School levy reform is in the cards

The Washington Supreme Court took a symbolic step last week to coax the state Legislature closer to full funding of basic K-12 education. The message from the nine justices was firm, but tempered and necessary.

Lawmakers must end the state’s excessive reliance on local, voter-approved property tax levies that help pay for teacher salaries, health care and other costs of basic education.

The effect of levy disparities is real: Voters in wealthy districts find it easier to support schools, with some district levies providing more than 30 percent of the cost of education. Importantly this local money subsidizes teacher salaries, which can vary by well over $10,000 a year district to district.

To their credit, the justices issued fines of $100,000 per day for the Legislature as a whole until it completes a plan for full funding of basic education by 2018.

The fines are unprecedented and make clear that the Legislature is still violating the state Constitution by failing to fully fund basic education (an issue decided by the courts in a 1977 case involving Seattle schools and re-decided by the high court in 2012 in the McCleary case).

In handing down the fines, the court acknowledged what many lawmakers and Gov. Jay Inslee are touting as achievements – the provision of $2.8 billion in new K-12 education funding this year, of which $1.3 billion directly addressed the court’s ruling in the McCleary case.

But the fines are not punitive. They will accrue and ultimately be earmarked for education programs that the Legislature would pay for anyway. So it’s a restrained message sent by a frustrated judiciary. It looks like the nine justices don’t want to fan flames for a full-scale constitutional crisis with the legislative branch (we think critics who say the court is already overstepping its authority are wrong).

Prodding legislators to act is often like moving wet spaghetti by pushing it with one’s nose. It’s slow going; threats from judges cannot always move the noodles faster.

The only thing that motivated Senate Republicans and House Democrats to compromise on a $38 billion budget deal this year was their vivid legitimate fear of being blamed by voters for a state government shutdown, which would have ensued if they hadn’t acted before June 30.

So what to do next? Lawmakers of both parties have showed an interest in taking over K-12 employee compensation as a state responsibility, and both parties have proposals to do that.

However, the cost for salaries and benefits could run $3 billion in the 2017-19 budget cycle. It represents a more difficult task than writing a budget because it requires a ton of state dollars not expected to be in hand.

Senate Republicans, whose members tend to represent more rural and suburban districts that are considered property-tax poor, have suggested “levy reform” that would simply shift billions of dollars of locally collected levies onto the state’s shoulders by dramatically boosting the state’s share of the property tax and cutting the local voter’s share.

Such a policy would tend to shift more of the property tax burden for schools onto urban districts represented by Democrats, which the latter party has qualms about. And it could boost total property-tax collections by some $700 million a year, according to one GOP draft plan. Gov. Inslee opposed such a shift in his 2012 campaign because it would be a tax hike on some districts.

We’ve said for a long time that a modest capital gains tax on the state’s wealthiest individuals is one good step to create a new revenue stream for higher education or other state needs – and also to make our tax system, which lays a larger relative burden on those least able to pay, a little fairer.

Obviously a deal satisfactory to the court won’t happen overnight. But this is a good time to revive a serious effort to create a fair and adequate tax system so that a proposal is ready for a legislative vote in January, if not before.

This story was originally published August 18, 2015 at 5:01 PM with the headline "School levy reform is in the cards."