Politics & Government

GOP plan would result in less new money to schools than leaders said — and maybe higher taxes

The Legislative Building at the state Capitol in Olympia. Lawmakers are working to come up with a plan to fix the way the way the state pays for schools, as ordered by the state Supreme Court in the McCleary case.
The Legislative Building at the state Capitol in Olympia. Lawmakers are working to come up with a plan to fix the way the way the state pays for schools, as ordered by the state Supreme Court in the McCleary case. Staff file, 2013

It’s the most ambitious plan to overhaul Washington’s school system in a generation. Yet for weeks, it has been difficult to figure out exactly what it does.

What has now become clear is that the education plan introduced by Senate Republicans doesn’t put as much new money into schools as GOP leaders would like people to believe.

Senate leaders have said their budget would put about $1.8 billion in new state money into K-12 schools in the next two years — a number that, on its surface, comes close to matching the $1.9 billion investment promised in a competing plan from House Democrats.

But that Senate estimate of $1.8 billion doesn’t reflect the actual amount of new funding that would go to school districts under the GOP proposal.

That’s because the estimate leaves out a key element of the Senate plan: a reduction in local school-district property tax levies, which Senate leaders have said is needed to comply with a court order to fix the way the state pays for schools.

Senate leaders now acknowledge that — after factoring in how their plan would reduce local dollars for schools — their approach would add significantly less than $1.8 billion to the state’s K-12 system in the next two years.

State Sen. John Braun, R-Centralia and the Senate’s lead budget writer, said it is “absolutely correct” that some of the state funding in the GOP plan comes from taking away local property taxes, and replacing those dollars with state money.

“You’re trying to differentiate between net new funding and new state funding, and there is clearly a difference there, absolutely,” Braun said in an interview Friday.

If their numbers keep changing on a regular basis, I don’t know how they expect us to keep voting on that.

House Majority Leader Pat Sullivan, D-Covington

GOP leaders, who control the Senate with the aid of one conservative Democrat, hadn’t produced a formal estimate as of Friday afternoon for how much “net new funding” for schools their plan would include.

However, Gov. Jay Inslee’s budget office projected that the net increase in school funding under the GOP plan would be only about $871 million in the next two years, after factoring in how the Republican proposal would phase out local school district levies.

By contrast, under the House Democrats’ plan, the net increase in school funding would be about $2.2 billion over the next two years, since that plan would largely leave local school district levies in place, according to the analysis by Inslee’s Office of Financial Management.

“In terms of actual money that school districts get to spend on things, they’re fundamentally different,” said David Schumacher, Inslee’s budget director.

Problems with numbers

It’s not the first time numbers have shifted around when it comes to the Senate education plan. At the time the Senate first passed the schools measure, in early February, nonpartisan legislative staff were still working to agree on numbers showing how the plan would affect the state’s 295 school districts.

When staff did release numbers showing the plan’s district-level effects, that analysis didn’t include additional dollars that were expected to come from the Senate’s two-year operating budget, which hadn’t been released at the time.

After the Senate budget came out, a new analysis from Senate staff showed about 50 school districts would see funding cuts under the GOP plan. Senate leaders quickly added an amendment saying no districts would lose funding, then passed the updated plan off the Senate floor.

Democrats, however, still aren’t sure they can rely on the numbers coming out of the Senate, or that they know exactly what the Senate schools plan does.

“If their numbers keep changing on a regular basis, I don’t know how they expect us to keep voting on that,” said House Majority Leader Pat Sullivan, D-Covington. “We want to make sure our districts are at least kept whole.”

This is very complicated to get it right. But we’re getting closer.

Sen. John Braun, R-Centralia, the Senate’s lead budget writer

Braun, the Senate budget writer, said it’s normal for numbers to shift as proposals progress in the Legislature.

“This is very complicated to get it right,” Braun said. “But we’re getting closer.”

In the McCleary case, state lawmakers are under a court order to take on the full costs of paying teachers and other school employees by September 2018. Right now, those costs are being paid partly through local school district levies, which the state Supreme Court has said is unconstitutional.

To address the McCleary ruling, the House Democrats’ plan would raise $3 billion in new revenue over two years, mainly from new taxes on capital gains and tax hikes for some businesses.

The Senate Republican plan, meanwhile, would institute a new statewide property tax, while reducing local school district levies to offset the costs to local taxpayers.

Tax effects

GOP leaders have been glib when it comes to discussing the tax effects of their plan, saying it would result in property tax decreases for 83 percent of Washingtonians.

Yet that statement — like the promised $1.8 billion in new funding under the GOP plan — isn’t necessarily true.

Starting in 2019, the Senate plan would enact a new statewide property tax of $1.55 per $1,000 in assessed value, while eliminating local school district property tax levies.

That year, most people would indeed pay less in property taxes, according to an analysis by nonpartisan staff.

Yet a year later, in 2020, the Senate plan would let local school districts enact new, more modest local levies again, subject to new conditions. And, if those new local levies are approved in all districts, property taxes would increase nearly everywhere in the state, according to the staff analysis.

With new levies in effect, only three school districts would ultimately see lower taxes under the Senate plan than they would under current law, the analysis says.

Braun said that since those tax increases would be controlled by local voters, he considers them different and out of the state’s control.

“That’s a voter decision,” he said.

He said House plan is flawed because it continues to rely too much on local levy dollars, which the state Supreme Court said shouldn’t be used to pay basic education costs.

While the Senate plan would cap school districts’ local tax collections at 10 percent of the revenue they receive from state and federal sources, the House plan would have a more generous levy lid of 24 percent.

Right now, most districts have a 28 percent levy lid.

Lawmakers are in the middle of a 105-day session that is scheduled to end in late April, but it is likely they will require several overtime sessions to finish their work.

Melissa Santos: 360-357-0209, @melissasantos1