Washington school funding shaping up as partisan tax duel

The duel over how to fund Washington education improvements will be fought between Democrats wanting to boost tax revenues and Republicans eyeing the trimming of some social programs.

That's the bottom line that emerged Monday as a bipartisan task force recommended 6-2 to take a Democrat-conceived approach to the legislature — with both of its attending Republican members dissenting.

The job of the task force — four Democratic legislators, four Republican legislators and three people appointed by Gov. Chris Gregoire — is to figure out how the state can comply with a Washington Supreme Court ruling that the legislature needs to spend more to meet its constitutional obligation to fund education. Two huge issues split Republicans and Democrats — taxes and how much extra money is actually required.

Democrats put forward a long list of options for raising extra education money. In broad strokes, the Democratic proposal calls for:

1. Tapping the state's rainy day fund for $250 million to $300 million.
2. Trimming up to $300 million from the overall 2013-2015 budget.
3. Stopping an annual $650 million to $800 million worth of sunsetting taxes from expiring. The expiring taxes include a beer tax, a hospital tax and a 0.3 percent business and occupation service surcharge. However, a retained hospital tax might also be considered for a proposed expansion in the state's Medicaid program.
4. Eliminating up to $250 million in annual tax exemptions.
5. Instituting a capital gains tax on more than the first $10,000 in earning, which is projected to raise $650 million to $1.4 billion a year.
6. The Democrats also repeated an earlier proposal to have the transportation fund pay for $143 million to $930 million a year from the state's transportation fund — a proposal criticized earlier for forcing the Senate and House transportation committees to scrounge for the extra money instead.
7. Potential revisions on state property tax levies — including a levy swap with local school districts — which could raise raise anywhere between a handful of cash and $2.6 billion.

House Majority Leader and task force member Pat Sullivan, D-Covington, said the recent alliance of the Senate's 23 Republicans and two maverick Democrats gives the no-new-taxes forces a slight majority in the Senate. Consequently, he said, the task force should put several options on the table as an opening negotiating move to find extra money.

The House Republicans on the other hand, called for fully funding the Supreme Court's education requirements through cuts to social programs and without increasing tax revenues. The legislature can debate in the upcoming session whether extra taxes would be needed to fund low-priority social programs whose money would be transferred to education, said Rep. Gary Alexander, R-Olympia and a task force member. Alexander is the House Republicans' chief budget writer.

Despite Democrats pushing him for details, Alexander would not mention specific cuts during the meeting "I have a plan [for funding education] to ensure we protect the most vulnerable of the population," he said.

During a break in Monday's meeting, Alexander said the Republicans' lowest budget priorities — those they'd most-likely target for cuts in the upcoming session — include natural resources, Temporary Assistance to Needy Families, Basic Health, Disability Lifeline and housing programs. Alexander criticized the Democratic proposal as a laundry list of ideas with no actual funding recommendation. Passing most or all of that list, he said, could lead to more increased taxes than are required to fund education improvements.

For their part, Democrats criticized the Republican proposal as not addressing the funding shortfall at all. Task force member Sen.David Frockt, D-Seattle, described Alexander's stance as "I have a secret plan."

"I didn't see a [Republican] proposal [that outlined] where the cuts would happen," Sullivan said. "The caucus not here today is the caucus that has already ruled out any new revenue proposals." Sullivan was referring to the Monday absence of Senate Republican task force members, Sen. Steve Litzow, R-Mercer Island and new chairman of the Senate Education Committee, and Sen. Joe Fain, R-Auburn.

Task force members voting for the Democratic funding options approach were Sullivan; Frockt; Sen. Lisa Brown, D-Spokane; Rep. Marcie Maxwell, D-Renton; Highline Schools Superintendent Susan Enfield and Mary Lindquist, president of the Washington Education Association. The no votes were Alexander and Rep. Susan Fagan, R-Pullman. Besides Fain and Litzow, the task force's chairman, businessman Jeff Vincent, was absent.

Meanwhile, Republicans and Democrats also disagree about how much money actually needs to be raised to pay for the Supreme Court's requirements.The Democrats' plan would tack on extra money for teachers' and administrators' salaries and evaluating progress over the next six years. Democrats would also allocate more money than Republicans to adding more class hours and high school credits, as well as building and supplies costs.

The two parties laid out their plans for allocating money each biennium in an apples-and-orange comparison because of their different approaches to calculating what is needed.

• 2013-2015: Democrats proposed to raise $1.603 billion, with cuts elsewhere, shifting costs to the transportation fund and raising new revenue. Republicans propose to raise $924 million through cuts outside of education.
• 2015-2017: Democrats propose to raise $3.335 billion through cuts elsewhere, shifts in transportation costs and finding new revenue. Republicans propose to raise $1.353 billion through cuts outside of education.
• 2017-2019: Democrats propose to raise $4.255 billion through cuts elsewhere, shifts in transportation costs and finding new revenue. Republicans propose to raise $1.221 billion through cuts outside of education.

Both parties proposed giving all-day kindergarten and improved teacher-to-student ratios in Grades K-3  top funding priority.

The legislature already faces a predicted $900 million shortfall in non-education programs for 2013-2015. That translates to Democrats believing on Monday that they have to tackle a $2.5 billion total shortfall in the upcoming session, and Republicans believing Monday that the total shortfall is $1.8 billion.

The 2013-2015 overall state operating budget has been predicted to be roughly $33.3 billion with no growth in non-education programs, compared to $31.2 billion — including $13.65 billion for K-12 education — in 2011-2013. Gregoire is scheduled to unveil the formal governor's 2013-2015 budget proposal Tuesday morning.