Voters were giving the go-ahead Tuesday for the state to make stock market investments with payroll taxes collected for Washington’s new long-term care program.

A measure to amend the state constitution was passing by an overwhelming margin of 56.8% to 43.2%. Results will be updated as more votes are tallied.

If Tuesday’s results for Senate Joint Resolution 8201 hold, it will allow the Washington State Investment Board to legally handle assets of the WA Cares program in a similar manner as it does pension and retirement accounts. The fund had a balance of $2.9 billion on Sept. 30.

“Voters are sending a clear message to lawmakers that they support strengthening this essential benefit for seniors and people with disabilities,” said Ana Ascanio, manager for the Approve 8201 campaign.

Passing the measure will grow the long-term care fund by billions of dollars, help keep premiums low and create opportunities for the benefit to become more generous, she added.

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, treasury bills and certificates of deposit that are less risky and pay lower returns. The WA Cares account is now subject to this limitation.

Pension and retirement accounts are exempt from that prohibition. The ballot measure would add the Long-Term Services and Supports Trust account to the list of exempt funds. The state investment board, which uses a long-term, diversified investment strategy, could then decide if it wants to invest in private equity funds and buy stock of private companies, or not. 

Supporters argued that investing in the stock market would lead to larger returns in the long run, ensuring premiums stay low and the program is sustainable. They noted in the campaign that annual returns for pension funds have averaged 8.9% in the past three decades because of decisions by the state investment board.

Opponents argued it would be “financial roulette” and a breach of the state’s fiduciary responsibility because it would put taxpayer dollars at risk should the economy or market crash. They argued that investing in municipal bonds may earn less, but it provides a broad public benefit by helping local governments carry out projects.

Democratic Gov. Bob Ferguson and Senate Minority Leader John Braun, R-Centralia, backed the ballot measure.

Service Employees International Union 775, which represents 55,000 long-term care workers in Washington, Montana and Alaska, spent $2.5 million to pass it. That is five times more than it spent in 2020 when a similar measure lost by a margin of 54.4% to 45.6%. 

Last November, voters defeated a statewide initiative to make WA Cares participation voluntary rather than mandatory for workers. Braun said that was 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 could translate into lower premiums and more benefits.

This story is republished from the Washington State Standard, a nonprofit, nonpartisan news outlet that provides original reporting, analysis and commentary on Washington state government and politics.