On Monday, I reported on the latest efforts of the Joint Task Force on Education Funding, a bipartisan panel of legislators and citizens formed to address the Supreme Court's McCleary decision. The decision, delivered last year, found that Washington has failed in its constitutional duty to amply provide for the education of children in Washington state. The legislature, it was ruled, must develop a basic education program to meet that mandate — a program that is fully funded through "regular and dependable" tax sources. In response, the 2012 Legislature established the Joint Task Force on Education Funding.
The task force has been meeting since August and has just two more meetings scheduled before it completes its report to the legislature, which is due by December 31. At its most recent meeting on November 20, the panel's chair, Jeff Vincent, issued an invitation to business, labor, and education organizations to submit ideas for consideration. Since we, as taxpayers and citizens concerned about the education of future generations, are all stakeholders in this effort, our ideas, either in the form of public testimony at task force meetings or direct communication with members, should also help shape their report.
As one individual stakeholder who has been following the panel’s deliberations over the past four months, and the state tax structure debate for a much longer time, here are a few ideas they might consider when they draft their report.
- Focus tax and spending recommendations on the education budget and not the larger general fund budget.
The task force should not try to guess what the next and subsequent legislatures will be asked to fund and cut. Suggesting even token cuts in programs like health and human services is problematic, when cuts in those and other areas in the last two biennia have already been have been so significant and detrimental to those programs, totaling approximately $11 billion. Staff to the task force reviewed these recent budget cuts at the November 20 meeting.
The assumption that funding of other programs will continue at current levels is also questionable. If economic recovery begins to pick up speed, it can be expected that constituencies like higher education will push for a return to higher funding levels.
Then there is the uncertainty hanging over general fund revenue projections. At last week's meeting, the task force assumed that general fund revenue will grow annually by 4.5 percent. This may have been the average in the recent past, but we are now in a recessionary period and revenue growth will likely be much less. It's possible that revenue may even decrease, as it did in 2009 and 2010.
Developing economic and political issues in China, Europe and the other Washington could all result in decreased state revenues, as the Economic and Revenue Forecasting Council emphasized in a September report. The impending “fiscal cliff” and “sequestration” negotiations will have major importance to the state; particularly given the significant military component of Washington’s economy and our dependence on federal program grants.
2. Describe in detail all important K-12 enhancements, including their costs, benefits and phase-in schedules.
The public will have to be sold on the need for increased education spending. This was reinforced by the comfortable passage of Initiative 1185, which re-established the super-majority rule for tax increases. The report should provide ample evidence that enhancements to current educational practices will actually improve educational outcomes, and that there will be tracking in place to ensure that progress is made.
This will be especially important for enhancements that go beyond what is already required, as defined by a 2010 bill (HB 2776) that defined basic education. Things like increased salaries, improved transitional bilingual instruction, and career and college readiness programs go beyond this definition.
3. Funding one-time enhancements is vital, but not the same as finding “regular and dependable” tax sources to fully fund basic education.
A t $13.7 billion, spending on K-12 education is 44 percent of the 2011-13 state general fund budget. Basic education accounts for $12.7 of that total and non-basic education programs comprise another $996 million.
Revenues from several state taxes total a little more than half of general fund revenues, while federal grants are a little less than half. At a state level, taxes on retail purchases and gross business income reflect consumer spending and together represent the largest state tax source – about 40 percent of all revenue. The state property tax is much less, at 7 percent.
At last week's meeting, Enfield and Vincent suggested Washington increase the percentage of collected property taxes it designates to education. While that might be sufficient to fund basic K-12 enhancements, it can’t be considered a candidate to meet the court’s requirement that tax sources amply fund and protect all basic education.
The state’s tax system needs a more comprehensive review to meet the court’s mandate. Though there is not enough time for the task force to reform state taxes, it can suggest that this be the next step. Which brings me to the next suggestion.
4. Recommend that the legislature create a successor task force.
The current task force should be credited with much good work for its research on the costs and options for enhanced education spending. The data and other information it has pulled together are invaluable. Still, the next step is to create an ongoing task force effort that examines our tax structure with an eye on reforms that would provide stable and sufficient revenue to fund education. Of course, it would greatly help the follow-up effort if someone were to supply a working definition of what constitutes a “regular and dependable” tax source.
Its agenda would be comprehensive. To consider:
- the regressive nature of the tax code;
- the burden of state and local taxes measured against personal income;
- the declining ratio of sales tax revenue to personal income;
- the fairness of a gross income versus a net income tax on business;
- and the reasons why tax breaks are much harder to end than start.
This new task force would look closely at the how the federal tax code could benefit the state — by allowing taxation of Internet sales and making state sales tax permanently deductable from federal income taxes — as the Congress gears up to negotiate federal tax reform.
It would also play an instrumental role in sussing out whether Washingtonians are willing to be taxed, if it will mean a better education for their kids and more jobs for all.
Interested in submitting your solution to Washington's education worries? Learn more here.