Inslee budget is honest start to a long negotiation

Gov. Jay Inslee talks about his 2017-2019 budget proposal in the Governor's Conference Room at the Capitol in Olympia on Wednesday, Dec. 14, 2016.
Gov. Jay Inslee talks about his 2017-2019 budget proposal in the Governor's Conference Room at the Capitol in Olympia on Wednesday, Dec. 14, 2016. toverman@theolympian.com

Gov. Jay Inslee’s budget proposals released last week were much larger than state lawmakers are used to. But Inslee deserves credit for offering a serious attempt to complete the state’s full funding of K-12 public schools.

Fresh off an easy re-election win, Inslee is proposing an operating budget for 2017-19 that increases K-12 spending alone by $3.9 billion. This includes at least $2.7 billion to increase the state share of school staff salaries, which is the major challenge left in the McCleary school funding case.

The budget makes smaller investments in early learning, higher education, mental health treatment, the state government workforce and would restructure services for children, youths and families by clustering them in a new state agency.

Critics are wincing over the more than $4.4 billion in net new taxes Inslee’s plan requires. Included are a new tax on capital gains greater than $25,000 for individuals and a carbon tax on fossil fuels. One can argue about the 7.9 percent capital gains rates in his proposal, but it can make Washington’s tax code fairer. Inslee says it affects about 50,000 households even after exempting retirement income and sales of homes.

The Democratic governor’s carbon tax proposal does what failed Initiative 732 did not. I-732 risked a cut in revenues for schools; Inslee’s carbon tax adds dollars for K-12 schools. Other Inslee proposals put a sales tax on bottled water and boost business taxes in the services sector.

Inslee says his proposals give tax relief to 119 school districts — roughly 75 percent of property owners — which have been subsidizing public schools. Basically his plan uses new funds to replace local levies. In Olympia, the property tax reductions would translate to about $88 a year on a $200,000 home or business; the cut would be $124 for similar homes in the North Thurston school district and $70 in Tumwater.

Though expensive, Inslee’s budget and tax proposals are also honest. Harsh reactions from Senate-majority Republicans show that honest pricing is not all it’s cracked up to be.

The hard truth is that full funding of basic education is the state’s paramount duty under the Washington Constitution, and the governor’s plan finally provides one map for doing that.

The state Supreme Court has said at least twice — almost 40 years ago and again in 2012 in the McCleary case — that Washington’s heavy reliance on local levies to subsidize basic education is unconstitutional. Tax-rich districts can raise funds, but poorer districts often struggle to pass levies.

Besides the school investments, Inslee is calling for a major $300 million investment in small centers for those needing inpatient treatment for mental illnesses. The state has been in violation of federal court orders for its failure to adequately provide this care. Inslee also provides pay increases for public employees. Some level of raises is warranted.

Surely there are places in the budget that can be trimmed or scaled back. If there is a better source of new funds, lawmakers need to offer them up.

The less acceptable option is to wave a white flag on school funding or resort to budget gimmicks and cuts in safety-net programs.

The political hurdles in the way of higher taxes are as formidable as ever. The governor’s proposal for the 2017-19 budget cycle is just the opening of a conversation.

Good will is needed from all parties.