Governor, State Superintendent of Public Instruction call for tax increases.

February 3, 2014

Governor Jay Inslee last week proposed to spend an additional $600 million on K-12 education over the next three years by ending a number of tax breaks that are currently in effect. The targeted tax exemptions include a use-tax break on waste fuels from refineries; sales taxes on bottled water; a sales-tax break for out of state shoppers; a tax break on used-car trade-ins worth over $10,000; a sales-tax break for janitorial services; and a preferential business tax rate for resellers of prescription drugs.

Last year, a proposal that would also have ended selected tax preferences passed the House by 52 to 40 with no Republican votes. HB 2034 would have repealed the bottled water sales-tax break, eliminated the preferential business and occupation (B&O) tax rate for travel agents and tour operators, eliminated the preferential B&O tax rate for resellers of prescription drugs, ended the high technology sales- and use-tax deferral program, and narrowed the use-tax exemption for extracted fuels. The bill received no action in the Senate and was returned to the House at the end of the 2013 session. It is currently in the House Finance Committee.  

State Superintendent of Public Instruction Randy Dorn recently unveiled a bill that calls for increases in state sales and property taxes to direct more money to schools. His bill would raise the sales-tax by one percentage point to 7.5%, beginning July 1, 2018, and the portion of the state property tax that funds basic education would be raised to $3.60 per thousand dollars of valuation, the maximum allowed by law.

Dorn’s bill would also prohibit using local levies for basic education costs, such as student transportation, materials, supplies and operating costs, or for the salaries of school and district staff. Local levies could still be used for supplemental programs, such as compensating staff for extracurricular activities like coaching. 

According to the Superintendent’s office, the bill could increase funding for basic education by $7.5 billion in the 2019-21 budget cycle, on top of current funding levels. Inslee’s proposal would add $200 million to the education budget this year, spending $130 million on school district administration and $74 million on a 1.3 percent pay increase for teachers and other school employees. The state pay raise would be in addition to pay raises provided by local tax levies.

The legislature increased education spending sharply in the most recent budget cycle. The bi-partisan budget that passed last year put an additional $1.0 billion into education without tax increases, and both Democratic and Republican leaders said it is doubtful that the increase proposed by the Governor could pass this year.

House Majority leader Rep. Pat Sullivan (D- Covington) said it’s too early to say whether Inslee’s $200 million proposal is realistic this year. Senate Ways and Means Chairman Andy Hill (R- Redmond) said that more funding for schools is needed, but he questioned whether it needs to be done this year in the short 60-day session. While both the Governor and Superintendent Dorn propose ambitious tax and spending proposals, their enactment during the current short session appears unlikely.

Comments

McCleary and Taxes

I don't see how it is constitutional for the State Supreme Court to force a tax increase, which is what will ultimately be required to meet the financial requirements they set in the ruling.

Paramount duty

Todd, this bothered me too, until I read Article IX, section 1 and the McCleary rulings.

The meat of McCleary is that education should be funded before other statutory spending. It hasn't been and this is what the numbers are all about.

If the legislature had amply funded education, all of the increases in taxes woud be for non-education spending and while the legislature argues over those, the kids will be in school, financially covered.

The 2013-15 budget increased by $8.2 billion over 2011-13, so the money was there. The legislature allocated $5.7 billion more to Other Human Services, DSHS, Natural Resources, and Transportation alone. Some of that $5.7 billion surely could have been applied to education, especially the $200 million Inslee now seeks.

For too long, the politicians have funded other items at the expense of education, being secure in the knowledge that pleas to increase taxes for education would typically generate suffcient support for the increases.

Here is what the courts declared:

"It declared that, in the context of Article IX, section 1, "paramount" means the State must "amply provide for the education of all Washington children as the State's first and highest priority before any other State programs or operations."

"Article IX, section 1 confers on children in Washington a positive constitutional right to an amply funded education." - Washington State Supreme Court, McCleary v. State of Washington

"Washington law recognizes that the education duty specified in Article IX, section 1 is the only duty that is the State's paramount duty. As the Washington State Supreme Court has held: "Careful examination of our constitution reveals that the framers declared only once in the entire document that a specified function was the State's paramount duty. That singular declaration is found in Constitution Article IX, section 1. Undoubtedly, the imperative wording is intentional. - Seattle School District v. State, 90 Wn.2d at 510-11."

"Washington law holds that Article IX, section 1 imposes an affirmative, judicially enforceable duty upon the State. The Washington Supreme Court has thus held that Article IX, section 1 "is mandatory and imposes a judicially enforceable affirmative duty" upon the State"

"The Washington Supreme Court has accordingly held that the Respondent State must fully comply with Article IX, section 1 as its "first priority".

"During the trial, the State cross-examined many of the Petitioners' education witnesses as too whether they would prioritize education at the expense of other worthy causes and services, such as health care, nutrition services, and transportation needs. But this is not the prerogative of these witnesses - or even of the Legislature - that decision has been mandated by our State Constitution. The State must make basic education funding its top legislative priority."

"The Washington Supreme Court has accordingly interpreted the word "paramount" in Article IX, section 1 as follows: "Paramount" is not a mere synonym of "important." Rather, it means superior in rank above all others, chief, preeminent, supreme, and in fact dominant.... When a thing is said to be paramount, it can only mean that it is more important than all other things concerned. Indeed, as Judge Robert Doran opined, "[f]unding of the education program required by Article IX, Sections 1 and 2, must be provided as a first priority before any statutory program is funded."