February 26, 2012 in Opinion

Editorial: Legislature needs to find way to fund all-day-K

 

The Spokesman-Review Editorial Board

Members of The Spokesman-Review editorial board help to determine The Spokesman-Review's position on issues of interest to the Inland Northwest. Board members are:

All-day kindergarten works.

The students at Bemis, Holmes, Logan, Regal and Stevens elementary schools, in 2007 the first to offer all-day classes in the Spokane school district, quickly narrowed the literacy gap with other district students entering first grade. Those schools were selected because of the high numbers of households below the poverty level. The program has since expanded to 15 schools in the district, and many others around Washington, as the state works toward full implementation by the 2017-’18 school year.

But with only 17,000 of the 78,000 kindergartners in the state participating to date, Washington has a long way to go. And the state Supreme Court took specific note of that lack of progress in its ruling last month that chastised the state for not meeting its constitutional obligation to fund basic education, its “paramount” responsibility.

In fact, to fully fund all-day-K education, Washington must come up with an additional $176 million per year.

So, where to go for that money? The answer in House Bill 2791 is: out of state.

The legislation introduced this week would eliminate the retail sales tax exemption for purchases made by nonresidents from states or provinces with no sales tax in excess of 3 percent. Idaho residents are not exempt.

A preliminary fiscal note estimates doing away with the exemption would generate about $25 million per year. That money would be specifically set aside for all-day-K.

And what of the impact on Washington merchants just starting to experience an increase in sales?

The fiscal note assumes a slight decline in sales statewide and a larger one in border counties, most notably in Clark County, where stores must compete with those in sales-tax-free Oregon. In Spokane, which sells itself as a cultural and shopping experience to consumers in Montana, British Columbia and Alberta, the question is how much luster will be lost if travelers can’t plan on a sales tax rebate when they get their goodies home.

In testimony on the bill Friday, the Association of Washington Business suggested that relying on revenues as volatile as those from sales taxes makes no sense for all-day-K, which needs steady funding. The association recommended more aggressive enforcement of the use tax on buyers of big-ticket items who shop outside of Washington hoping to avoid the sales tax.

Realistically, $4-per-gallon gas might discourage travel and shopping around the Inland Northwest more than the loss of the sales tax exemption.

Also realistically, repeal of the exemption will take a two-thirds vote of lawmakers. All of the HB 2791 sponsors are Democrats, who may be resting their hope for Republican support on the bipartisan repeal of a mortgage interest-related business and occupation tax deduction for out-of-state banks. But it’s easier to pick on a New York banker than a Montana rancher.

Spokane-area schools and the low-income students they educate are major beneficiaries of the all-day-K program. If terminating the sales tax exemption is not going to help pay for its statewide implementation, the answer is …


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