Inslee signs improvements for schools, ends five-year struggle over funding

OLYMPIA – The controversy over how much Washington should spend on its public schools – and where to get that money – may be nearing an end after roiling state government for five and a half years.

Or maybe not. In the coming months, the Washington Supreme Court will have to decide whether legislation the Legislature passed as time was running out last Friday and Gov. Jay Inslee signed Thursday will meet the state constitution’s mandate to treat the education of its children as its top duty.

“We have met our constitutional, moral and familial obligation,” said Inslee, surrounded by schoolchildren, legislative leaders, lobbyists and state Superintendent of Public Instruction Chris Reykdal. “In the years to come … we’re going to know that today we’ve done the right thing.”

Starting salaries for teachers and other certified school employees will go up. Teachers will have three paid professional learning days and expanded mentoring programs. Those who work in low-income areas will make more, as will those who teach in districts where it is expensive to live. The state will spend more on students in special education, those who are gifted and those who don’t speak English as their first language. Class sizes will be reduced, and more emphasis will be placed on training for jobs that don’t require a college education.

The mandate, which came to be known as the McCleary decision after the lead plaintiff in the landmark lawsuit, dominated legislative discussions ever since it was handed down on the eve of the 2012 session. Much of the debate centered on the enormous cost and whether the state would have to overhaul the way it decides how much money to send to each of Washington’s 295 school districts.

There also were debates, sometimes acrimonious, about the separation of powers. Some conservative Republicans argued the court was overstepping its bounds in telling the Legislature to spend money a certain way. In response, they sometimes suggested overhauling the court itself, although such proposals were more talking points than serious policy.

The price tag for the legislation Inslee signed Thursday: $7.3 billion over four years, which is on top of the $20.1 billion the state already spends on its schools.

To get that money, lawmakers passed and Inslee signed a major revision to the property tax system. Right now, Washington levies a statewide property tax of $1.88 per $1,000 of assessed value, and each school district is allowed to levy a separate property tax for maintenance and operations, limited through a complicated formula and subject to regular voter approval. A district gets a share of the state money based on a formula that involves enrollment, and all of its own levy.

Because the economy differs dramatically across the state, from the booming Puget Sound to rural communities still struggling through a recession, property values vary widely. Districts in booming communities raise more money with low local levies; those in poorer communities raise far less with levy rates three or four times higher.

Under the new law, the state levy will go to $2.70 next year. School district levies will come down the year after because of the time lag needed to adjust local property tax levies. Because of that lag, nearly all property owners can expect to pay a higher property tax bill next year.

In much of Eastern Washington and other rural areas, many property owners will pay less in property taxes by 2019. In the Spokane Public Schools district, legislative budget analysts estimate the property tax on an average-priced home will go up $130 in 2018, but be $80 less than it would have been under the old system in 2019. The shifts vary widely across the districts, with some smaller districts seeing increases each year and the larger districts seeing reductions in some or all three years after 2018.

Some Puget Sound communities, however, will see big jumps all four years. The average-priced home in the Seattle School District, for example, would see a jump of $460 next year, and increases over the current system of between $420 and $550 in the the next three. In the Mercer Island School District, the projected increases are between $970 and $1,280 for the average home.

In arguing for a shift in the property tax levy system, Senate Republicans said a property owner probably doesn’t pay as much attention to who is assessing what levy as much as the bottom line on the property tax, and many property owners will get a reduction.

House Democrats fought the levy shift for months, arguing that not all property owners in Puget Sound communities are wealthy, and for the low and middle income, this was a regressive tax that will fall heavily on them. But their proposals for taxes they considered more progressive, including a capital gains tax on people with high amounts of investment income or a graduated real estate excise tax, never had enough traction.

In the end, lawmakers settled for what Sen. Andy Billig, D-Spokane, a member of the team negotiating the McCleary solution, called “Democratic priorities with Republican revenue sources.”

At Thursday’s signing ceremony, all sides talked of victory in the effort to meet the court’s mandate.

Senate Ways and Means Committee Chairman John Braun, R-Centralia, called the law a comprehensive, bipartisan plan, and its signing “a historic day.”

House Majority Leader Pat Sullivan, D-Covington, echoed those sentiments, adding: “There were days when we thought we would not get here.”

Inslee, who repeatedly said over the last six months there were better ways to get more money for schools than with a property tax shift, didn’t mention those objections before signing. Instead he talked of reaching a milestone, and a McCleary summit.

“Finding a way to finance schools is tough sledding,” he said.

There is, however, one more summit in the McCleary mountain chain. A legislative committee must prepare a report on the legislation that was passed and signed, what it’s designed to do, how that squares with the 2012 ruling, and submit it to the court.

The court will have the ultimate say, probably sometime this fall, on whether it meets that constitutional obligation of providing for the education of Washington children as the state’s paramount duty, or requires more work.