Politics & Government

The fight continues on school-funding in face of $1 billion court order

Sen. Christine Rolfes, D-Bainbridge Island, left, chairwoman of the Senate Ways and Means Committee, speaks as House Majority Leader Pat Sullivan, D-Covington, right, looks on during the education funding panel of the Associated Press' annual Legislative Preview, Thursday, Jan. 4, 2018, at the Capitol in Olympia, Wash. (AP Photo/Ted S. Warren)
Sen. Christine Rolfes, D-Bainbridge Island, left, chairwoman of the Senate Ways and Means Committee, speaks as House Majority Leader Pat Sullivan, D-Covington, right, looks on during the education funding panel of the Associated Press' annual Legislative Preview, Thursday, Jan. 4, 2018, at the Capitol in Olympia, Wash. (AP Photo/Ted S. Warren) AP

Headed into the 2018 legislative session, lawmakers remain divided on paying roughly $1 billion to meet a court order requiring Washington to speed up a fix for its public school system.

Top Republican and Democratic officials debated Thursday at the Associated Press Legislative Preview in Olympia over whether to use state reserves to pay the sum, use new taxes to raise the cash or to ignore the state Supreme Court altogether.

Many Democrats have argued the state should meet the court order and do so with either new taxes or a wide array of budget reserves. Democrats have narrow majorities in both chambers of government and hold the governor’s office heading into the 60-day session that begins Jan. 8. Republicans have cautioned against raiding reserves, and some suggested disregarding the court.

“We have the cash in our pocket to do this,” Democratic Gov. Jay Inslee said. “It’s in our pocket, it’s not like we’re broke.”

Lawmakers from both sides of the aisle, who spoke before Inslee, appeared lukewarm on the governor’s specific proposal to pay for the education costs with reserves and later refill the state’s wallet with a tax on carbon polluters. The nature of that carbon-tax plan is expected to be released next week.

The K-12 money is the latest — and potentially final — task remaining from the state Supreme Court’s landmark 2012 education case known as McCleary. The court said in its initial ruling the state was not fully funding the school system as required by the constitution.

Since then, lawmakers have poured billions into public schools and enacted major reforms. One of those reforms came in 2017, when the Legislature approved a complicated property tax shift to take on the full cost of teacher and other school staff salaries that in recent years have been paid in part by local property taxes.

The shift, thought to be the last piece of McCleary, is supposed to inject $7.3 billion in new state spending on K-12 schools over four years.

At the same time, the schools plan limits how much money districts can raise through their local levies and says the money can’t be used to pay for basic education costs, such as teacher salaries.

Earlier this year, the court deemed the state’s reforms worthy, but said the changes did not take effect fast enough to meet a Sept. 1, 2018 deadline.

The schools plan — and the new state property tax lawmakers used for it — is phased in, meaning most of the complex changes are fully implemented in the 2019-2020 school year.

Republicans on Thursday made the case the so-called levy swap was designed to introduce the complicated changes to school funding over time to avoid burdening school districts.

Sen. John Braun, a Republican from Centralia, said that plan shouldn’t be sped up simply to meet a court order one year faster. Doing so could end up causing problems for some districts, Braun said. Braun, who was the chief budget writer in the state Senate last year, said the state instead should focus on improving special education and other areas education advocates say need help following the 2017 school reforms.

“I think that our plan is good. The court has said it’s good. They’ve certified the plan. They just don’t like the timing,” he said. “I just think we did the timing for a reason. We shouldn’t undo the timing carte blanche.”

Braun said he wasn’t in favor of using protected reserve funds which he said should be saved in case of economic downturn. He also said the state doesn’t need new taxes to pay for McCleary and could use hundreds of millions in increased revenue that recent budget projections have shown is flowing into state coffers.

Inslee’s plan uses a mix of unrestricted reserves and money from the ‘rainy day fund,’ which typically requires approval from 60 percent of the Legislature.

Rep. David Taylor, a Moxee Republican, said the state will be fully compliant with the court in 2019 and should not bother enacting changes just to start everything one year early.

“We can see what happens in the year difference there, but at this point, no, I do not believe we need to speed up implementation schedule,” he said.

Democrats weren’t ready to test the court — which could hit the state with sanctions — by ignoring the McCleary order. The state already is being held in contempt of court for its lack of progress on McCleary, with the court imposing fines of $100,000 per day.

Sen. Christine Rolfes, a Democrat from Bainbridge Island, said she believes lawmakers have more work to do on McCleary in 2018.

Rolfes is the Senate’s chief budget writer now that Democrats have a slim majority in the chamber. The party took control of the Senate in fall of 2017 with a special election victory in Seattle’s Eastside suburbs.

“I believe that we need to present a budget and policy plan that shows we finished our job,” Rolfes said.

Democrats also did not immediately jump aboard Inslee’s supplemental budget plan to use reserves and refill the state’s funds with a carbon tax.

Rolfes pointed out using any money from the budget-stabilization account requires more than a simple majority vote, meaning some Republicans would have to approve those funds. She also said Inslee’s carbon tax was only “one option that will be considered.”

Many Republicans have been opposed to a carbon tax in Washington, generally worrying it might hurt the economy.

Rolfes did not offer many clues on her preferred McCleary solution.

“Whatever we come up with will probably need to be bipartisan to some extent in scope and scale,” she said. “And it’s easier for the governor to do the ‘budget of one’ than for us to all agree on the right approach.”

Speaker of the House Frank Chopp, a Seattle Democrat, also said gathering support for a carbon tax would be tough in 2018, a supplemental budget year typically reserved for tweaks to the two-year budget approved the year before.

“The chances of us doing something in a 60-day session is not the greatest, shall we say,” Chopp said.

Inslee was undeterred. He said a carbon tax is still a possibility and necessary to fight climate change that scientists say may be exacerbating forest fires in the Western United States and is causing other negative effects to the environment.

“I actually feel very good where we are about this right now because you didn’t hear absolute ‘no’s’ this morning from the legislators,” Inslee said.

The governor also implored the Legislature to meet the McCleary order, saying speeding up the school fix for 2018 is a worthy endeavor.

“These kids are only young once, and one year makes a difference,” Inslee said.

Walker Orenstein: 360-786-1826, @walkerorenstein