Details of the budget plan remained sketchy Thursday, but the proposal is expected to increase property taxes in school districts like Seattle, Bellevue and Lake Washington, Democratic lawmakers said.
OLYMPIA — A state budget agreement would boost public-school spending by $7.3 billion over the next four years, funded in part by a hike in the statewide property tax that goes to education.
Details of the plan remained sketchy Thursday, but the proposal is expected to increase property taxes in schools districts like Seattle, Bellevue and Lake Washington, Democratic lawmakers said.
“There are some winners and some losers with the property-tax proposal that’s in this budget,” said Sen. Kevin Ranker, D-Orcas Island, one of the budget negotiators.
Ranker said that rough numbers show the average Seattle household could pay more than $400 in additional property taxes each year.
The plan also keeps in place local property-tax levies but caps them beginning in 2019 at a lower level and requires they be used for programs that supplement basic education.
The local cap would mean total property taxes in some districts would decline.
The budget also boosts revenue by expanding the collection of online sales tax, according to Ranker. And two tax exemptions long targeted by Democrats — one on sales taxes on bottled water and another on fuel extraction that benefits oil companies — would be eliminated.
Legislators Thursday said they believe the sweeping plan will comply with the state Supreme Court’s 2012 McCleary decision, which said the state was failing to meet its constitutional requirement to fully fund the basic education system.
The court said the state has until Sept. 1, 2018, to do that, but a plan must be in place before the Legislature adjourns this year.
Chief GOP budget writer Sen. John Braun of Centralia called the budget deal “a good, solid budget and K-12 solution that basically brings equity to the state of Washington.”
Highlights of the McCleary agreement, released Thursday:
• A three-tier regional difference in how much the state provides for school employees, starting in the 2018-19 school year, based on housing costs.
• Existing teacher-salary schedule, based on seniority and education, to be eliminated.
• Beginning teachers would make at least $40,000. The maximum would be $90,000, although districts could pay more in areas with higher housing costs and for educators who teach science, technology, engineering and math or provide bilingual and special-education instruction.
• Increases to the amount of money provided for students who are below grade level, or are eligible for special-education or highly capable programs.
• Local levies for education are capped, starting in 2019, at $1.50 per $1,000 of assessed valuation, or $2,500 per pupil, whichever is lower.
• Initiative 1351, passed by voters in 2014, is kept on hold, with a work group assigned to recommend whether to phase in its class-size reductions and increased school staffing.
• Control of health benefits for all school employees would be moved from individual districts to the state.
Source: Senate Democratic Caucus and House Office of Program Research
But as legislators hurtled toward a Friday-night deadline to pass a budget and avoid an impending partial government shutdown, details about the compromise remained scant.
The budget bill itself, expected to be hundreds of pages long, may not be publicly available until Friday morning.
That would give the public — and the lawmakers who are voting — less than 24 hours to scour the deal’s fine print before it must be signed by Gov. Jay Inslee.
Sen. Christine Rolfes, D-Bainbridge Island and one of the key school-funding negotiators, hailed the K-12 agreement as “good public policy” and said “we’ve added a lot of money to the system.”
“It represents a truly bipartisan solution for how we move forward,” Rolfes added.
Legislators Thursday afternoon agreed to release some of the school-funding details. But there was little time for independent analysis of a deal that was negotiated behind closed doors.
As legislators and staff scrambled to assemble a budget bill, Inslee’s office asked state parks to stay open Friday, rather than prepare for a shutdown.
“Legislators have committed to the governor they will deliver a budget in time for him to sign before midnight Friday,” wrote David Postman, chief of staff to the governor.
The McCleary fix
Both Democrats and Republicans can claim significant victories in the final McCleary agreement released Thursday.
House Democrats wanted to preserve much of the existing school-finance system that drives money to local schools, largely based on staffing levels and class sizes. Republicans preferred to dismantle the system entirely, replacing it with a per-pupil model that offered districts more money depending on student need.
Neither got exactly what they wanted, but the staffing and class-size formulas remain — a win for Democrats. Republicans, meanwhile, effectively killed a statewide schedule that provided higher salary rates for teachers with more education and seniority.
Both sides also won with the elimination of a controversial, five-digit formula known as “staff mix” that many critics argued was one of the largest — if not the largest — drivers of inequity in Washington schools.
Now, starting with the 2018-19 school year, districts will get an average lump sum for each teacher.
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Eventually, by 2019-20, the state-salary allocation for teachers will increase from an average of about $54,062 now to $64,000 in 2019-20. Salary allocations for school administrators and support staff would reach $95,000 and $45,912, up from a current $61,752 and $33,299, respectively.
The state, however, will adjust those amounts based on regional housing costs and annual inflation rates. Every six years, beginning in 2023, the Legislature must reset the salary allocations to keep wages competitive.
As in current law, the agreement would allow districts to negotiate the actual salaries that they pay employees. But new restrictions would limit what they can bargain with local teachers union.
Beginning teachers, for example, could make no less than $40,000. They would receive a mandatory $4,000 pay increase after working for five years.
And districts could pay teachers no more than $90,000, unless they teach science, technology, engineering or math or provide bilingual and special-education instruction.
The agreement’s property-tax changes, first proposed by the Senate Republicans, are geared at helping the state pay for teacher and other school-worker salaries as required by the court. School districts now use local property-tax levies to cover a chunk of those costs.
While the state property-tax rate would rise, local property-tax levies would be capped at a lower rate.
Democrats had opposed an earlier GOP-proposed property-tax plan as putting too much pressure on homeowners, and for raising taxes around the Puget Sound region.
They had preferred a capital-gains tax or changes to the state’s business-and-occupation tax to raise more money for schools. But those proposals failed to gain traction.
“We as Democrats were willing to compromise on the revenue source, because in the end … the underlying budget meets our values,” Ranker said.
Rep. Matt Manweller, R-Ellensburg, said he thought the agreement would assure that local school districts don’t slide back to using local-levy dollars for basic education costs.
However, Sen. Reuven Carlyle, D-Seattle, slammed the idea of using the property-tax shift to fund education, instead of other approaches.
Carlyle said he planned to vote against the property-tax changes.
“It’s too high, too hard and too rough on middle-class folks,” Carlyle said.
Little time for review
Rank-and-file lawmakers who learned the details of the deal Thursday might not get any chance for input.
Overall, “The decisions are made,” said Rep. June Robinson, D-Everett, one of the budget negotiators. “What we’re waiting for now is staff to do all the work that needs to be done to balance everything.”
Robinson said she doesn’t anticipate a public hearing on the budget before it gets a floor vote. But citizens have had months to vet the ideas that went into the deal, she added, since it’s a combination of the Republican and Democratic plans passed earlier this year by the Senate and House, respectively.
“I feel like we were able to use public input to develop the final compromise budget,” she said. “I understand that other people might not feel that way.”
Carlyle expressed frustration with the lack of transparency.
“I don’t think there’s anybody in this Capitol who’s defending this,” said Carlyle, who as a representative used to chair the House Finance Committee, which handles tax policy.
“The numbers matter, the details matter, the real impacts for real people living real lives matter,” he added.
Sen. Jamie Pedersen, D-Seattle, agreed.
“I suspect there will be a bunch of things that are just errors and that we’re gonna have to fix in the supplemental, and hopefully they won’t screw up too many lives in the meantime,” Pedersen said.
Inslee’s office will also be pressed for time to review the compromise.
“It’s not ideal but our folks are digging on everything as soon as they get it,” Inslee spokeswoman Jaime Smith wrote in an email.