K12 Funding & McCleary

Transparent Statement:
Changing our tax structure, which includes raising taxes, is the only true solution to fully funding K12 Education.

Have you heard about the Washington State legislature's solution to solving the $1 billion annual shortfall in K12 funding? They are going to study it for another year or two. (Spoiler Alert: No, that is not a solution.)

Some Republicans believe we can just cut other programs in the state budget. But there just is not $1 billion that can be cut from the state budget. Otherwise, it would surely have been cut by now.

The State needs new revenue to fund education. Yes, that means taxes, but only on the top income earners. To truly solve the K12 Education funding crisis, we must implement a Capital Gains Tax and a small income tax on the top 5-10% of wage eaners. Yes, I realize that sucks.

Just about every other state in the nation has both a capital gains tax and income tax. Our state revenue is currently overly dependent on sales tax revenue. But in an economic downturn, such as the "Great Recession" which began in 2008, consumer spending plummets, and with it so does state tax revenue. Eight years later, sales tax revenue is only just now approaching pre-recession levels!

Meanwhile, Wall Street recovers much more quickly. Incomes often recover soon after as businesses start hiring again. But until consumer spending recovers years later, state tax revenue is significantly reduced.

This is a stupid way to fund a government. Diversifying our state tax structure will ensure consistent funding during economic downturns — not just for education, but for all state programs. Otherwise, any funding based on our primary revenue source — sales tax — will plummet once again.

Levy Swap?

Some legislators have suggested a levy swap. Many school districts pass a funding levy, which is a tax based on real estate values. In theory, these levys are intended to supplement state funding to provide for extra's that the state does not pay for. In reality, they provide critical funding to pay for "extra's" like school buildings and teacher salaries.

A levy swap basically means that instead of the school district imposing the levy, the state would take that money and then give it back to the school district, meaning the state would theoretically be providing the funding. Part of the levy funding raised in a higher-income school district could also be redistributed to poorer school districts where the residents have either rejected their own levys or cannot afford them.

This is not a solution either. While I a not opposed to redistributing tax revenue from richer school districts to poorer ones — this is a core tenet of taxation, after all — this does not increase the overall funding for education and does not provide the necessary changes to ensure consistent and full funding in the future.

Funded by Sound Transit?

A little-noticed provision of the 2015b State budget was that the State authorized Sound Transit to propose a ballot levy to fund the 3rd component of the Light Rail system in the Puget Sound region. Sound Transit must receive permission from the State to even ask voters for the levy. The State not only granted their request, but authorized Sound Transit to ask for even more money than they requested.

While this may sound nice, the budget actually requires Sound Transit to spend $500 million on K12 education and affordable housing. In other words, in exchange for permission to even ask voters to support light rail, Sound Transit must ask voters for money not just to fund light rail, but also to help the State fund education and affordable housing. That is a farce. It is certainly not what the Supreme Court had in mind when it held the State in Contempt for not funding education.