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Budget: Biggest education reform in state history will rely heavily on property taxes

SEATTLE — The state’s tentative budget pumps billions more into education, relying heavily on property taxes to foot the bill.

Lawmakers say the two-year budget deal amounts to $43.5 billion, with $7.3 billion of that for education that will be phased in over four years starting this fall.

Eight key negotiators who worked on the budget and the education portion of the plan believe the deal will comply with the state Supreme Court’s 2012 McCleary decision in which the justices ruled the state was failing to fully fund public education. The court gave the state until 2018 to comply.

“It heals a wound that’s been festering for 30 years and it closes the gap of the ‘haves’ and the ‘have-nots,’” Sen. Ann Rivers, R-La Center, said.

The outline of the education plan provided Thursday sets a minimum starting salary for teachers at $40,000, with adjustment for inflation and regional differences. Under the plan, the average minimum salary for instructional staff will be $64,000, and adding in regionalization, it will range from $66,194 to $82,081. School districts can pay a salary over the maximum of $90,000 by up to 10 percent for educational staff associates or teachers who teach science, technology, engineering, math or in bilingual or special education programs.

Also under the measure:

—There’s a mandatory 10 percent increase after 5 years of employment.

—Starting in 2020-21, the minimum state allocations for salaries must be adjusted annually for inflation.

—Starting with the 2023 session, and every six years after that, the Legislature must review compensation to make sure they are adequate based on the market and economic differences between school districts.

The Washington Education Association, which represents teachers, said in a news release that while the new funding plan "represents progress, it falls short of amply funding our students' K-12 public schools" as required under the McCleary decision.

Click here for a statewide summary, per pupil funding, total funding and tax rates for the plan. 

If the budget gets the votes needed for passage and the governor’s signature by midnight Friday, there will be no government shutdown when the new fiscal year kicks in on Saturday, July 1.

The budget will also impact many Washingtonians in a big way.

When it comes to 1.1 million kids in public schools, lawmakers promise that classroom sizes will shrink and more resources will be given to special education and other programs.

“You will notice additional help for low-income students,” Sen. Andy Billig, D-Spokane, said.

The plan will increase the statewide property tax earmarked for education to pay the salaries of basic educators instead of the current situation where salaries are paid through levies raised by local school districts. Starting in 2018, levy dollars would only be allowed for enrichment programs and for salaries outside of basic education, for example, compensation for a coach.

Educator salaries will increase across the board but also equalized so that a teacher in Spokane will make relatively the same as an educator in Bellevue.

“There is a provisional (item) that if you live in an area that’s high-cost ... you will get some additional funding to compensate your teachers,” Billig said.

“Nobody’s salaries will go down; it could be the case that some districts won’t see the salary increases that others will because they are already paying high salaries,” Sen. Christine Rolfes, D-Bainbridge Island, said.

Education funding will affect Washingtonians, depending on where you live. Property taxes will pay for about $4 billion of the $7.3 billion in new revenue pumped into education.

If you live in an area with high property values, such as Seattle, Mercer Island and Bellevue, expect to see substantial property tax increases. It is possible that some homeowners in Seattle could see their property taxes go up by $400 in one year and Mercer Island close to $1,000. The exact numbers have yet to be announced but they are expected to be close to those projections.

But Republicans on Thursday said many Washingtonians would see their property taxes go down.

“It’s absolutely helping the middle class and 73% of Washington,” Sen. John Braun, R-Centralia, said.

Click here for the projected tax rate analysis for each school district under the new K-12 policy. 

Braun said the deal finds a way to comply with the McCleary decision in a fair way.

But Democratic Sen. Reuven Carlyle, who represents Seattle, says it’s far from fair.

“It’s a stressful situation; it looks like property taxes are a major component of this and I think it’s safe to say it’s a Democratic budget with a Republican tax plan,” Carlyle said.

Carlyle called the budget “the good, bad and the ugly.”

Sen. Kevin Ranker, D-Orcas, one of the key budget negotiators, said both sides had to compromise.

“In the end, politics have to be the art of yes. There has to be compromises in the end; Republicans would only agree to property tax increases,” Ranker said.

Democrats say they would have liked a capital gains tax and a carbon tax to generate the money for education, but neither made it in the deal.

But Ranker says they pushed to close current tax exemptions.

“It’s closing the loophole on big oil, so extracted fuel -- as well as closing the (sales tax exemption) loophole on bottled water,” Ranker said.

Lawmakers also agreed on requiring online companies like eBay to charge a sales tax on goods sold online. The sales tax measure will generate about $1 billion in new revenue.

Lawmakers have to vote by midnight Friday to prevent a government shutdown.