NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Friday, June 30th, 2017

State budget analysis roundup: NPI partners offer critiques based on what we know so far

Today is the final day of Wash­ing­ton State’s cur­rent fis­cal year. State law­mak­ers must either pass an oper­at­ing bud­get by the end of the day or find a way to buy them­selves more time to con­tin­ue ham­mer­ing out a bud­get (which most are loathe to do), or else state gov­ern­ment will have to shut down.

With details about the agree­ment reached by the Leg­is­la­ture’s major­i­ty cau­cus­es (the House Democ­rats and Sen­ate Repub­li­cans) final­ly avail­able, inter­est­ed cit­i­zens and orga­ni­za­tions can final­ly see the specifics of what’s being pro­posed. Here is a roundup of reac­tion offered by NPI’s part­ners based on what we know so far.

Wash­ing­ton’s Para­mount Duty:

While the leg­is­la­ture’s pro­posed edu­ca­tion fund­ing plan includes a sig­nif­i­cant increase in fund­ing for our pub­lic schools, it falls well short of what is required by the courts and the con­sti­tu­tion.

This deal runs a seri­ous risk of fail­ing to meet those require­ments, fail­ing to meet the press­ing needs in class­rooms across the state, and relies on unsta­ble fund­ing sources. If this deal pass­es, it may not mean the end of the McCleary case — this year, this decade, or this gen­er­a­tion.

In 2016 Wash­ing­ton’s Para­mount Duty esti­mat­ed the cost of ful­ly fund­ing pub­lic edu­ca­tion — specif­i­cal­ly, the basic edu­ca­tion promised by the leg­is­la­ture in 2009 in bills ESSB 2261 and 2776 — to be about $8 bil­lion a bien­ni­um. Legal coun­sel for the McCleary plain­tiffs esti­mat­ed the sum was $10 bil­lion a bien­ni­um, with at least $5.6 bil­lion need­ed just for the next school year alone in order to meet require­ments for mate­ri­als and oper­a­tions, teacher salaries, and small­er class sizes.

The deal leg­is­la­tors reached this week would pro­vide an extra $7.3 bil­lion over the next four years. This is less than half the mon­ey required to ful­fill the con­sti­tu­tion­al and court-enforced right to a ful­ly and amply fund­ed edu­ca­tion.

This deal also under­mines the vot­er-approved ini­tia­tive to reduce class sizes, pro­vid­ing that small­er class sizes would only become part of a basic edu­ca­tion require­ment if the leg­is­la­ture choos­es to fund it. This is cir­cu­lar log­ic, and flies in the face of evi­dence and com­mon sense that stu­dents learn bet­ter and have all their needs met when teach­ers can pro­vide more atten­tion to them in a class­room with few­er stu­dents.

We have already heard from par­ents and teach­ers across the state who are con­cerned that the sweep­ing changes to teacher pay would make it even more dif­fi­cult to attract and retain good teach­ers in our schools. Cap­ping teacher pay at $90,000, as well as the elim­i­na­tion of the “staff mix” mod­el and lim­its on bar­gain­ing, com­bine to lim­it the abil­i­ty of teach­ers to make a liv­ing and remain as res­i­dents of our own com­mu­ni­ties.

The McCleary case was nev­er about reforms to the way teach­ers are paid. We see no rea­son for these risky changes to be made, cer­tain­ly not with so much haste and so lit­tle pub­lic scruti­ny.

We are also trou­bled by the meth­ods used to pay for this half mea­sure. The Supreme Court held that edu­ca­tion fund­ing must be reg­u­lar and depend­able. A prop­er­ty tax increase does not meet that stan­dard, espe­cial­ly when the leg­is­la­ture main­tains a 1% cap in future years on prop­er­ty tax­es. This has the effect of erod­ing the prop­er­ty tax rev­enues that go to schools, mean­ing it’s no longer reg­u­lar or depend­able.

The leg­is­la­ture’s deci­sion to lim­it local levies is anoth­er risky move. If the leg­is­la­ture fails to ade­quate­ly fund basic edu­ca­tion, or if dis­tricts’ costs rise above what leg­is­la­tors are will­ing to pay, those dis­tricts will be fac­ing sig­nif­i­cant cuts, under­min­ing the intent of the McCleary deci­sion.

More impor­tant­ly, using the prop­er­ty tax to fund schools is regres­sive and hurts the poor and the work­ing fam­i­lies for whom a pub­lic edu­ca­tion is par­tic­u­lar­ly impor­tant. Many fam­i­lies will be unable to pay these costs, espe­cial­ly at a time when hous­ing costs in many Wash­ing­ton cities are ris­ing fast.

Wash­ing­ton State is home to some of the world’s rich­est indi­vid­u­als — and yet we have the most regres­sive tax sys­tem in the Unit­ed States. The leg­is­la­ture’s deci­sion to make poor peo­ple pay with­out ask­ing the rich or big busi­ness­es to pay more is uncon­scionable, par­tic­u­lar­ly when the same bud­get deal opens mil­lions in new tax breaks for busi­ness.

We under­stand that leg­is­la­tors are wor­ried about a gov­ern­ment shut­down. We are too. On the oth­er hand, it is hard to believe that avoid­ing a shut­down now is worth the price of con­tin­u­ing to under­fund our schools and make poor peo­ple pay more in hous­ing costs for years to come.

Stu­dents across Wash­ing­ton State are asked to attend schools that don’t have heat in the win­ter, that don’t have new text­books, that don’t have a full-time nurse on duty, that don’t have librar­i­ans or new books, or coun­selors to help guide them to col­lege or a career.

It’s not clear that this deal will ful­ly address these and oth­er urgent needs, par­tic­u­lar­ly since there are no pro­vi­sions for cap­i­tal expen­di­tures in this bud­get. We urge the leg­is­la­ture to urgent­ly address cap­i­tal require­ments for schools by pass­ing a bill that pro­vides the $2 bil­lion nec­es­sary to ensure chil­dren across Wash­ing­ton attend schools that are safe, secure and have the capac­i­ty to accom­mo­date the low­er class sizes that vot­ers have vot­ed for and that we know pro­vide a bet­ter learn­ing envi­ron­ment for all stu­dents.

Leg­is­la­tors may be exhaust­ed and tired after a few weeks of work. But par­ents are exhaust­ed and tired after years of unpaid work to plug the gaps in fund­ing for our under­fund­ed pub­lic schools caused by leg­is­la­tors’ dere­lic­tion of their duty. We call on leg­is­la­tors to reject this deal and fix it to address the issues we have iden­ti­fied above. If they pass this edu­ca­tion fund­ing plan, we will have no choice but to urge the Supreme Court to reject it and order the leg­is­la­ture to do bet­ter.

The Wash­ing­ton Bud­get & Pol­i­cy Cen­ter:

Leg­isla­tive lead­ers have agreed to a spend­ing plan to fund state ser­vices for the next two years – and as such, they may avoid a state shut­down – but they have left a lot of impor­tant work undone. Notably, law­mak­ers have passed up an his­toric oppor­tu­ni­ty to address our state’s bro­ken tax code, and instead have relied too much on unsus­tain­able fund trans­fers and bud­get gim­micks that will threat­en the eco­nom­ic strength of the state in the future.

The bud­get deal includes some invest­ments in crit­i­cal pro­grams, but it falls short of mean­ing­ful­ly strength­en­ing many of the state’s most impor­tant long-term invest­ments.

Instead of cre­at­ing a bud­get that enacts much-need­ed rev­enue reform, law­mak­ers have cob­bled togeth­er a bud­get that makes progress toward ful­fill­ing a man­date from the state Supreme Court to strength­en our K‑12 schools. But the final bud­get agree­ment does this by rely­ing too heav­i­ly on irre­spon­si­ble account­ing tricks, like draw­ing down the state rainy day fund and shift­ing funds between accounts, that will leave the state on shaky ground in future years.

Law­mak­ers pro­pose to raise new resources for schools with a small increase in the state prop­er­ty tax. But it is dis­ap­point­ing that no actions were tak­en to off­set high­er prop­er­ty tax bills for low­er- and mid­dle-income home­own­ers and renters who, under our cur­rent tax code, pay up to sev­en times more in state and local tax­es as a share of their incomes than the rich­est Wash­ing­to­ni­ans.

In addi­tion to the prop­er­ty tax changes, law­mak­ers agreed to elim­i­nate waste­ful tax breaks – includ­ing the bot­tled water sales tax exemp­tion and a sales tax break for oil refiner­ies – and close off legal loop­holes that allow out-of-state busi­ness­es to avoid pay­ing sales tax­es and busi­ness tax­es. But they also added or extend­ed 13 oth­er tax breaks that will take mon­ey out of com­mu­ni­ties in favor of spe­cial inter­ests and leave few­er resources for future invest­ments. Now is the time to clean up the tax code to clear out waste­ful tax breaks, not add more.

Cen­tral to leg­is­la­tors’ bud­get nego­ti­a­tions was com­pli­ance with the state Supreme Court’s order to fund pub­lic schools by the end of this leg­isla­tive ses­sion. The school fund­ing plan includ­ed in the final bud­get deal over­hauls the state’s teacher pay sys­tem and will invest an addi­tion­al $7.3 bil­lion in pub­lic schools over the next four years. It remains to be seen whether the com­pro­mise will be suf­fi­cient to sat­is­fy the court’s order to amply fund pub­lic edu­ca­tion.

It appears that severe cuts to many impor­tant pri­or­i­ties that improve the lives of Wash­ing­to­ni­ans with low incomes may have been large­ly avoid­ed. If so, that’s a good start. How­ev­er, the deal doesn’t do enough to strength­en many of the pro­grams that allow peo­ple with mid­dle and low incomes to thrive – and in par­tic­u­lar many peo­ple of col­or who, because of sys­temic racism, are denied equal access to oppor­tu­ni­ty. Unless state law­mak­ers take sig­nif­i­cant steps toward reform­ing our tax code to enact equi­table and sus­tain­able rev­enue sources, mean­ing­ful improve­ments to com­mu­ni­ty invest­ments will con­tin­ue to be dif­fi­cult.

If law­mak­ers can get the bud­get signed by the gov­er­nor in time, they may nar­row­ly avoid a state gov­ern­ment shut­down; but either way, the result is a makeshift bud­get that doesn’t address the unsus­tain­abil­i­ty, inequity, and inad­e­qua­cy of our tax code. Espe­cial­ly with the threat of huge fed­er­al cuts on the hori­zon, state law­mak­ers must ensure the bud­get pro­tects the well-being of Wash­ing­to­ni­ans.

In 2018, law­mak­ers will have anoth­er chance to lift up Washington’s com­mu­ni­ties and build a brighter future for our kids. To do that, they’ll need to get seri­ous about clean­ing up our tax code to raise state resources in an equi­table and sus­tain­able way.

Wash­ing­ton Edu­ca­tion Asso­ci­a­tion:

WEA mem­bers, allies, kids and dogs ral­lied on the Capi­tol steps in Olympia Thurs­day in sup­port of fund­ing for schools and ser­vices.

Leg­is­la­tors released a sum­ma­ry of their new edu­ca­tion fund­ing plan Thurs­day, and while it rep­re­sents progress, it falls short of amply fund­ing our stu­dents’ K‑12 pub­lic schools as required by the Supreme Court’s McCleary deci­sion.

WEA bud­get lob­by­ists are ana­lyz­ing the new edu­ca­tion bud­get, and it will take time to pro­vide a detailed analy­sis. Based on sum­ma­ry infor­ma­tion pro­vid­ed by the Leg­is­la­ture, here are key points:

It fails to amply fund K‑12 schools by the Sept. 1, 2018 dead­line set by the Supreme Court, although it does increase K‑12 fund­ing by about $7.3 bil­lion over four years.

  • Despite the cur­rent edu­ca­tor short­age, it delays fund­ing for com­pet­i­tive edu­ca­tor salaries. While it sub­stan­tial­ly increas­es state-fund­ed base pay for edu­ca­tors over four years, it only has a 2.3 per­cent COLA the first year. It elim­i­nates the salary allo­ca­tion mod­el in 2018–19, and it will require school dis­tricts to nego­ti­ate new salary sched­ules with their employ­ee unions. It also funds addi­tion­al salary in dis­tricts with hous­ing costs that exceed the state aver­age.
  • It cre­ates a new state-run health care sys­tem for school employ­ees, elim­i­nat­ing local bar­gain­ing over health ben­e­fits. The per-employ­ee state health care allo­ca­tion will increase to the same amount leg­is­la­tors and state employ­ees receive. Begin­ning in 2020, a coali­tion of school employ­ee unions will nego­ti­ate health ben­e­fits with the gov­er­nors’ office.
  • It delays fund­ing for small­er class sizes in grades 4–12 and for addi­tion­al sup­port staff as required by Ini­tia­tive 1351, but it funds small­er class sizes for career and tech­ni­cal class­es and a few oth­er spe­cial­ized pro­grams, adding staff posi­tions.
  • It reduces local vot­er-approved school levies, lim­it­ing the abil­i­ty of school dis­tricts to meet the unique local needs of their stu­dents. Planned levy expen­di­tures must be approved by the state before dis­tricts can ask vot­ers for approval, and the state will audit how levy mon­ey is spent.
  • The new plan restricts bar­gain­ing for addi­tion­al edu­ca­tor pay beyond state-fund­ed base pay. This is an issue that needs more review to deter­mine the impact. A leg­isla­tive sum­ma­ry says, Sup­ple­men­tal con­tracts may only be used for defined enrich­ment activ­i­ties and the hourly rate under the sup­ple­men­tal con­tract may not exceed the hourly rate pro­vid­ed to that same instruc­tion­al staff under the basic edu­ca­tion salary.”
  • In 2018–19, locals are pro­hib­it­ed from bar­gain­ing more than a COLA unless their aver­age salary is less than the statewide aver­age.
  • It increas­es fund­ing for the Learn­ing Assis­tance Pro­gram, spe­cial edu­ca­tion and oth­er pro­grams that ben­e­fit the stu­dents who need the most help.
  • It funds three days of pro­fes­sion­al devel­op­ment, but restricts how many half-days school dis­tricts can sched­ule.

The edu­ca­tion bud­get doc­u­ment is over 120 pages long and was released Thurs­day after­noon. It’s com­pli­cat­ed, and there are good parts and bad parts. We’ll post fur­ther infor­ma­tion as we get it.

This post will be updat­ed with fur­ther analy­sis through­out the day.

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