OLYMPIA – With the end of the legislative session on the horizon, Democrats and Republicans unveiled different plans Wednesday to pump more state money into public schools, something the state Supreme Court has said they must do.

Senate Democrats proposed a capital gains tax on the state's wealthiest residents, those who earn more than $250,000 per year on their investments. It would raise an estimated $1.3 billion and provide the money for the state to take over a responsibility it has been shirking for years, paying the basic salaries of teachers and other school personnel.

“We’re trying to put something on the table,” Sen. Jim Hargrove, D-Hoquiam, said. “This is a doable plan.”

Senate Republicans unveiled a different bill with a similar goal in mind. They want to rearrange the property tax levy system, lowering the amount local school districts collect and raising the amount the state charges for its levy. The average property tax payer wouldn’t see much difference in the annual bill, but the extra money the state collects would go back to the districts for basic teacher pay as part of a larger plan to equalize those salaries across the state.

That would reverse a trend that goes back decades in which the state covered less of school salaries and local districts picked up the difference, and pay disparities grew between districts, Sen. Bruce Dammeier, R-Puyallup, said. “The state has made the easy decision of having everybody else pay our bills.”

Last year the court found the state in contempt of its order to come up with a plan that satisfies a constitutional requirement that education is the state’s “paramount duty”. It didn’t impose a penalty at that time and gave the Legislature this session to develop that plan.

Both plans are scheduled for a hearing in the Senate Ways and Means Committee todaycqThursday, but face significant challenges beyond the need to be approved by two chambers controlled by opposing parties in the 10 days left in the regular session.

The Democrats' plan consists of three interconnected bills, with a six-year phase-in of a new system for school salaries, which would be adjusted every four years, as well as a phase-in for more teachers and smaller class sizes required by an initiative voters approved last year. Local school levies would be reduced by the amount the districts get from the state, so more than 98 percent of residents would get a tax break, Hargrove said.

It also requires a new tax, which is never popular with voters. But sponsor Sen. Kevin Ranker, D-Orcas Island, said it would fall on only about 7,500 people, and the lower limit for investment gains would be set through a constitutional amendment.

“It will never come down without a vote of the people,” said Ranker, and the money would go into a special trust fund that could only be used for basic education expenses. He produced a letter with 100 people who would pay the tax and support it.

Such an amendment requires two-thirds majorities in both houses, and a simple majority of voters in November.

The Republicans' plan would eliminate a law voters approved through initiative, the annual cost-of-living adjustments for teachers and some other school staff. The Legislature would set base salaries and adjust them annually through a different inflation adjustment measurement. Collective bargaining between local school districts and their unions would be limited to working conditions and supplemental pay.

It also involves changes to the state’s complicated levy laws, the levies of its 295 school districts, and the restrictions on the amount a levy can be raised. This plan, too, would phase-in a reduction in local property tax levies as the state property tax levy rises and the state would use the money it collects for teacher salaries.

This would meet a requirement by the Supreme Court that the state reduce its reliance on local levies, Dammeier said. Because the money is already being collected, most taxpayers wouldn’t see an increase in their total bill.

Senate Democrats are basing their plans for paying teachers on a new capital gains tax, which is different from capital gains tax proposals by Gov. Jay Inslee and House Democrats. Dammeier said he doubted there were votes in the Legislature to pass such a tax through both chambers.

Inslee said Wednesday he had not yet studied the plans, but said he remained optimistic the Legislature would produce a bipartisan budget that satisfies the court’s mandate on schools. To do that, he’s told budget negotiators he still believes the state will need some type of tax increase.

“We can’t do this with gimmicks and hopes,” Inslee said.

---

---