Olympia's red ink flows toward schools

The state'ꀙs rising tide of red ink has submerged any number of worthy projects and ideas. The question is how many of them will still be viable when the tide recedes.

Many economists think that raising taxes in a recession sounds like a bad idea. It'ꀙs hard to argue with that sentiment. But it'ꀙs equally hard to see where that leaves any number of important programs and major reforms.

Take public transportation (please). Everyone is all for public transportation (albeit generally for someone else), but Metro has announced that its projections of sales tax revenue, which pays most costs of running the bus fleet, show "an unprecedented $100 million funding gap for 2010, and a worsening of the current 2008/09 biennial sales tax receipts by another $29 million."

"Because nobody is buying anything, sales tax revenues are crashing," King County Council member — and County Executive candidate — Dow Constantine says. "We need a robust public transit system, and we don'ꀙt have the resources to maintain it right now." Even though this is "a time of record and increasing demand for transit," Constantine explains that unless the state fills the gap, Metro will have to reduce service. If revenues really fall as far as Metro anticipates, the agency may have to drop 75,000 rider trips per day.

What are the chances that the Washington Legislature will step in to avert that? A couple of weeks ago, Constantine drove down to Olympia to test the waters. On the way back, he said he had encountered "as bad an environment as you will ever find for the imposition of new taxes."

In that environment, a bill that would require public funding of candidates for the state Supreme Court is going no place this session. The idea of publicly funding Washington judicial races got some interest a few years back when the Building Industry Association of Washington dumped money into state Supreme Court races.

By this time, the prospect of special interests buying judicial seats has alarmed people across the United States. The Supreme Court has just heard the appeal of a case in which a West Virginia mining company was hit with a large damage award, the company'ꀙs chief executive invested $3 million into a state Supreme Court race, and the Justice he helped elect cast the deciding vote when the court ruled in the company'ꀙs favor. The New York Times described this case in an editorial entitled "Justice Not for Sale." Unfortunately, here as in West Virginia, campaigns take money, and public funding requires public funds. Maybe some other year.

And maybe some other year for education reform — or even for unreformed education at last year'ꀙs level. On February 18, little more than a month after the Joint Task Force on Basic Education Finance gave legislators the final version of an ambitious plan to reshape "basic education," the state'ꀙs new Superintendent of Public Instruction, Randy Dorn, warned about two or three thousand teacher layoffs.

Needless to say, firing teachers and providing less money to the schools were not among the task force'ꀙs recommendations. Instead, the group wanted "smaller class sizes for both academic and career and technical education programs, . . . additional days for teacher professional development . . . increased funding for school counselors, teacher-librarians and other specialist professionals, and funding for classified staff, school administration, and other costs."

It foresaw funding increases of $7.5 billion to $10 billion per biennium, depending on the length of the school year. (The task force recommended "significantly more instructional time than current state funding provides." The longer you expect teachers to teach, the more you have to pay them.) The group wanted its proposal to be up and running in the 2011-2012 school year, which would require action by the 2011 Legislature.

In private, lobbyists for other worthy causes talk about how much they resent the advocates of public education. The education community wants all the money on the table, they say. It'ꀙs insatiable.

True, there is no limit to the amount of money that could be spent on public schools. But it'ꀙs also true that education holds a unique place in Washington law. Providing social services or public transportation or clean elections or a pristine Puget Sound isn'ꀙt the state'ꀙs "paramount duty." Education is. The Washington State Constitution says that making "ample provision" for education is the paramount duty of the state. No one knows what the framers meant by that back in 1889. But the state Supreme Court decided 30 years ago that they meant what they said.

That court decision (Seattle School Dist. v. State, 90 Wn. 476 (1978) forms the starting point for any discussion of education finance. In the 1970s, local school districts relied increasingly on local levies — the levy made up some 25.6 % of the average district'ꀙs operating budget — and local voters increasingly turned them down. The Seattle School District, where the levy had climbed to more than 37.7 %, sued the Legislature. It wanted a court to order the Legislature to pony up. Seattle cited the state Constitution: If education was really the state'ꀙs paramount duty, then the state had better not leave it in poverty.

The paramount duty clause had lain dormant in the Constitution ever since 1889. No record of the constitutional convention offered any guidance about what the framers had in mind. No court had ever interpreted it. But the state Supreme court wasn'ꀙt trying to solve an historical puzzle; it was trying to solve a current funding problem. The state argued that the meager funds provided by the first state Legislature, some of whose members helped write the Constitution, proved that "ample provision" didn'ꀙt mean much.

The court didn'ꀙt buy it. Instead, the majority decided that "the State complies with its mandatory duty to make ample provision for basic education only if sufficient funds, derived through dependable and regular tax sources, are provided. The special excess levy is neither dependable nor regular." The Legislature had to come up with enough general fund dollars to provide a "basic education."

The court didn'ꀙt define "basic education." It left that up to the Legislature — which meant, in practical terms, that basic education meant whatever the Legislature was willing to pay for. As a result, special levies have risen to roughly one-quarter of the average school district'ꀙs budget'ꀓjust about where they were in the mid-1970s, when the court found them unacceptable. The figure would almost certainly have risen much higher, but the Legislature has capped the amount a district can raise locally.

Just paying for business as usual is growing harder. The Basic Ed task force envisioned the state ramping up education funding gradually over the next six years. Ross Hunter: the former Microsoft executive who chairs the House Finance Committee and served on the task force, says he thought until last summer that just a gradually growing budget pie would do it. Now that the pie has stopped growing, he, realizes this won't work. Education reform requires a new dedicated revenue source, aka new taxes.

Hunter suggests increasing the property tax specifically to fund education. This would mean going to the people for a constitutional amendment. Currently, the Constitution limits total property tax to one percent. Hunter envisions lifting that lid explicitly for basic education. On one hand, people don'ꀙt like the property tax. On the other hand, Hunter says that when he goes around the state and talks to people, they always ask, how do you know new tax money will really be used for education?

He concedes that'ꀙs a legitimate question. If the money isn'ꀙt locked into public education, the Legislature will probably use it for something else. He recalls that in 2003, when the federal government sent more money than usual for special education, the Legislature simply substituted it for money the state would otherwise have spent on special ed, and used the state dollars for other things.

The advantage of using the property tax is that it'ꀙs already dedicated to K-12 education. (The state property tax goes entirely to K-12. But it'ꀙs nowhere near enough. The state has to kick in money from sales tax, B&O tax and other sources, and local school districts raise money through special levies. It'ꀙs still not enough.) You'ꀙd just be asking people to raise the education tax.

Some education advocates wax pretty optimistic these days when they talk about the mood in Olympia. What they mean is that legislators seem open to reforms that don'ꀙt require new expenditures right away. But no one expects education funding even to stay at this school year'ꀙs inadequate level, much less to increase. Future increases implied by this legislative openness remain pie in the sky.