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Washington Gov. Jay Inslee wants to raise taxes and funnel nearly $4 billion more into schools over the next two years

TUESDAY, DEC. 13, 2016, 12:44 P.M.

In this photo taken Sept. 8, 2016, Gov. Jay Inslee smiles as he visits with children at an elementary school in Seattle. (Elaine Thompson / AP)
In this photo taken Sept. 8, 2016, Gov. Jay Inslee smiles as he visits with children at an elementary school in Seattle. (Elaine Thompson / AP)

OLYMPIA – Gov. Jay Inslee wants the state to pay almost $4 billion more for public schools in the next two years and would raise some taxes to pay for it.

Most state residents, however, would see a drop in their property taxes.

In the opening salvo of next year’s legislative battle over how much more to spend on schools and how to pay for it, Inslee unveiled his education budget Monday, proposing significant raises for teachers and other school staff as well as more training and assistance to educators and students.

His proposals also would provide the money for enough teachers to reduce class sizes statewide to no more than 17 students per class in kindergarten through third grade, and to and provide counselors in every school as required by a statewide initiative.

The total price tag: $3.9 billion for the state’s two-year budget, which covers July 1, 2017, to June 30, 2019.

Inslee called it a budget that will “realize our opportunity and our obligation,” adding it was “time to end the 30 years of underfunding education.”

Senate Republicans, who have the next shot at writing a state budget, were quick to denounce the tax increases. Senate Majority Leader Mark Schoesler, R-Ritzville, likened it to the movie “Groundhog Day” because Inslee previously has proposed tax increases in his budget that don’t pass the Legislature.

“But this dwarfs any tax increase we’ve seen in our careers,” Schoesler said. He also questioned why Inslee didn’t mention “the mother of all tax increases” during his recent re-election campaign.

Starting pay for teachers would rise to $54,587. The state currently pays $35,700 for a starting teacher’s salary, but some districts add local money to that, and the most a starting teacher makes is about $49,000.

“We want the best and brightest going into education, not just (going to) Microsoft or Amazon,” Inslee said.

School funding will dominate the upcoming legislative session. Washington is under orders from the state Supreme Court to live up to a constitutional obligation to adequately fund education. The court issued that order in January 2012, with a timeline that called for all changes to be in place by the 2018 school year. The budget the Legislature must pass and Inslee must sign in 2017 will cover that school year.

The court ruled that the state isn’t paying enough for certain elements of basic education, including the bulk of school salaries, and many districts were using money raised by their own local property taxes to cover some of those costs.

Inslee wants to reduce and put a limit, or cap, on districts’ property tax levies, which would give about 3 out of 4 property owners in the state a tax cut. The rest would not see an increase, according to figures released by the governor’s budget staff.

But all districts would have more money. That money, Inslee proposes, would come from an array of new taxes, increases in current taxes, or the elimination of tax exemptions – many of which have been proposed before but never passed. Included in the proposed tax package would be:

Raising the business and occupation tax on service businesses – which include attorneys and accountants – to 2.5 percent of gross receipts from the current 1.5 percent.

Imposing a 7.9 percent capital gains tax on investment profits above $25,000 for a person or $50,000 for a couple. All profits from the sale of residences would be exempt.

Imposing a tax on carbon pollution from gasoline and other fossil fuels, starting at $25 per ton in 2018 and increasing by 3.5 percent plus inflation every year.

Applying the sales tax to bottled water, currently exempt from that tax. People who have a medical prescription for bottled water or don’t have drinkable water would get a refund.

Requiring people from states currently exempt from the sales tax to pay it at the cash register, then apply for a refund later for certain purchases.

Limiting the sales tax exemption for vehicle trade-ins to $10,000 for the value of cars, boats, recreational vehicles and other items.

The Senate, where a coalition between Republicans and a conservative Democrat creates a one-seat majority, will write the next iteration of the budget. “I don’t expect you’re going to see his package as part of our package,” said Schoesler, the Senate majority leader.

Sen. Mike Padden, R-Spokane Valley, also sits on the Ways and Means Committee where spending and tax decisions are made. He called the prospects for such a large tax increase “very slim” and predicted the final budget will look very different.

“I don’t know that there’s ever been a governor’s budget that’s been adopted,” Padden said. “It’s a starting point.”



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