Housing, homelessness and behavioral health top Inslee’s budget priorities for 2023–25

Governor Jay Inslee
Washington State Governor's Office
9 min readDec 14, 2022


Gov. Jay Inslee released his 2023–25 budget proposals today, urging legislators to continue prioritizing investments in housing, homelessness, and behavioral health with urgency and audacity. His budgets also outline updated plans for climate, salmon recovery, education, public safety, state workforce, and more.

Housing referendum will front-load funding so we can build more, faster

At the heart of Inslee’s housing proposal is a referendum that will allow legislators to front-load $4 billion of housing construction over the next six years.

The underlying capital budget will fund approximately 2,200 housing units in 2023–25. The $4 billion referendum would add approximately 5,300 units additional units during that time, and 19,000 in the following three biennia.

“Unfortunately, we no longer have the influx of federal funding we are using today to quickly build thousands of new supportive housing units for people experiencing homelessness,” Inslee said. “I don’t want to lose momentum, and I don’t want the problem to get worse because we aren’t moving fast enough.”

The referendum would allow the state to issue bonds outside Washington’s debt limit. It requires approval by legislators and voters.

Washington state’s 2022 Point in Time Count indicates nearly 13,000 people are living unsheltered throughout Washington state, up from 10,506 in 2020. This follows a trend of skyrocketing housing prices and not enough housing supply.

A graphic with bullet points describing the rising cost and shrinking supply of housing is increasing homelessness. In 2021, the state had a housing deficit of 81,400 units.
The rising cost and shrinking supply of housing is increasing homelessness.

“Our traditional systems for funding housing take an incremental approach, but if there was ever a time we need to move faster, it’s now,” Inslee said. “Homelessness and housing shortages are burdening every community in Washington. We can’t wait decades to build, we need housing now or the numbers of people sliding into homelessness will grow.”

Inslee proposes using the referendum funding to address several housing gaps:

· Emergency supportive housing for people experiencing homelessness, such as those being built as part of the state’s Right of Way Safety Initiative.

· Housing for people with special needs such as developmental disabilities or chronic mental illness.

· Community capacity for behavioral health, including a new diversion and recovery center for people with behavioral health needs and criminal justice involvement.

· Affordable housing units for lower- and middle-income workers making less than 80% average median income.

· Down payment and closing cost assistance for low-income, first-time homebuyers.

A graphic showing examples of proposed housing investments to maintain shelters, continue the Right of Way Safety Initiative, build multifamily housing, and assist low-income and first-time homebuyers.
Proposed housing investments will advance the Right of Way Safety Initiative, maintain shelters, provide housing for people with developmental disabilities, and assist low-income and first-time homebuyers.

The referendum proposal is in addition to a series of housing proposals Inslee has previewed in recent weeks to increase density near transit corridors and streamline the permitting process to speed up housing projects.

A graph showing that federal funds accelerated housing construction, and that referendum funding would allow the state to sustain housing construction at a faster pace.
Recent federal funds have allowed the state to fund housing and shelter programs. Referendum funding would sustain a faster pace of housing construction.

Behavioral health priorities include intensive services for youth and competency restoration reforms

Last week, Inslee previewed his behavioral health agenda during a visit to the site of a behavioral health teaching hospital being constructed at the University of Washington. The hospital is one part of a multi-year plan the governor and legislators launched in 2018 to transform Washington’s behavioral health system and build up a network of specialized care facilities across Washington.

Despite thousands of new beds becoming available for patients, demand for services and care is outpacing the state’s progress. Inslee urged lawmakers to maintain full funding for planned facilities. He also signaled reforms are needed to address the skyrocketing number of referrals for in-jail competency evaluation and restoration services. Court orders for competency services have increased by nearly 60% since 2018, and inpatient referrals have increased 145% since 2013.

A graph showing that statewide court orders for DSHS competency services have increased by 60% since 2018, and that the rate of increase has accelerated recently.
Court orders for competency services have increased by nearly 60% since 2018, and the rate of increase has suddenly accelerated.

“The exponential growth in court orders and forensic referrals is not sustainable, even with the state’s huge new investments in facilities, staffing, and programs,” Inslee said. “I will be asking local leaders to join me in crafting a plan that better ensures more people get the care they need and preserves forensic services for people who need to remain in custody for the safety of themselves and the community.”

Inslee’s proposed budget would:

  • Continue full funding for planned facilities, including the new 350-bed forensic hospital at Western State Hospital and new state-run facilities in Maple Lane, Clark County, and Stanwood. Continue expansion of non-state operated facilities, increase bed day rates, and establish a new acuity-based rate that addresses services for harder-to-place patients.
  • Respond to increased demand for forensic beds at Western State Hospital by contracting with two behavioral health hospitals and a treatment center, and expand early treatment, diversion and intervention services that will free up beds at forensic facilities.
  • Strengthen specialized community services and substance use treatment. This includes expanding the 9–8–8 program’s mobile crisis teams as well as specialty care for people with specific needs such as traumatic brain injury or dementia. Funds from the State v. McKesson Corp. lawsuit settlement will provide more than $60 million for various opioid and fentanyl prevention and treatment services.
  • Build on recent investment for intensive services for youth, including the Children’s Long-Term Inpatient Program (CLIP), additional navigator resources for families, and a pilot project with Seattle Children’s Hospital and Providence of Spokane that provides intensive outpatient and partial hospitalization services.
  • Support behavioral health workers with improved compensation rates, more training opportunities, additional safety measures at state hospitals, and modern technology such as electronic health records.

Budget takes prudent approach to implementing top priorities as economic uncertainties loom

Though state revenues remain healthy, economists remain leery about the prospect of a recession or economic slowdown. State revenues have increased, but so have costs resulting from inflation and demand for state services.

Federal pandemic funding is also winding down. Legislators used more than $14 billion of federal funding to help businesses, local governments, hospitals and families manage the impacts of COVID-19. Inslee’s proposed operating budget will direct remaining federal pandemic funds towards emergency housing, food programs, public health, and special education.

Inslee’s budget does not contain any general tax or fee increases. It leaves $2.6 billion in total reserves.

Beyond housing, homelessness and behavioral health, Inslee’s proposed budget continues services that have been helping working families, helps state agencies adapt to changing and competitive workforce conditions, and implements crucial climate, natural resource, education, and public safety priorities.

Workforce challenges

Like many public and private employers across the country, Washington state agencies are grappling with workforce challenges. Sectors such as behavioral health and transportation have been facing shortages for the past several years. The state’s 24/7 institutions, such as psychiatric hospitals and developmental disabilities facilities, are facing especially difficult challenges. This is impacting the ability of state agencies to reliably provide crucial services.

A number of factors affect the state’s workforce challenges but exit surveys show compensation and pay was the reason most often cited for leaving state government.

The governor’s budget proposal includes funding for collectively bargained provisions:

  • Most state employees will receive a 4% general wage increase in 2023, and 3% in 2024.
  • Some agencies negotiated larger increases for hard-to-retain positions, such as state ferry workers.
  • A $1000 incentive payment for employees who receive COVID-19 booster vaccines.

The governor’s budget also provides funding to support training, certification or other workplace safety and support efforts aimed at improving recruitment and retention for hard-to-fill positions.

Climate and salmon

In recent years, Washington enacted a comprehensive suite of policies to transition to clean, affordable energy and fight climate change. This includes requirements for 100% clean electricity, cleaner fuels, more efficient buildings and a cap-and-invest program that includes strong environmental justice and worker provisions.

Now, the focus is on implementing these policies. In the 2023 legislative session, the governor will request legislation and funding to:

  • Effectively site and permit clean energy and transmission infrastructure that ensures Washingtonians can power their homes, vehicles and businesses with 100% clean electricity.
  • Plan for livable, resilient communities with clean transportation and affordable housing options.
  • Mobilize a workforce and create a Climate Corps service program to build our clean-energy and climate-resilient future.
  • Establish a new Institute for Northwest Energy Futures at Washington State University’s Tri-Cities campus that will research new and emerging energy technologies and systems.
  • Improve indoor air quality and comfort in homes using energy efficiency and HVAC upgrades.
  • Reduce diesel emissions by electrifying medium- and heavy-duty vehicles.

Much of this work is funded by the Climate Commitment Act passed in 2021, which is expected to generate at least $1.7 billion over the next two years. The CCA directs numerous other climate and clean energy investments with significant resources directed to benefit tribes and overburdened communities. The CCA has also transformed the state’s ability to develop clean transportation options and infrastructure.

The governor is also proposing the strongest suite of budget and policy initiatives in Washington’s history to protect and restore salmon habitat and salmon populations. His budget includes funding to promote the highest priority actions in the governor’s Salmon Strategy that also align with known tribal priorities and regional salmon recovery plans:

  • Protect and restore riparian habitat.
  • Invest in clean water for salmon and people.
  • Correct fish passage barriers and restore salmon access to historical habitat.
  • Protect and manage our state’s waters.
  • Align harvest, hatcheries and hydropower with salmon recovery.
  • Address predation and food web issues for salmon.

Examples of funding in the governor’s budget include:

  • Outreach, education, and coordination efforts for riparian restoration.
  • A new voluntary riparian grant program with enhanced landowner assistance to emphasize and encourage riparian protection and recovery statewide.
  • Investments to reduce and monitor toxins in stormwater, improve infrastructure to reduce and treat stormwater runoff, and support good wastewater management.
  • Addressing the toxic chemical 6PPD-quinone, created when a commonly used chemical in tires interacts with ozone.
  • Integrated and collaborative watershed planning and projects that support communities, agriculture, and our natural environment.


From early learning to college and career training, Inslee’s budget continues investing in high-priority areas that help students and families be successful. Examples include:

Early learning. As of December 2020, there were more than 33,500 children eligible for the state’s highly successful early childhood program but only 16,278 slots. Inslee’s budget adds 2,000 slots per year and increases the rate paid to providers by 40% to help with operation costs and retention and recruitment of staff. The budget also makes permanent the one-time subsidy rate increase for the Working Connections Child Care program that was funded in 2022.

K-12. To support educators, Inslee’s proposed budget expands mentoring for beginning teachers and also expands residency programs for teachers planning to specialize in special education, dual language or working in high-poverty districts. Funding is provided to expand teacher academies in high schools to help recruit a more diverse population of candidates to the profession and provide work experience at the same time.

Inslee’s proposal continues enhanced funding totaling $313 million for social-emotional and learning supports that enables schools to hire nurses, social workers, counselors and other intensive supports for students. Additional funding is proposed to provide all students access to outdoor learning experiences.

The governor also proposes more than $120 million for special education services and support, including additional funding for young students ages 3 to 5 years old.

Higher education and workforce. To help offset rising costs at the state’s colleges and universities, the governor’s budget increases the state’s share of higher education funding at 2- and 4-year institutions to at least 66% for four-year institutions. He also expands funding for Career and College Pathways Innovation Challenge Program and Career Connect Washington, two successful programs that partner with employers and industry leaders to connect thousands of students to career training opportunities.

The governor’s budget also prioritizes health care workforce training. It expands community and technical college slots for nursing students by 400 over the next four years, doubles the capacity of the new nursing program at Eastern Washington University, and establishes a public health degree program at WSU’s Pullman, Spokane and Vancouver campuses.

Economic support for working families

Washington’s job market remains strong but the economic recovery has been uneven and many families continue to grapple with inflation. The governor’s budget continues or adds funding for several programs that provide direct relief or support to lower-income households including:

  • The Working Families Tax Credit passed in 2021. Applications open February 1. About 400,000 households will be able to receive a check or direct deposit for up to $1,200.
  • Utility assistance for low-income households and assessments for possible cooling and heating system upgrades.
  • Subsidies to support access to Cascade Care, which includes public option health plans that result in health plans with $10/month or less premiums.
  • Cash benefits that help more than 9,000 families a month with diaper costs.
  • Broadband infrastructure to work towards the goal of universal broadband access throughout Washington by 2024, and digital equity programs that help connect the 280,000 Washington households without internet access to devices, subscriptions and digital skills.
  • A two-year expansion to the Economic Security for All program to provide employment and education supports that are helping move people out of poverty.

Detailed budget and policy information

Inslee has recently previewed several other priorities for the session, including proposals to expand law enforcement training capacity and to strengthen access and support for reproductive services. Complete budget highlights for these topics and all other issue areas are available from the Office of Financial Management.



Governor Jay Inslee
Washington State Governor's Office

Governor of Washington state. Writing about innovation, jobs, education, clean energy & my grandkids. Building a WA that works for everyone.