The gazillion-dollar question: How much money does Washington's state government really need in 2013-2015?
The follow-up question: Where's that money gonna come from?
Those two questions could tie up the state Legislature for months. In fact, numerous other questions are spinning off from these two. Washington faces a complicated budget shortfall for 2013-2015 — the bulk due to the need to fix the state's education funding woes. That because the Washington Supreme Court ruled a year ago that the state is not meeting its constitutional obligation to adequately fund education — a problem that Gov.-elect Jay Inslee, legislative Democrats and legislative Republicans have different ideas on how to fix.
When the legislative session begins Jan.14, several factors will come into play as the Legislature deals with its latest budget crisis. Here is a rundown:
- Without considering any education matters, the state's 2013-2015 operating budget is expected to be in the $33 billion to $34 billion range with revenues initially expected to be about $900 million to $1.375 billion short of expenses. Inslee's proposed 2013-2015 operations budget has not been unveiled yet.
- Republicans and Democrats cannot agree on how much the state should do to meet the state Supreme Court's education ruling. Republicans are looking at roughly $924 million worth of education fix-it work in 2013-2015. Democrats are looking at $1.4 billion to $1.6 billion worth. Democrats want to tack on more money for teachers' and administrators' salaries than Republicans do. Plus they want to allocate more funds than Republicans to adding more class hours and high school credits. The Republicans' stance is that the Democrats want to spend more money than the Supreme Court requires. Inslee has not yet unveiled his education fix-it plan other than arguing that an improved economy can take care of the problem.
- Higher education lurks as another costly problem — one without help from a Supreme Court ruling. Tuitions are climbing and Washington students are being shut out from state colleges. Meanwhile, Rep. Larry Seaquist, D-Gig Harbor and chairman of the House's Higher Education committee, is working on an estimate of what the state needs extra to fix higher education. An actual figure won't be ready until mid-January, but Seaquist speculated it could be around $625 million.
Seaquist argued that higher education — four-year colleges, community colleges and tech schools — is a much-needed part of curing Washington's economic woes. And citing 2009 figures from the international-oriented Organization for Economic Co-Operation and Development, Seaquist contended Washington lags behind the world and the rest of the United States in post-high-school degrees. Many industrial nations have at least 40 percent of their young adults— ages 25 to 34 — holding post-high-school degrees with Canada, South Korea and Japan breaking the 50 percent mark. The U.S. figure is 40.4 percent and Washington's figure is 40 percent for that age bracket.
Seaquist finds it significant that 38.5 percent of Americans ages 55 to 64 have post-high-school degrees, while 44.6 percent of Washingtonians in the same age group have post-high-school degrees. Washingtonians in the 35-to-54 age brackets have post-high-school-degree percentages of 41.3 percent to 43.6 percent. Seaquist's bottom line to increase higher education dollars is that Washington's adults 25 to 34 are less likely to have post-high-school degrees than the state's older adults. This is the reverse of the trend in the industrial nations analyzed by the OCED.
- Rumblings are emerging about a possible need to add one extra 144-car ferry beyond the two already on the state's construction books. A 144-car state ferry is currently being built for $147 million.
- Legislative Democrats argue tax increases are needed. Inslee and legislative Republicans have ruled out any tax increases, although Inslee has not specifically ruled out eliminating tax cuts due to expire soon. If education gets top priority, that leaves health, social services, natural resources and corrections to absorb hundred of millions of dollars worth of cuts under a no-new-taxes approach.
Democrats have floated trial balloons of taxes on carbon emissions, capital gains, gum, candy and soda and a wholesale fuel sales. A 5 percent capital gains tax on more than the first $10,000 in earnings could raise $650 million to $1.4 billion a year. Expiring taxes that could be renewed include a beer tax, a hospital beds tax and a 0.3 percent business and occupation services surcharge — measures that could raise $650 million to $912 million a year.
Like what you just read? Support high quality local journalism. Become a member of Crosscut today!