Rep. Ross Hunter

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Meeting on K-12 Compensation and Levy Reform

May 20, 2015 at 4:27 pm - Rep. Ross Hunter  

As I mentioned in my last blog post and newsletter, I think it’s necessary to discuss the details about levy reform in detail and in public.

Tomorrow, we are hosting a work session on K-12 levy and compensation reform. This session will be a chance for staff to present data on levy issues and for Legislators to discuss, in full public view, this information. While there will be no formal public testimony accepted during the session, we will welcome follow-up feedback from attendees.

Based on the work session and subsequent public feedback, I hope that we will be able to come to joint conclusions that reflect a larger consensus. Bipartisan support of a solution to this issue will be crucial for moving anything forward, and this won’t be achieved without the input and understanding of the public as well.

Thursday, May 21
10:30 a.m.
House Hearing Room C
Washington State Capitol, Olympia

To learn more about these issues, check out my blog here and here for some lengthy discussions on the topic.

To watch the work session live from your computer, visit TVW’s website.

School Levy and Compensation Reform

May 11, 2015 at 8:24 am - Rep. Ross Hunter  

teacher compensation differences between districts

Click the chart to get a cool interactive version on the Seattle Times website.

Two recent articles in the Seattle Times point out one of the remaining key elements of resolving the McCleary “problem”, and it’s a BIG element. Most estimates have the size of the problem at about $3,000,000,000 to $3,500,000,000 ($3 – $3.5 billion) a biennium.

  • Wildly varying teacher salaries part of state budget debate This article describes the overall problem and was the cover story in the Sunday paper. It’s a good summary. The chart to the left is from this story.
  • State in ‘weird place’ trying to alter reliance on school levies. This article talks about the politics involved, but doesn’t bring up all the weirdness with school funding formulas, in particular “levy equalization” paid to well over 200 districts (of 295) because their property values are lower than the core central Puget Sound districts. It also doesn’t address the “small school factor” that results in some very small school districts getting $50,000 per student.

I wrote a long piece on this issue last month. We have to make significant progress on the problem to comply with the supreme court. There are two endpoints of the discussion at this point:

  1. Bruce Dammeier (R-Puyallup) introduced a bill (SB 6109) that does many, many things. Too many things. I have many complaints about it, but it is a serious piece of work.
    1. Defines a new compensation model for teachers and shifts all teachers to it. The model makes changes in teacher compensation that will have winners and losers. It’s hard to pass a bill that results in some teachers losing salary.
    2. Creates a regional compensation adjustment based on metropolitan statistical areas. These are very large and poorly shaped to respond to our economy. It’s not a crazy choice, but it’s one where I prefer we do something different. There is much disagreement on the need for this, with rural districts concerned that they will have a harder time hiring teachers. As you can see from the chart above, the pay is already significantly different.
    3. Limits the amount of money districts can spend on anything related to earning graduation credits to the money from the state. This would prevent districts like Bellevue from offering a 7-period day, or districts from using levy money to fund summer school. I’d have a hard time supporting this provision.
    4. Shifts all school employees to a state-run healthcare system and removes it as a subject of bargaining. I think we could save some money and provide better healthcare for school employees overall with this approach, but there are many, many issues to be worked out so that there are not big losers in how its implemented.
    5. Repeals I-732 (teacher COLAs) and replaces it with a different (lesser) inflation factor.
    6. Makes significant changes to how school levy limits are calculated that would have the impact of allowing Bellevue and Seattle to raise gobs of money above what they’re doing now, but not spend it on anything academic. I have huge problems with how he does this specific change.
  2. Pat Sullivan, Kristine Lytton, Reuven Sullivan and I introduced HB 2239 that is the complete opposite end of the spectrum. It sets up a series of deadlines for the legislature to work out all these issues. The deadlines result in changes (perhaps identical to the ones Bruce envisions, but I doubt it) by the 2018-19 school year.

Both bills wind up with the state paying ALL of a teacher’s salary, instead of local taxpayers picking up the tab for large chunks of it. There is a lot of concern in the Legislature that some districts wind up paying more of the cost of this than others, which is true. The proposals to pay for it include:

  • Revenue-neutral (mostly) levy swap, raising the state property tax and lowering local property taxes by similar amounts. This tends to raise taxes in urban (wealthier) areas and lower them in rural (poorer) areas.
  • Capital gains (Senate Democratic proposal) has an even more exaggerated shift with increases in urban areas and decreases in rural areas. This could be mostly revenue-neutral as well.
  • Carbon Tax (an option in HB 2239) would have some kind of shift, but it’s hard to be specific about it without a lot more research. Also could be revenue-neutral.

If we used sales tax to pay for it, King County would pay half the cost, but get only one third the value – he have half the state’s economy and only a third of the population. This isn’t crazy – in a state with the most regressive tax system in the nation any tax move we do should be in the direction of greater fairness.

My guess is that in order to solve this problem we have to solve all of the other problems at the same time. Absent new revenue to pay for the additions to K-12 (all-day kindergarten, lower class sizes in K-3, etc.) it will be hard to convince legislators and voters in King County that they should pay for tax cuts in more rural parts of the state.

In my last post I said I didn’t know what the next step was. I’ve come to a conclusion and will be running a series of meetings to explore all these questions in detail, in public. Private meetings to work out proposals are very difficult, as you never have the full spectrum of interests in the room. If you do come to an agreement (which has not happened in the last three years we’ve been working on the problem) you still have to convince everyone else that your solution is rational. This will not be a quick process, but while we are in Olympia for special session we have time and can perhaps shorten the 2-year schedule envisioned in HB 2239.

The final bill we adopt this session, and we will need to adopt one, will be somewhere between the two.

 

 

 

 

 

School District Compensation and Levy Reform

May 6, 2015 at 8:08 am - Rep. Ross Hunter  

Last week the Appropriations committee held a hearing on the second half of the McCleary decision; the requirement that the state fund adequate compensation, not local taxpayers. The hearing took over 3 hours and is super-interesting. You can watch it on TVW here.

This sounds terrifyingly dull, but it wasn’t. Anytime you talk about property taxes and use numbers like three and a half billion dollars you get people’s attention. We had a briefing on three Senate bills and a proposal by yours truly that isn’t drafted as a bill. The bills wind up being 70 pages long and we are not close enough to having agreement to spend the effort drafting legislation – I’d rather agree on policy first and then draft a bill. The drafting is a lot of work for staff that are all working on budget right now. I’m not a fan of random work.

  • Bruce Dammeier introduced a bill (SB 6109) that does many, many things. It’s AN implementation of a levy swap, but has a lot of restrictions in it that make it unattractive to urban districts. Bruce implements a regional compensation model.
  • Christine Rolfes has a bill (SB 6104) that does many of the same things, but also funds initiative 1351. It’s profoundly expensive and depends on the capital gains tax to pay for part of it. Christine does not do regional comp.
  • Jim Hargrove (SB 6103) uses property tax to shift some payments for compensation to the state, making major changes to property tax.
  • My proposal is very focused on dealing with the compensation problem, without making a lot of changes to how teachers are paid, restrictions on use of levies, etc.

Information on all of them is available here.

The House bill we had a hearing on (HB 2239) makes no actual changes in law, other than a judicially enforceable schedule of making the decisions that need to be made. The schedule would lead to the new financing system being in place for the 2018-19 school year, just in time to comply with McCleary. The decisions could be made more quickly, but it would be difficult to get the buy-in if we do.

I’m not sure what our next step should be at this point. We need to have some public hearings to determine the financial parameters of the actual problem. I will attempt to schedule some meetings. We may choose to use a smaller room and have them be option for all the members of Appropriations to attend, or some other way to have a more interactive hearing. More to come.

Budget Update and Thoughts on Teacher Compensation and Levy Reform

April 21, 2015 at 4:12 pm - Rep. Ross Hunter  

4th Graders Visiting the Capitol

4th Graders Visiting the Capitol

I write this on Tuesday April 21st. At this point I do not expect that the Legislature will agree on a budget before the regular session ends on Sunday April 26th. The Seattle Times published a lot of articles this weekend about the budget, and I’m structuring this newsletter around them. The first article in the collection discusses in detail all the press conferences that the two sides had all week. We’ve had a number of meetings between the two negotiating teams to try to set up the framework for talks, but we’re not making much progress.

I think it’s mostly about the different approaches the two sides take to the budget. The House Democrats look at the various categories of spending and make recommendations about what we think the state should invest in, then work back to figure out how much revenue we need based on that. This is a balancing decision, and lots of desired spending doesn’t get done in the budget proposal. The Senate Republicans make a decision that they won’t vote for taxes (except for roads) and try to deal with the huge increase in required K12 spending by cutting everything else and using a lot of one-time gimmicks. This results in many bad outcomes.

I made a proposal that both sides work through all the areas where we have significant differences and resolve the details of what we want to purchase. The Senate suggested we set a dollar limit (theirs) and work within that. The limit was low enough that it prevents making reasonable decisions. We are at a temporary impasse.

Education funding stuff after the break.

Our job is to find a balance between the two approaches. Taxes have an impact on the economy, but so does lack of services. Finding the right balance of investment in infrastructure, education, human services, etc. will require much discussion. Sen. Hill and I will talk every day. We had lunch on Friday and agreed to try to get a number of bills resolved before the end of the week, simplifying the eventual agreement.

Education Funding

Last week saw a flurry of proposals for resolving the second half of the McCleary decision: the unconstitutional dependence on local levies to fund compensation. The Times opines that we should do this. I agree, and have worked on a variety of proposals for the last several years. Four years ago I made a revenue-neutral proposal for a “levy swap” that would have addressed most of the problem. (The proposal is now out of date, but I leave it up because there are a lot of links to it on the web.) This week Sen. Bruce Dammeier, Superintendent of Public Schools Randy Dorn, and several Democratic Senators each made suggestions. I have a detailed proposal I’ve worked out that addresses most of the concerns addressed by each of the other groups as well, but I have not made it public. I will later this week just to have a reference point, but all of our actual proposals don’t actually help resolve the issue.

In an attempt at a different direction Reps. Sullivan, Lytton, and Carlyle and I introduced a bill laying out a two-year process for resolving the issue, which is much less detailed than the other proposals, but might actually force us to discuss these issues in public. The bill lays out details of every decision that must be made and a required timeline for making them. This is the same process that we used to accomplish the complete re-write of the basic education definition in 2009. It should work again.

I agreed to this because I’ve changed my mind some about how we should go about it, not because I want to delay the decision. There are dozens of specific choices that go into each of these proposals. The end result of all the decisions is a spreadsheet with 295 rows (one for each district) and about 15 columns detailing both the funding impacts for school districts and the taxpayer impacts by school district of the collective weight of the decisions.

Every time I have tried to walk a proposal through the legislature I run into resistance – “the tax impact on my district is too high”, “the levy equalization reduction can’t be sustained”, “the bargaining changes are too extreme”, etc. Mostly the proposal is just too complex to be easily understood by people not steeped in education finance. My conclusion from this experience is that with a complex bill like this one that has very large consequences the entire legislature and all of the outside interest groups must be able to see the process of making the tradeoffs or the bill will fail to gain enough votes to pass.

School districts spend a lot of money on compensation for teachers and other educational staff above what the state provides. Much of it goes to support people in the “prototypical school model” which means that they are “basic education” employees, and their compensation should be paid for by the state. The prototypical school model is an outline of all the jobs that a school building needs, with a count of how many of each type they need per student at the school. It’s a way to figure out how much money we should provide to each district to fund their schools.

Here is a summary of the problems:

  • Of the amount paid out from levy funds in compensation:
    • How much is for basic education employees? (Somewhere between 80 and 90%, but this is debatable.)
    • Do school districts pay more than they need to?  (We have studies that say yes, but not by large amounts.)
      • What is the required starting pay, average pay, and max pay for each of the categories in the prototypical school model? What methodology do you use to determine this?
    • Is the amount different between districts? (Yes)
      • If so, is the difference predictable based on some observable factor, like cost of living in the district?
      • Do we want to provide different amounts of money to different districts based on the costs they face?
        • Sen Dammeier proposes a regional model, as do I.
        • I disagree with him about some of the methodology he uses.
      • How would the regional differences be calculated and by whom? This might be contentious…
    • Do we give money to districts based on the actual teachers they have, or on an average cost per teacher? The average model is easier to figure out. We do the specific-teacher model today, and it has both good and bad points.
  • How do you decide how much to pay any individual teacher? Today we have a goofy system that has the highest bonus for teachers having master’s degrees in the country. It’s pretty clear from research that master’s degrees have little impact on student outcomes except in very limited circumstances.
    • There are over 50,000 teachers who have invested in the current system. Do you change compensation rules for existing teachers? (It may cost someone $20,000 to get a master’s degree. Do we deprecate this investment overnight?)
    • Are teacher salaries determined at the state level or can they vary by district?
      • Superintendent Dorn proposes state-wide bargaining (with him, not the governor).
      • Sen. Dammeier proposes a completely new set of compensation rules based on the recommendations of a committee we appointed (the Compensation Technical Working Group). It’s possibly a good idea, but complicated.
  • How should we determine the cost of benefits provided to school district employees? The state has to provide enough money for this, but the actual healthcare costs are bargained locally.
    • Sen. Dammeier’s proposal shifts to a state-run program, simplifying this.
    • My proposal would use the amount allocated to the state healthcare system, but allow districts to bargain healthcare locally.
  • Do we continue the arbitrary differences between districts that were set 40 years ago? This is called “grandfathering” and it affects districts in many different ways.
    • If we eliminate grandfathering, do we lose the votes of legislators from districts that lose historical (but unjustified) advantages? This is a bigger problem than you might think.
  • What rules do we have for local districts in supplementing the program of basic education paid for by the state? Everyone agrees that they should be able to hire teachers to coach football or the robotics club, but there are more serious questions:
    • Can districts hire additional teachers and have lower class sizes?
    • Can districts pay existing teachers more than other districts do? (This has very serious long-term problems that we are trying to unwind today, so probably not.)
    • Should middle-school special education teachers get paid more than kindergarten teachers? (They seem to when you look at the data, but it’s not clear how this works out legally…)
    • If not, how would you implement a system that prevented this?
      • Sen. Dammeier proposes a single state-wide schedule of compensation.
      • I don’t address this, but probably should. His proposal would have great difficulty being administered locally.
  • Most estimates have the total cost of fixing this problem at about $3 billion to $3.5 billion per biennium. Where does this money come from? It’s important to recognize that in almost all cases teachers are currently being paid the right amount, but the money is coming from a constitutionally invalid source – unreliable local levies.
    • A variety of us have proposed a (mostly) revenue-neutral property tax swap to do this – raise the state levy and lower local levies. This raises taxes in Seattle and Bellevue and lowers them everywhere else. School districts would receive the same amount of money in most cases. I think this is the most likely idea, as any tax you propose to use in a swap would have the same impact on Seattle and Bellevue because that’s where the economy is.
    • The Senate Democrats propose using a capital gains tax to do this. I don’t think there’s enough money there to do it, but we should look at the idea. This would have the same regional imbalance. (Both proposals are progressive, and that makes this state uneasy for some reason.)
    • The bill I introduced raises the possibility of using a carbon mechanism to do it. This is a reasonable alternative and worth consideration.
  • Many of the schools in our area would like to enhance the program of basic education. Bellevue has a 7-period day, for example. This is paid for with levy money. How do you figure out the amount of levies districts can raise in the future? All the proposals are wildly different on this point.
    • Are there limits to how much can be raised? We would prefer not, but many people in more rural areas are concerned that they are unable to raise the same level of funds and that their children will be at a disadvantage as a result.
    • What can levies be spent on?
  • The state currently provides money to districts that have difficulty raising local property taxes. The formula has a growth rate of 8% a year, which is insane and not sustainable because it grows twice as fast as most revenue sources we have. This formula will have to be changed. Today it distributes about $800 million to districts biennially. Changes will be politically difficult.
  • If we are going to depend more on the state property tax, and if education costs grow with inflation, are we going to change the growth rate of the tax to match the growth rate of the cists it’s paying for? Right now the growth of the state property tax is limited to 1% plu new construction due to initiative 747.
    • Fixing this might be difficult politically, but seems necessary to prevent the same problem from recurring 10 years from now.
  • How do you phase this whole thing in? This turns out to be really, really hard.
    • Property taxes are collected on calendar years, starting in January and need much lead time to set the rates for.
    • State budgets are done on fiscal years, running from July through June.
    • School budgets are done by school years, running from September through August.

I’ve left lots of stuff out of this list so people will read the post. Any proposal has to deal with almost all of these questions.

The Supreme Court requires that we have a plan with annual benchmarks that they can measure and enforce. The court wisely chooses to not make the decisions above – they are trying to push the Legislature to do so. If we force the court to make the decision bad things will happen – bad things that affect large pots of money.

The proposal that Reps. Sullivan, Lytton, and Carlyle and I have put out makes some decisions in the 2016 session and others in 2017. The changes would take effect in 2018. I would prefer to have stronger language that specifies the size of the problem more clearly and outlines the eventual solution more than the bill does currently, but it seems more useful to introduce a framework than a complete bill. We can strengthen it as we go through the negotiation process.

House and Senate Budget Differences on K12

April 20, 2015 at 11:27 am - Rep. Ross Hunter  

I’ll be posting a handful of high-level summaries of budget differences with the Senate over the next few days. As usual, K12 is my first post in this sequence.

House Democrats are investing $3.2 billion more in K-12 education with this budget over the amount we spent in the last biennium, a 21% increase. People have asked me what the difference is between the House and Senate budgets for K-12 spending. This chart has the highlights.

K12 Funding Differences

There are lots of other places I have concerns, like the Senate requirement that districts reduce their levies if they accept the constitutionally required operating cost money, even though the Senate budget doesn’t address the costs those local levies pay for.

For more thoughts on education funding, click here.

House and Senate Budget Differences on K12

April 17, 2015 at 4:04 pm - Rep. Ross Hunter  

I’ll be posting a handful of high-level summaries of budget differences with the Senate over the next few days. As usual, K12 is my first post in this sequence.

House Democrats are investing $3.2 billion more in K-12 education with this budget over the amount we spent in the last biennium, a 21% increase. People have asked me what the difference is between the House and Senate budgets for K-12 spending. This chart has the highlights.

K-12 Differences between House and Senate

There are lots of other places I have concerns, like the Senate requirement that districts reduce their levies if they accept the constitutionally required operating cost money, even though the Senate budget doesn’t address the costs those local levies pay for.

For more thoughts on education funding, click here.

Budget Negotiations to Start Monday

April 13, 2015 at 8:54 am - Rep. Ross Hunter  

_MG_0217We’re now entering the budget negotiation phase of the session. The Senate and House are in pretty significantly different places. The top level difference is only about a billion dollars, but the underlying differences are much greater than that. We need to come to agreement by Wednesday the 22nd to be able to get the mechanical part of the process completed if we’re to finish on the 26th, the 105th and final day of the regular session.

On Thursday the budget negotiation teams met with the Governor. This meeting happens every year and it’s an opportunity for the Governor to lay out what he expects in a budget. He has a lot of leverage over the process as he can veto individual parts of the budget he doesn’t like or, if he really doesn’t like the product can veto the entire thing, sending us back to work. This doesn’t happen very often, but is definitely part of the process. There are ALWAYS vetoes of individual line items in the budget.

The Senate Republicans were somewhat disgruntled by Governor Inslee’s comments, though I thought they were pretty reasonable. He laid out a pretty simple list of things he wants:

  • Fund at least $1.3 billion in K12 McCleary funding. Both budgets comply with HB 2776, though I am concerned about aspects of how the Senate delays implementation of class size increases, pushing a lot of increases off to the next biennium.
  • Fully fund the collective bargaining agreements. The House does this, the Senate does not. We are a few hundred million apart.
  • Fully fund Initiative 732 increases for school employees, including the extra that gets them to the same level of increase that state employees get. The House does this, the Senate does not.

He also laid out a set of things he doesn’t want to see. These also seem reasonable to me:

  • “Lean” cuts, or other unspecified cuts. These are often described as “across-the-board” or “efficiency” assumptions. Mostly they are BS – assumptions that magic will occur and money will be saved without any impact on services. When the magic assumption doesn’t come true there isn’t enough money to do the work the agency is supposed to do, and it looks like the Governor is badly managing the system or making cuts, not like the budget was inadequate.
  • No dependence on bond funding for the operating budget. This is buying groceries on your home mortgage.
  • No tax cuts until all these requirements are met.

Seattle Times: GOP bristles at Inslee stand on taxes, state pay

Here’s the talking points the Governor used in the meeting.

My comments in the Times article:

“He was calm. He was reasonable. He made a limited set of points,” said Rep. Ross Hunter, D-Medina, who chairs the House Appropriations Committee. “He’s got to actually administer the system after we leave town. He wants a budget that won’t cause crazy disasters to happen on his watch.”

We sit down to see how we can create a framework on Monday. We would have met last week, but Sen. Hill had food poisoning and missed Thursday and Friday.  This sounds awful at this time of the year. (Anytime actually, but the negotiations are pretty intense and time consuming.)

The first thing the Legislature did this year was pass HB 1105, an early supplemental budget that fixed some of the legal problems we have on mental health, and some of the staffing problems directly caused by “lean” cuts in the Children’s Administration.

My conclusion: the Senate Republicans are upset that if these requirements are met it’s hard to imagine how one would write a budget that doesn’t require new revenue. This has been where I’ve been for a long time. Other people have more recently come to the same conclusion, including the Seattle Times editorial board.

If some new revenue is needed — and that appears to be the case — the Legislature should vet a capital-gains tax proposal offered by the House Democrats. It is more conservative than Gov. Jay Inslee’s proposal, hitting relatively few wealthy households, while accounting for the volatility of capital gains with a dedicated fund that would fill in go-go years and could be drawn down in slowdowns.
Seattle Times Editorial: How to get closer to solving state’s budget mess

We’ll see where all this goes – we have much work to do to come to agreement. My closing comment in the Times article on the budget was that I hoped we would finish early as I’m not fond of living in Olympia.

House approves two-year budget, invests billions in education

April 2, 2015 at 6:18 pm - Washington House Democrats  

 OLYMPIA – The House of Representatives approved a two-year operating budget today that invests an additional $3.2 billion in K-12 education and makes significant investments in early learning, higher education, and the safety net. The House proposal takes a significant step forward in solving the state’s budget challenges after several years of cuts.

“We can either step up to the challenge, or lose the opportunity to help middle-class families that have suffered from seven years of cuts to services they depend on,” said House Majority Leader Pat Sullivan (D-Covington). “I’m willing to step up to that challenge, and I’m willing to vote for a budget that gives people hope across this state.”

The House budget proposal is the only budget proposal being debated in Olympia that puts the state in full compliance with the Supreme Court’s McCleary ruling to fully fund basic education by using sustainable and reliable revenue sources. It allocates $1.4 billion toward new K-12 education investments that comply with the McCleary decision.

“This budget invests in closing that pernicious opportunity gap in our state,” said Rep. Sharon Tomiko Santos (D-Seattle). “This is the budget that we can all be proud of.”

The additional $3.2 billion for K-12 education will go toward reducing K-3 class sizes, all-day kindergarten, materials and supplies, and counselors to help get students career and college ready. It also restores cost-of-living adjustments for K-12 employees, which have been suspended for the last six years to help balance the state budget.

The House budget invests an additional $227 million in high quality early learning expansion across the state.

“Half of our kids enter into kindergarten behind,” said Rep. Ruth Kagi (D-Seattle). “They don’t have the skills to be successful and most of those kids never catch up. Our obligation is to get those kids ready to succeed. This budget makes the biggest investment in early learning our state has ever made. It’s the best investment we can make.”

The House budget also includes nearly $100 million in new mental health capacity to ensure that people get the help they need in their time of crisis.

“The cuts that the Legislature made to our safety net are both morally reprehensible and unconstitutional. We’re fixing those items,” said Rep. Ross Hunter (D-Medina), House Appropriations Chair. “This budget is a step forward to reinvesting in the future of Washington state.”

“Mental health struggles can happen to anyone, anywhere, at any time,” said Rep. Laurie Jinkins (D-Tacoma). “Because of years of cuts to services like mental health care and a no-new-taxes approach to budgeting, we have been unable to help. This budget has renewed my faith in the commitment we made to the people of the state of Washington.”

Budget leaders from the House and Senate are expected to begin negotiations soon. The 105-day legislative session is scheduled to end on April 26.

Additional budget information can be found here.

 

Rep. Ross Hunter response to Senate Republican Budget Release

March 31, 2015 at 3:39 pm - Rep. Ross Hunter  

“Now that both proposals are public, I look forward to beginning negotiations with the budget leaders in both chambers. Getting the negotiation process started right away is critical to reaching our goal of passing an operating budget that works for all Washington families.

“While I haven’t had a chance to review their proposal in detail as it was only made public a few hours before the Senate Ways & Means committee meeting, at first glance I see several items of concern.

“First and foremost, their budget relies on unsustainable one-time budget transfers and overly optimistic assumptions of marijuana revenue. They transfer hundreds of millions away from already-struggling local governments, taking away money that’s used to create jobs that build and maintain our state’s infrastructure.

“The Senate’s budget assumes millions in magic agency ‘efficiencies,’ which are essentially budget gimmicks designed to make cuts without being specific about which cuts they’re making. It also undermines the collective bargaining process by not honoring the negotiated contract agreements for state employees.

“But most importantly, it completely kicks the can down the road on solving the problem of our broken revenue structure. We have the most regressive tax structure in the nation. Costs for state and local services are balanced on the backs of low-income and middle-class families while the wealthy pay only a tiny fraction of their income in taxes.

“The House budget proposal is a responsible approach to fully funding basic education by building a more progressive revenue structure while also solving the problems of our current operating budget shortfall. I believe our proposal is the better option for moving this state forward.”

House budget fully funds basic education

March 27, 2015 at 11:30 am - Washington House Democrats  

OLYMPIA – House Democrats unveiled their 2015-17 operating budget plan on Friday – a budget that will add $3.2 billion in additional K-12 investments over the next two years compared to the 2013-15 budget. The HDC proposal is the first budget proposal on the table that puts the state in full compliance with the Supreme Court’s McCleary ruling, which mandates the state adequately fund basic education by 2018.

“After seven years of cuts totaling more than $12 billion, we have to take an honest look at the state of our state,” said House Majority Leader Rep. Pat Sullivan (D-Covington). “We have to ask: ‘Is this really what we want?’ This budget is a stand against mediocrity. Just being ‘Okay’ is not acceptable.”

“This budget keeps our promises to Washington’s one million kids,” said Rep. Ross Hunter (D-Medina), House Appropriations Chair. “We’re making the biggest investment in student success, mental health, and middle-class families that our state has seen in decades. It’s a responsible budget that meets the needs of our state and balances over four years.”

Highlights included in the House Democratic Budget Proposal:

  • $3.2 billionAdditional K-12 spending, a 21% increase in funding over last biennium
    • $1.4 billion in K-12 policy adds that will count towards that state’s McCleary obligation including:
      • K-3 class size reduction
      • Full funding for all-day kindergarten for every child in the state
      • Materials, supplies and operating costs
      • Supports to prepare students for college and careers
    • The remaining $1.8 billion investment pays for the policy decisions made towards fully funding education in the 2013-15 budget.
  • $385 million – Restore cost-of-living adjustments for school employees.
  • $227 million – Expansion of quality early learning and childhood education.
  • $256 million – Investments in higher education including two years of tuition freezes, student financial aid, and high-demand, high-salary degrees.
  • $100 million – New mental health capacity to ensure that people get the help they need in their time of crisis.
  • $9.6 million – Restore previous cuts to the state’s Food Assistance program that feeds hungry children, families, and seniors in the state.

As a result of an unfair and outdated tax structure, state revenues are becoming increasingly inadequate to pay for essential state services like basic education, health care, and prisons. The state doesn’t have adequate resources despite a growing economy. After seven years and $12 billion in budget cuts stemming from the Great Recession, many lawmakers believe now is time to act on revenue reform.

“We have the most unfair tax structure in the nation,” said Rep. Reuven Carlyle (D-Seattle), House Finance committee chair. “Our tax system hurts working families, the middle class, and small businesses, while the wealthiest individuals and corporations don’t pay their fair share. It’s time to build fairness in the system so that we can make critical investments in our state’s economy.”

The budget proposal includes a revenue package that takes a step toward restoring fairness in the system and generates the revenue needed to pay for essential state services. Those proposals include:

  • Ask the wealthy to pay their fair share by imposing a 5% excise tax on capital gains profits.
    • Revenues from the capital gains tax would go into a new “Student Investment Fund” to be used for K-12 and higher education investments.
  • Reinstate the increase on the B&O service tax rate by .3%.
    • A similar policy was enacted temporarily during the Great Recession.
    • The proposal also increases the Small Business B&O Tax Credit for service businesses by nearly double, eliminating B&O tax for an additional 15,000 businesses each year. Services businesses making up to $100,000 in taxable income would pay no B&O taxes at all.
  • Bring fairness to our home-grown online retailers by taxing transactions from out-of-state online retailers.
  • Repeal and narrow seven of the 650 tax exemptions that have proven to be outdated, costly, and inefficient.

The total amount of revenue raised though this proposal is $1.5 billion. Additional details of the revenue package can be found here.

The operating budget, HB 1106, is scheduled for a public hearing on Monday, March 30 at 1:30 p.m.

Budget documents can be viewed at: http://fiscal.wa.gov/BudgetOBillsHouse.aspx

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About Ross
I’m proud to represent Bellevue, Redmond, Kirkland, Medina, Clyde Hill, Hunts Point, and Yarrow Point in the Washington State House of Representatives.
I am chairman of the Appropriations Committee, responsible for crafting biennial budgets, and am past chair the Washington State Economic and Revenue Forecast Council.