For state lawmakers, it is the equivalent of having a fleet of armored cars back up to the Legislative Building and drop off their bounty. Updated revenue projections indicate that about $1.3 billion more than expected will fill the state coffers through 2021, including $647 million by June 2019.
While any unexpected windfall can lead to a temptation for exorbitant spending, legislators must take a prudent approach to budgeting for the increased revenue. That must include a plan for meeting the state’s obligation to fully fund K-12 public education, as spelled out in the state Supreme Court’s 2012 decision in McCleary v. Washington.
Last year, lawmakers devised a plan to add a statewide property tax to help fund education. The Supreme Court, which has retained jurisdiction over the case, approved of the measure with one caveat — it unconstitutionally delayed full funding for teacher’s salaries until 2019. Since then, legislators have sought a plan to provide that funding by the end of this year, a task that requires about $1 billion.
Which means the latest revenue projections are akin to manna. Senate Democrats this week unveiled a proposal to put that money toward teacher’s salaries, property-tax relief, and areas such as mental health, health care, and higher education. “We’re living within our means and we’re returning taxes to Washingtonians at a time when economic growth is extraordinarily good,” said Sen. Christine Rolfes, D-Bainbridge Island, the chief Senate budget writer.
While the proposal will require vetting and compromise, it appears to succeed on several levels. First, it deals with the need for completing the McCleary mandate. Second, it provides property-tax reductions in a year that residents are facing a double hit. Finally, it allows lawmakers an alternative to a proposal from Gov. Jay Inslee for funding schools.
In a budget recommendation announced late last year, the governor advocated using state reserve funds for teacher’s salaries, then backfilling that fund through a new carbon tax. A tax on carbon might or might not be a worthy idea, but tying it to the need for school funding is a misguided backdoor approach. Any carbon tax proposal should be debated and considered on its own merits, not as a necessity to meet a court-ordered mandate that legislators should have dealt with years ago.
In finally devising a school-funding plan last year, lawmakers loaded up a double-whammy for taxpayers. Eventually, the state property tax will be offset by reductions in school levies for individual districts. But those reductions will begin in 2019, while the state tax begins this year. Senate Democrats propose using the additional projected revenue to reduce the statewide property tax by 31 cents per $1,000 in assessed value. While the amount of relief can be debated, this year’s one-time double hit requires a break for property owners.
In that regard, the unanticipated windfall might save lawmakers from themselves. Last year’s McCleary fix failed by delaying funding for teacher’s salaries and by doubling down on property-tax levies. The extra burden is scheduled to last only one year, but that does not make it any less painful for property owners.
In the long run, Washington taxes are in need of reform. Judged by experts to have one of the most — perhaps the most — regressive tax systems in the nation, changes are required to ensure continuing adequate investment in the state’s people and schools. But for now, the delivery of a windfall can be put to good use.
