Gov. Jay Inslee’s smorgasbord of tax and spending ideas is breathtaking in its size but is a starting point for lawmakers to craft a reasonable and sustainable solution to fully fund education.
GOV. Jay Inslee’s bold budget plan proposes multiple choices for Washington state to finally resolve its education-funding crisis.
The breathtaking smorgasbord of tax-and-spend ideas Inslee unveiled last week outlines some interesting proposals as the Legislature begins crafting a reasonable and sustainable solution.
As lawmakers carve it down to size, and consider other alternatives, what must remain is ample, equitable funding for the state’s K-12 education system and fairness for taxpayers.
Most state lawmakers agree they must pay this overdue bill. There is still haggling over the bill’s size, but one of the biggest questions now is who should pay.
Inslee’s proposal puts the burden mostly on business through taxes on polluters and service companies, and on the wealthy through a capital-gains tax.
Most property owners, including homeowners and businesses, would see slight tax decreases as the state pays for public education costs that had been covered through local school district levies.
This is a new approach. A bipartisan proposal that had the most traction in the past few years had the state paying the portion of school funding that local taxpayers pay now. A Republican plan would have paid the difference by raising state property taxes, placing more of a burden on high property-value districts such as those in King County. A Democratic plan would have covered the difference with a capital-gains tax.
Lawmakers, including Republicans, have legitimate concerns about tax increases. The governor has produced his plan, and lawmakers on a task force have been meeting for months. The task now is to, finally, agree to a plan to fund public schools fairly and sustainably — and somewhere in there should be accountability to ensure that the money improves outcomes for too many students now being left behind.
Lawmakers should start by agreeing on a baseline of what’s needed to fully fund basic education, before they start wrestling over taxes.
Inslee proposed $3.9 billion in additional K-12 funding over the next biennium, to be funded largely through new taxes on carbon emissions, service businesses and capital gains.
His proposal rightly boosts starting salaries of teachers across the state, to ease the current shortage and attract and retain more people to the profession.
Whether $3.9 billion is precisely what’s needed for schools is being discussed by the legislative task force. Disappointingly, it won’t make recommendations until January, right before the Legislature convenes.
Still, there are signs of hope. Task force members aren’t showing their cards just yet but it sounds as if Republicans and Democrats aren’t too far apart on the K-12 price tag.
Additional spending in Inslee’s plan clearly needs scrutiny. The governor went big, calling for nearly $5 billion more in new spending over the state’s $41.9 billion base-level budget for the next biennium.
This includes important spending on mental-health programs, early-learning programs and a response to homelessness. Capital spending includes nearly $1 billion for school construction.
Inslee proposed three major tax increases. The largest would increase the state’s business and occupation tax on service providers from 1.5 to 2.5 percent, with a $100,000 filing threshold. It would raise $2.3 billion in the next biennium.
Also proposed is a carbon tax that would generate $2 billion a year after taking effect in 2018.
Inslee tried earlier to boost school funding this way. This time he’s serving it with pork in verde sauce; the proposal diverts $1 billion a year — half the carbon-tax proceeds — to special-interest projects. Legislators should discuss this carefully; perhaps they should instead build more schools.
A limited capital-gains tax — on gains above $25,000, with exemptions for retirement accounts, home sales and agriculture — would raise $821 million in fiscal 2019. For some Washingtonians, the burden of this tax might be offset by federal tax cuts proposed by Donald Trump.
Inslee is aiming high with an ambitious proposal to fully fund basic education. Now it’s time for the Legislature to make it better.