Politics & Government

State lawmakers set sights on school levy reform

State lawmakers unveiled dueling plans Wednesday to reduce the state’s reliance on local school district levies to pay for basic education costs, a problem the state Supreme Court has said is unconstitutional and must be solved.

All three proposals introduced Wednesday in the Legislature aim to satisfy part of the state Supreme Court’s 2012 decision in the McCleary case, in which the court said the state isn’t meeting its constitutional duty to fund Washington’s public school system.

One of the problems the court identified was that Washington’s school districts rely too heavily on local levies to pay for basic education costs — such as school supplies and teacher salaries — that should be covered by the state.

To address that issue, leaders of the Republican-controlled state Senate are proposing to lower the amount of property taxes that school districts can collect locally, while raising the state’s common schools levy by a commensurate amount.

Such a move would allow the state to take on the costs of school employee salaries and other basic education needs that are now being paid for unconstitutionally by local districts, said Sen. Bruce Dammeier, R-Puyallup, who is sponsoring Senate Bill 6109.

“It’s basically the state finally stepping up to its responsibility, after 30 years of ducking its responsibility,” said Dammeier, who presented the proposal to reporters Wednesday.

Dammeier’s plan, which would be phased in during the state’s 2017-19 budget cycle, would restrict the ability of teachers unions to bargain salaries with local districts, but simultaneously adjust the state’s funding of teacher salaries to cover the actual cost of hiring teachers in various regions of the state, he said.

The Republican plan would cap local school district levy rates at $1.25 per $1,000 of property value, while offsetting that decrease in local taxes by boosting the state’s common school levy by about $1.60 per $1,000 in assessed value.

Legislative staff estimated that the average local levy rate for school districts across the state is $2.64 per $1,000 in property value. The current state property tax is about $1.98 per $1,000, which would go up to $3.60 under Dammeier’s proposal.

Far fewer specifics were presented in the plan that House Democrats unveiled Wednesday.

The House proposal would set the same 2018 deadline as the Senate plan for implementing new teacher salary models and reducing the use of local levies, but differs in that it would let the Legislature decide the details along the way.

Rep. Ross Hunter, D-Medina, said he doesn’t think levy reform proposals that set specific levy caps, teacher salary models or statewide tax changes will have enough support to pass the Legislature this year.

“I would do a more ‘do it now’ approach, but you have to build consensus,” said Hunter, the sponsor of House Bill 2239. “And none of those (other) plans are going to build consensus, because no one’s going to understand all the decisions that were made in them.”

Hunter said the House Democrats’ plan sets up a schedule of “annual benchmarks” that the state Supreme Court can use to hold the Legislature accountable, even if lawmakers wait to make some decisions about taxes and compensation policy.

The bill would start by convening an education funding council this year to tell the Legislature how much local levy money is actually going to basic education programs, so the state knows how much it is on the hook for, he said.

A third plan to reform local property tax levies also emerged Wednesday, this one from minority Senate Democrats. Their plan would drive down local property tax collections by a set amount over time, but use a capital gains tax instead of a statewide property tax increase to cover the state’s increased share of education costs.

“It’s hopefully a fresh idea,” Sen. Jim Hargrove, D-Hoquiam, told reporters Wednesday.

The plan from Senate Democrats would levy a 7 percent tax on capital gains of more than $250,000 per individual or $500,000 per couple, while exempting home sales and retirement accounts.

Lawmakers’ 105-day session is scheduled to end April 26. They are under a court order not only to solve the issues surrounding local levies, but also to fully fund education reforms the Legislature has previously approved, such as reducing class sizes in kindergarten through third grade and expanding all-day kindergarten.

The Supreme Court held the state in contempt last year for the Legislature’s failure to provide a detailed plan for fully funding basic education by 2018, and has threatened to impose sanctions if lawmakers don’t do more this year.

Both the House and Senate have proposed two-year budgets that would spend at least $1.3 billion to address parts of the McCleary ruling, but prior to Wednesday neither had introduced plans to address the issue of local levies being used to cover the state’s school funding responsibilities.