As a result, legislators are understandably hesitant to propose, much less vote for new taxes. They not only run the risk of getting voted out of office, but it’s likely any measure they approve will get overturned by the voters anyway. That’s probably why the Senate Coalition Caucus proposal (SSB 5851) takes the relatively safe approach in addressing the McCleary ruling by earmarking two-thirds of future revenue growth for education. That proposal’s avoidance of new taxes will make it very popular among conservatives across the state.
It is doubtful, however, that the Senate plan would meet the Supreme Court’s standard of “regular and dependable tax sources” to achieve constitutional compliance. As pointed out by Kim Justice in the Washington State Budget and Policy Center Blog, the “Senate’s Education Funding Plan Doesn’t Add Up":
Legislation proposed by the Senate (SB 5881) to direct two-thirds of all
state revenue growth to education for the next 10 years is another
effort to divert attention away from the real challenges policymakers
face in the years ahead. Rearranging current, inadequate levels of state
funding will not magically produce new resources needed to invest in
a world-class education system and rebuild our state economy. The
proposal would undermine both of those goals by forcing devastating
cuts to health care, public safety, child care, and other important
investments kids need in order to succeed in the classroom.
The problem of providing new resources is perhaps the greatest challenge that faces our state in the coming decade. In a January 2014 presentation, David Schumacher, director of the Office of Financial Management, made the statement that current state sources of revenue aren’t sufficient to support existing state commitments into the future, much less add the significant costs called for in the McCleary decision. The chart below is the basis for that statement showing a decline in state revenue as a percent of personal income from 7% down to a projection of well below 5% by 2017.
The chart doesn’t show something Schumacher stated in the presentation, that the rate was consistently 7% going back decades prior to 1983. Some of the decline is due to our weak economy, but the long-term decline illustrated in the graph is due a change in our economy moving away from goods sold in stores and toward more services and internet sales that don’t currently generate sales tax.
Just adding sales tax to those elements of the economy isn’t the answer, because our tax base already creates one of the most regressive tax structures in the nation. Getting our state back on a strong economic footing with the costs more equitably dispersed, will require new sources of state revenue. In a recent post on the Economic Opportunity Institute Blog, Marilyn Watkins offers such a plan: “It’s Time: a 3-Step Path to Funding the Education We SHOULD Have.” I would encourage everyone in the state to read this article.
This is a pivotal time in our state’s history and our citizens could ultimately determine whether we become a system in decline or one that thrives in the new economy. Hopefully, voters and legislators alike will be able to rise above limited self-interest and seek the greater good in the critical decisions that lie ahead.