State wrestles with education mandate

Deficits worsen pressure of Supreme Court order

November 24, 2012

SEATTLE – Lawmakers are making their holiday school funding wish list and it’s a short one: please send cash.

They need the money to give every child free all-day kindergarten, to pay for bus service for about a million schoolchildren and to take the pressure off local tax levies that help pay for basic education.

A down payment on all of that will cost at least a billion dollars in the next biennium to answer the Supreme Court’s orders to pay for the Legislature’s own education reform plans by 2018.

The court’s January decision in the so-called McCleary case – that the state is not fulfilling its constitutional obligation to amply pay for basic public education – will shape nearly every action of the Legislature this year and for years to come.

The school funding lawsuit brought by a coalition of school districts, education and community groups as well as parents sought to force the government to fulfill its obligations to the state’s schools.

In the past decade, education spending has gone from close to 50 percent to just above 40 percent of the state budget, despite the fact that some education spending is protected by the constitution.

With the court decision hanging over them, lawmakers will face an even greater conundrum when they convene in January on how to pay for all those things while trying to fill yet another year of budget deficits.

State lawmakers have in recent years been dealing with large budget deficits, and earlier this year they cut $300 million in state funding.

They’ll face another deficit of at least $900 million in January, and state economic forecasters say yearly deficits should be expected to hang around for the foreseeable future.

A committee of lawmakers has been meeting since summer to discuss their options for responding to the ruling. The Joint Task Force on Education Funding basically has two choices: cut state spending or raise taxes or fees.

The long list of possible cuts include some options that are controversial. Those include cuts to the state higher education system, supervision of all parolees or preschool or health insurance for poor children.

“Most of this stuff is not going to happen. It just doesn’t make sense,” said Rep. Ross Hunter, D-Medina and the chair of the House Ways and Means Committee.

He acknowledged, however, that some of these ideas may end up in early budgets from the Legislature and the governor’s office to generate discussion.

Hunter has a few other ideas – like eliminating the three-strikes sentencing rule and releasing enough inmates to close a prison – but none would bring enough money into the state treasury this year to make a dent in the total estimate of at least $4 billion to pay for the reforms required in the McCleary decision.

He said Gov. Chris Gregoire is right: the Legislature isn’t going to find a way to fully fund basic education without new tax money.

Another way to potentially bring in more money while solving another of the court’s complaints is the “levy swap,” which Gov.-elect Jay Inslee criticized during the campaign as a tax increase.

The plan would replace some local property taxes with a statewide education property tax and essentially take tax money from property-rich taxpayers and distribute it to areas with schools in greater need.

As the idea was presented last year by Hunter, the levy swap would likely raise taxes on some homeowners, but it would also make the state property tax system fairer by distributing the cost for education more evenly.

The school finance committee is looking at a number of ways to increase state tax revenue, including increasing the state sales, property or business taxes or eliminating loopholes or starting a state income tax.

Inslee has said he expects an improved economy, combined with more efficient state government, would take care of most of the dollars needed to increase education spending.

Hunter said neither of the plans presented by the gubernatorial candidates is going to be enough to solve this year’s budget problems. “We’ve made most of the cuts that you can make. We’re facing an environment with very constrained choices,” he said.

Meanwhile, Gregoire is deep into her own budget process. She, not the Legislature and not Gov.-elect Inslee, will write the first draft of the budget for the 2013-’15 biennium.

Gregoire’s aides said she will address the McCleary question, but how she will do that is still being discussed, said the governor’s spokesman Cory Curtis and Ralph Thomas from the state Office of Financial Management.

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