Democratic state Rep. June Robinson, standing, talks with fellow Democratic budget negotiators, Reps. Kristine Lytton and Timm Ormsby, seated right, and staff in the House wings before heading into a meeting to brief fellow lawmakers on the details of a state budget deal, Thursday, June 29, 2017, Olympia, Wash. A new two-year budget must be signed into law by midnight Friday in order to avoid a partial state government shutdown. (AP Photo/Rachel La Corte) Rachel La Corte AP
Democratic state Rep. June Robinson, standing, talks with fellow Democratic budget negotiators, Reps. Kristine Lytton and Timm Ormsby, seated right, and staff in the House wings before heading into a meeting to brief fellow lawmakers on the details of a state budget deal, Thursday, June 29, 2017, Olympia, Wash. A new two-year budget must be signed into law by midnight Friday in order to avoid a partial state government shutdown. (AP Photo/Rachel La Corte) Rachel La Corte AP

Local

Budget deal raises the state property tax to pay for school overhaul

By Melissa Santos

msantos@thenewstribune.com

And Walker Orenstein

worenstein@thenewstribune.com

June 29, 2017 05:50 PM

UPDATED June 30, 2017 08:24 AM

State lawmakers have agreed to raise the statewide property tax to help pay for about $7 billion in investments in public education over the next four years.

The details of the new spending plan trickled out Thursday afternoon in a series of impromptu briefings between reporters and top legislative leaders.

While lawmakers had yet to release a detailed breakdown of their budget plan, they told reporters Thursday that at least half of the $7 billion for schools would come from an increase in Washington’s property tax.

Budget negotiators gave different figures but said the property-tax increase would be either 81 cents or 82 cents per $1,000 in assessed value.

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That’s much less than an earlier property-tax increase proposed by Republicans, who control the state Senate. Yet the increase is much higher than what Democratic House leaders wanted. Democrats originally suggested no increase in property taxes.

The tax money would help pay for a series of school reforms that lawmakers outlined in a separate plan released Thursday.

The compromise plans aim to address the state Supreme Court’s 2012 McCleary ruling, which said Washington state was failing to meet its constitutional duty to fully fund basic education.

The court has said the state has relied too much on local school district property taxes to pay for school employee salaries. The court said those salaries are basic education costs that should be borne by the state.

To address that issue, the budget agreement would cap local school district property-tax levies at $1.50 per $1,000 in assessed value, or $2,500 per pupil. Many school districts currently have levy rates much higher than that.

Sen. John Braun, R-Centralia and the lead Senate budget writer, said the levy cap, along with the new property tax, would help ensure even and equitable funding across the state’s 295 school districts.

“I think this is a good, solid budget and K-12 solution that basically brings equity to the state of Washington,” Braun said.

He added: “I think you can see there we worked very hard to make this fair across the state.”

State Rep. Timm Ormsby, the budget writer in the state House, said he’s happy that the budget agreement didn’t cut other state services to help pay for education. Ormsby, D-Spokane, pegged the total spending level in the budget at somewhere between $43 billion and $44 billion over the next two years. More specific numbers weren’t available late Thursday afternoon.

“I’m very comfortable with the spending side,” Ormsby said. “I’m glad we figured out a way to pay for it.”

Ormsby said the plan includes some property-tax relief for seniors, a population that some Democrats worried would be hit hard by the earlier proposal from Republicans. Under the compromise plan, property taxes would go down in some areas but rise in others, including high-cost cities like Seattle, Bellevue and Mercer Island.

The budget also includes a plan to collect roughly $1 billion in taxes in the next four years from online shoppers by imposing new rules on online retailers such as eBay.

Several tax loopholes are set to close, including one for bottled water and another that benefits the oil industry, said Democratic Sen. Kevin Ranker, a budget negotiator from Orcas Island. Democrats have wanted to end those loopholes for years.

Business and Operations tax rates would also be lowered for many manufacturers to the preferential rate Boeing receives, Ranker said.

Ranker described the budget as relying on a GOP tax plan to pay for Democratic priorities, such as keeping money for mental health and family planning services.

Raises for state workers negotiated between Democratic Gov. Jay Inslee and employee unions will be paid for under the budget plan.

Senate Republicans had lobbied to reject the worker contracts in favor of smaller raises, but House Democrats wanted them approved.

In the school-funding overhaul, lawmakers also agreed to a slew of changes in how the state pays teachers and other school employees. The changes will take effect by the 2019-20 school year.

For teachers, the average the state pays for a teacher will go up by $10,000, while the average the state allocates for an administrator will go up about $33,000. The state will pay an average of $12,600 more for classified staff positions, too. Lawmakers are providing additional money on top of those allocations for staff in school districts with high costs of living.

There are still plenty of remaining question marks in the budget, including whether upgrades to the mental health system are planned.

Reforming Western State Hospital, the psychiatric facility in Lakewood, has been a priority for both parties. Lawmakers hope to improve patient care and comply with federal regulators who have threatened to pull millions in federal dollars, in part due to safety concerns.

Melissa Santos: 360-357-0209, @melissasantos1

Walker Orenstein: 360-786-1826, @walkerorenstein