OLYMPIA – Property taxes would go down in most of Spokane County but rise in Seattle and some other communities under a $43 billion budget proposed Tuesday by Senate Republicans.
The two-year budget plan generates a net increase of about $1.8 billion through a change in the property tax system and adds that to higher-than-expected revenue the state is receiving from other taxes and fees to pay for public school reforms.
It also calls for most state workers to accept smaller-than-negotiated raises while slightly increasing college tuition and enlarging the number of Washington students that state colleges can accept. It cuts about $96 million from Temporary Assistance to Needy Families through a series of changes to eligibility for that major welfare program, and has a net reduction of $48 million from homeless programs.
“We live within our means and we have paid for everything we spend,” said Senate Ways and Means Committee Chairman John Braun, R-Centralia. “We have $3 billion in new money and we prioritize spending that on education.”
Gov. Jay Inslee said the proposal doesn’t go far enough to improve public schools, removes slots for 3-year-olds in the early childhood education program and cuts vital social programs. With House Democrats releasing their budget next week, lawmakers have “hard negotiations and honest negotiations” ahead, Inslee said.
House Appropriations Committee Chairman Timm Ormsby, D-Spokane, likened the Senate Republican plan to President Donald Trump’s budget because of some policy changes it proposes. Democrats will propose a much different budget that will fully fund public schools, continue improvements in the mental health system and support at-risk youth, Ormsby said.
The budget proposal does not have a new tax or a general statewide increase on existing taxes. But it spells out a shift in property taxes that Senate Republicans proposed earlier this year, eliminating the property taxes local school districts can collect through maintenance and operations levies, and replacing them with a statewide property tax called a “local effort levy.”
Because school district levies vary widely around the state, a single statewide levy would mean some property owners in Seattle and some other Puget Sound communities would see property taxes go up while most districts in most of the rest of the state would see a decrease.
That statewide levy rate is down from their initial proposal, set at $1.55 per $1,000 of assessed valuation instead of the original $1.80 per $1,000. That’s a tax cut for many property owners in districts in Spokane County, where levies range from about $2.10 to $4.20. But it’s a tax hike in Seattle, where the district levy is about $1.22 per $1,000.
The increases in Seattle still would be less than those residents would pay under other taxes Inslee and legislative Democrats have suggested but never brought to a vote, Braun said.
They have to decide which taxes they want to raise, and vote to approve them, he said, “otherwise they’re not serious.”
Inslee countered that Senate Republicans seem to be basing their property tax shift on a theory that all King County residents live in “palaces with five-car garages” and won’t miss the extra money they’d have to pay in taxes. The proposal would hit working families and people on fixed income hard, he said.
King County residents might go along with higher taxes if the money was going to improve their schools, but under the Republican plan, it would be going to schools in the rest of the state, Inslee added.
The top Democrat on that committee, Sen. Kevin Ranker of Orcas Island, said the GOP plan “creates winners and losers” as it tries to shift the state away from the current system which the state Supreme Court has ruled relies too much on local tax money to pay for state obligations on education.
“At some point you’ve got to pay for the investments in education. What they’re saying is they would like to pay for it with property taxes,” Ranker said.
After two years of reduced tuition at the state’s public universities and colleges, the Republican proposal calls for a 2.4 percent tuition increase, which Braun said matches the growth in the state’s median wage. It also would add 1,800 slots for in-state students, with 500 each at Washington State University and the University of Washington, and 200 each at the regional schools and The Evergreen State College. The proposal requires that 70 percent of those new slots go for students seeking degrees in science, technology, engineering or math fields.
The budget also sets aside $30 million for medical school education in Spokane, about $10 million each year for students at the UW and Gonzaga University consortium, and $3 million in the first year and $7 million the second year for students at WSU’s new Elson S. Floyd College of Medicine.
One contentious aspect of the Senate Republican budget is likely to be its rejection of most labor contracts negotiated last year between the unions that represent state workers and the state budget office. Those contracts would give state employees a series of raises over two years, for a total cost Republicans estimate to be $1.7 billion.
Braun argued that turnover in most departments is below national averages and the raises are not “truly necessary.” The Republicans want to approve the contracts for the State Patrol and the Department of Corrections, but offer all other workers represented by unions a $500 increase each year, and covering 85 percent of their medical insurance premiums.
“Education is supposed to be the paramount duty. Why is $1.7 billion going to state employees,” said Sen. Dino Rossi, R-Sammamish. He has criticized the current system of negotiating those contracts as having “an appearance of corruption” because negotiations aren’t public and unions can make campaign contributions to a governor whose staff is representing the state.
Republicans proposed a similar rejection of the negotiated contracts with state employee unions in their initial budget two years ago, with similar complaints about how the process shuts them out and presents the Legislature with a take-it-or-leave-it option on salaries. In the end, however, they agreed to a budget that included the negotiated contracts.
Asked why he thought the strategy would succeed this time, Braun replied: “Sometimes things take more than once.”
But if the Legislature ultimately rejects the contracts, Budget Director David Schumacher said the unions and the budget office would have to return to the bargaining table to resume negotiations. The unions wouldn’t be obligated to accept the offer in the budget.
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