Gov. Inslee criticized for not addressing local levies in proposed Washington state budget

Government And Institutions Associated Press

When the Washington Supreme Court told the Legislature it needed to fix the way the state pays for public schools, it also ordered lawmakers to stop relying so much on local levy dollars to pay for basic education.

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Levy reform has been a topic of discussion at every legislative session since the 2012 Supreme Court decision in the McCleary case, but Gov. Jay Inslee sidestepped the issue when he announced his education budget plans last week.

Superintendent of Public Instruction Randy Dorn says the governor is pushing the state toward a constitutional crisis by not addressing levy reform. The court held the Legislature in contempt earlier this year and said sanctions would be coming if lawmakers do not make significant progress on the issues in the school funding lawsuit.

As Sen. Bruce Dammeier, R-Puyallup, and others point out, the Supreme Court clearly made overreliance on local levies a major point of the McCleary decision.

"That's one of the huge inequity problems we face," Dammeier said. "We have to do some levy reform."

The governor said he chose not to tackle levy equalization this year because he felt his proposals would help equally both big and small school districts and offer some extra money for struggling districts in low income areas.

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"There's going to be a large something for everyone and there will be targeted additional things on top of that for struggling schools," Inslee said. "I think that's the right way to go forward."

The local levy system is complicated and political.

The main issues involve disparity among property values across the state and a lack of consistency in how much that property can be taxed by local school districts.

Previous attempts at making the system more equitable have not succeeded because some districts had special agreements grandfathered in and some districts, like Seattle or Bellevue, have more taxing power than most other places in Washington.

Proposals for fixing the system have been floated in Olympia. Most involve some kind of switch from local levies to a state property tax for education, with cash being redistributed in a more equal way.

The chief House budget writer has proposed raising property taxes across the state and moving about a billion dollars of property tax income under state control. As Rep. Ross Hunter, D-Medina, explains it, the money would become part of the state's regular school budget and would help struggling districts get more dollars while not hurting those who have a better tax base.

School districts were supposed to use local tax levies to pay for "extras," like supplemental programs. But because state dollars have not covered all the basic needs of school districts — the impetus for the McCleary school funding lawsuit — districts have been using levy dollars to pay for some salaries, student transportation and other costs of basic education.

Dorn and Sen. Steve Litzow, R-Mercer Island, warn that levy reform is more complicated than equalizing the tax structure. It would also involve fixing the way teachers and other school employees are paid, because some levy dollars make up the difference between the state allocation for teacher salaries and pay rates in local teacher contracts.

Dorn estimated that nearly 30,000 school employees are completely paid through levy dollars, including extra teachers, librarians, para-educators and others. If the state needs to pay the entire cost of every teacher and required staff member, plus give raises to everyone, as the governor has recommended, that will add hundreds of millions of dollars to the state budget.

Dorn's own estimate for the full-cost of the McCleary decision — including both the most commonly mentioned items of all-day kindergarten, smaller classes in the early grades, and transportation and supply costs, plus a new salary and levy system — is $7.2 billion over the next four years.

That's about twice the more common estimates being thrown around Olympia, but not everyone is folding in the things local levies pay for.

Litzow promised levy reform and teacher salary issues would both be resolved during the upcoming legislative session, which begins in January.

"We will have a solution done this year," Litzow said. "We have to."