Education Washington State Politics

Four Reasons the Washington Supreme Court is Likely to Call the Legislature Back for a Fourth Special Session

Beginning at 9 am on Tuesday, July 21, 2015, leaders of the State legislature will hold an all day meeting at Room 1 of the Bellevue Public Library to discuss how to convince the Supreme Court not to levy sanctions against them for failing to comply with a 2012 Supreme Court Order to make adequate yearly progress towards fully funding our public schools. If you want to see this hearing in person (or stage a protest), you will need to get their early because the room only holds 135 people. There is also limited parking at the Bellevue library. Sadly, the event is not being televised on TVW.

No one knows for sure what the Supreme Court is actually going to do. But a recent informal survey of legislators found that nearly all of them think that they did not comply with the Supreme Court Order and nearly all of them think that the Supreme Court is going to call them back into a fourth Special Session. One likened the situation to a child who failed to complete their homework assignment and the parent or teacher (the Supreme Court) having no other choice but to force the child to stay in and complete their homework before the child is allowed to go out to play. In this article, we will explain why the Supreme Court is likely to call the legislature back into session and what may happen when they do.

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Reason #1… Try to Avoid a Statewide Teachers Strike
Some believe that bringing the legislature back into session may be the only way to prevent a statewide teachers strike this fall. Certainly the Supreme Court must be aware that teachers are not happy with the lack of funding. Thousands of teachers staged a series of “rolling walkouts” just a few weeks ago. For those who may not know, despite the fact that Washington is the only state in the nation with a constitution that describes school funding as the “paramount” or most important duty of the state legislature, Washington State has fallen from 11th in the nation in school funding to 47th in the nation in school funding as a percent of income.

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As a consequence, class sizes in Washington state are among the highest in the nation and struggling students are not getting the help they need to succeed in school.

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Teachers in Washington State are working harder for less pay than any nearby state. Teachers have been waiting years for the legislature to restore full school funding and lower class sizes. Their patience is wearing thin. They are particularly upset that the 2015 legislature failed to even discuss how to fund Initiative 1351 – the initiative approved by the voters to lower class sizes in all grades. Instead, the legislature continued their policy of giving away about $30 billion per year in tax breaks to the wealthy as their paramount duty. If the Supreme Court fails to act by calling the legislature back into special session, it is likely that teachers will take the matter into their own hands by launching a statewide teachers strike. After years of excuses and broken promises by the state legislature, it would be hard to blame teachers for finally forcing the issue.

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Of course, parents and kids would be caught in the crossfire if a statewide strike were to occur. But our kids are already victims of extremely overcrowded classes. So many parents are likely to agree with and support the strike. Teachers and parents need hope that school funding might be restored. A Supreme Court order forcing the legislature back into special session in August might give them that hope.

Reason #2… Failure to Restore at least National Average School Funding and National Average Class Sizes
Six years ago, back in 2009, the legislature passed a bill promising to restore national average school funding by the 2018 school year. In 2012, when the Supreme Court ordered the legislature to restore full school funding, the Court ruling specifically ordered the legislature to come up with a plan to provide funding for the legislature’s promise and to make adequate yearly progressive towards this full funding. While the legislature likes to say they have provided more than one billion dollars in additional funding, the truth is that the additional funding barely covers the school funding cuts they have made in recent years. It would take an additional two to three billion dollars per year to provide the funding required by the law the legislature has already passed. While the legislature has taken years to restore one billion dollars in school funding, they took only three days in November 2013 to pass a bill giving Boeing an additional $9 billion in tax breaks – the largest tax break in the history of the world. So the Supreme Court is skeptical of the claim by the legislature that they just can not find the money to fully fund schools.

In September 2014, the Supreme Court found the legislature in “contempt of court” for the first time in state history for failing to come up with a plan to fully fund basic education as it was defined by the legislature back in 2009. The Supreme Court ordered the legislature to come up with a funding plan in the 2015 session or “additional sanctions” might be applied. The legislature did not come up with a funding plan in the 2015 session and thus nearly everyone in the legislature is now expecting “additional sanctions.”

There was only one bill introduced in the 2015 session that would have supplied more than two billion per year to fully fund schools and Initiative 1351. That was Senate Bill 6093 by Senators Chase and McAuliffe which repealed the single largest tax break that benefits mainly billionaires – the intangible property tax break. But the bill did not even get a hearing. There was a bill in the House that would have provided a couple hundred million additional dollars in school funding by adding a capital gains tax. But a vote was never taken on this bill. In addition, it would not have come close to providing the billions needed to restore school funding and fund Initiative 1351.

The House did at least try to come up with yet another committee to study how to fund the public schools with House Bill 2239 – but the Senate refused to consider the bill. (In the interest of full disclosure, I was the one person who spoke against this bill. I said that the legislature needed to stop kicking the can down the road.
http://lawfilesext.leg.wa.gov/biennium/2015-16/Pdf/Bill%20Reports/House/2239-S.E%20HBR%20APH%2015%20E2.pdf

Reason #3… Some Legislators Believe that the “Deal to Get out of Town” was Unconstitutional
The last minute deal to get out of town, also known as House Bill 2266, delayed funding lower class sizes and Initiative 1351 for six more years to the year 2021. This was the bill that caused the 5 am meltdown in the State Senate that forced a Third Special Session after a few brave Senate Democrats refused to vote for it. Their 5 AM speeches are really worth listening to. Senator Frockt openly admitted that “In the past six months, we haven’t even had a discussion about how to fund Initiative 1351.” What Senate Democrats were asking for was to at least have a discussion about how to fully fund our public schools. This video, available from TVW, may become Plaintiffs Exhibit #1 at the next Supreme Court hearing.

While lower class sizes were partially funded for grades 1 through 3, no one in Olympia seriously believes that the benefits of lower class sizes end at the Third Grade. The Supreme Court is not likely believe it either. While House Bill 2266 does save $2 to $3 billion per year by delaying Initiative 1351 and lower class sizes for 6 more years, the problem is that the Supreme Court has made it very clear that the legislature is not allowed to just keep kicking the can down the road. The legislature is also not allowed to delay school funding simply for budgetary reasons and simply to “get out of town.” So the Supreme Court may not like the deal to get out of town and may order the legislature to “come back to town” and find a way to restore full funding for public schools. One legislator said that the lack of progress on school funding by the 2015 legislature was “embarrassing.” Teachers and parents might chose a different adjective.

Reason #4… Failure to Address the Reliance on Local Levies to Fund Schools
The other thing the Supreme Court ordered the legislature to eliminate was the reliance on local property tax levies and local property tax bonds to fund school construction and operation. The problem with using local levies and bonds to build and operate schools is that some school districts, such as the Bellevue School District, are property rich and can pass local operating levies and school construction bonds while other school districts are property poor and cannot pass such levies and bonds. This leads to a two tier system of rich schools and poor schools which violates a section of our state constitution which requires a “uniform” system of public schools.

The legislature did not hold hearings to address the school construction problem – which is a multi-billion dollar problem and getting worse every year it continues to be ignored. But they did at least hold one hearing on how to address the school operating levy violation. The problem is that the Supreme Court ordered the legislature to do more than merely hold a hearing or form a committee on the unconstitutional use of local levies to fund schools. The Supreme Court wanted an actual solution that would stop this practice. The logic is going to be that if the legislature can hold a special session to give billions in tax breaks for Boeing, then they can be ordered to hold a special session to restore school funding an address the local levy problem and come into compliance with the State Constitution.

What is Likely to Happen if there is a Fourth Special Session
As noted above, there are two major problems the legislature has not addressed. The first is a plan to come up with billions of dollars per year to restore school funding to at least the national average. The second is to reduce the reliance on more than one billion dollars per year in local levies to fund basic education. The talk among legislators is that Republicans might have to bite the bullet and agree to the capital gains tax. But in trade, they are likely to demand that Democrats agree to pass a Levy Reduction Bill written by Senator Dammeier of Puyallup.

The Dammeier Property tax bill would “swap” one billion dollars in reduced local levy property taxes for one billion dollars in increases state property taxes. The problem with this bill is that the school districts who would lose one billion dollars are mainly in King County and the school districts who would gain one billion dollars are in the rest of the state. To give you just a couple of examples, the local levy rate in Seattle is 1.31 per thousand and would fall to 1.25 per thousand under the levy swap. But the state levy which is now 2.40 per thousand would rise to 3.83 for a difference of 1.37 per thousand. This would mean that a person with a 400,000 home in Seattle would see their property taxes rise by $548 per year while school funding in Seattle would fall by millions of dollars per year. Bellevue and Mercer Island homeowners would get an added hit to their property taxes of $1.43 per thousand. Issaquah would see their total property tax bill go up by 57 cents per thousand. There is an interesting chart that details exactly how the Dammeier Property Tax Transfer proposal would harm various homeowners around the state. About 60% would see their property taxes go up. 20% would see no change and 20% would see a reduction.
https://app.leg.wa.gov/CMD/Handler.ashx?MethodName=getdocumentcontent&documentId=OXN8YhXiTE0&att=false

In other words, thousands of teachers in Seattle would have to be fired while homeowners in Seattle would see their property taxes skyrocket. You can see why the Dammeier Property Tax Swap would not be popular with Seattle Democrats. But it is real popular with Eastern Washington Republicans. For more information on the drawbacks of the Dammeier Property Tax Bill and how it might actually reduce school funding, see the following article.
http://washingtontaxfairnesscoalition.org/latest-news/15-five-drawbacks-of-dammeier-senate-bill-6109-robbing-peter-to-pay-peter

How Many Billion of Dollars are Already Being Transferred from King County to the Rest of the State?
The Washington State Office of Financial Management has calculated how much each county pays in state taxes and how much each county gets in state tax benefits. If homeowners in King County ever got a look at this chart, a riot might break out. Here is a link to the latest OFM report.
http://www.ofm.wa.gov/fiscal/expenditures_and_revenues/county_expenditures_revenues.pdf

King county tax payers contribute $6.6 billion per year and get back $4.3 billion – a transfer of $2.3 billion per year from King County to the rest of the state – and no one in the other counties even says thank you! The Dammeier Property Tax Swap would raise the outflow from King County to the rest of the state up to more than $3 billion per year.

There is another solution… Pass Senate Bill 6093
Instead of dumping an even larger property tax burden on homeowners in King County, the legislature should pass Senate Bill 6093 and repeal the property tax break on intangible property that billionaires use to avoid paying their fair share of state property taxes.

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This bill would not only restore billions of dollars for school funding, but it also eliminates property taxes for nearly all homeowners – saving homeowners all over the state thousands of dollars per year in property taxes – which would allow them to spend more on local businesses to jump start the economy and create hundreds of thousands of urgently needed jobs.

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To learn more about Senate Bill 6093, go to the following link:
http://washingtontaxfairnesscoalition.org

It is not as easy as one might think to come up with an extra three billion to four dollars per year in school operation and construction funding. For those who think that there may be some other option to come up with the billions of dollars needed to restore funding for public schools, in the next article, we will take a closer look at all 8 ways that taxes can be raised in Washington state. As always, feel free to email me with your questions and comments.

Originally published at Coalition to Protect Our Public Schools

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