict it would generate $67 billion over the next 50 years without costing workers an extra penny. That sort of investment income could protect the long-term solvency of the fund.
For these reasons, SJR 8201 received broad bipartisan support in the Legislature with the Senate voting 42-7 and the House 86-9. We recommend that voters approve it on the Nov. 4 general election ballot.