Senate Republicans push through massive property tax shift as part of school reform plan

OLYMPIA – Senate Republicans pushed through a massive shift in property taxes as a way of balancing their two-year, $43 billion spending plan and the school reforms it would contain.

The 2017-19 general operating budget covers most state programs and salaries not connected to transportation.

A key element of that budget is an effort to comply with the state Supreme Court’s order to supply all the money needed for basic public school education in the state’s 295 school districts. The tax plan would change the way the state sends money to the districts, although lawmakers debated whether all would receive more money.

The budget would reject wage contracts negotiated for state employee unions, except those that represent the Department of Corrections and the Washington State Patrol. It proposes replacing them with $500-per-year raises, although the rejected contracts would have to be renegotiated.

Debate over the full budget continued late into the night, but was expected to pass on the same 25-24 vote as the school reform and tax plan, representing the split between the Republican-led majority caucus and minority Democrats. The budget proposal and other legislation attached to it must still go to the House, where majority Democrats are expected to release a much different budget plan next week.

Democrats tried in vain to revise or at least relabel the tax plan, which sets a new statewide property tax to help pay for public schools and wipes out the maintenance and operating levies that local school districts have.

Republicans call the new tax a “local effort levy.” At the very least, Sen. Christine Rolfes, D-Bainbridge Island, argued, they should be transparent and honest and call it a “new state property tax.” Her amendment to make that change to the term throughout the bill failed.

Conservative Republicans, who normally shun the term, called the plan “progressive” because it raises taxes in some school districts that have higher property values and lowers them in many districts outside of central Puget Sound, which have lower property values and higher unemployment. Property owners in most Spokane-area school districts would see a drop in the property taxes they pay; those in Seattle, Bellevue and some other West Side districts would see an increase.

“I would not have thought I would have to explain progressivity on this floor,” Ways and Means Committee Chairman John Braun, R-Centralia, said at one point. He later apologized for being “unnecessarily snarky.”

It isn’t progressive, countered Sen. Reuven Carlyle, D-Seattle. It’s a top-down, state-centric tax model that would replace the current model that relies on local control.

“It’s sort of socialistic,” Carlyle said. He later tried to remove a tax break being offered large businesses with property valued at more than $5 million, saying they weren’t even expecting that “windfall.”

That amendment, too, failed on a voice vote, as did another proposal to remove a limit on how much local districts would be able to levy in property taxes for services beyond basic education that must be covered by the state.

At one point, Republicans seemed to lose a voice vote on an amendment because more of their members were out of the chamber watching the Gonzaga-West Virginia basketball game in a nearby office. Democrats called for a “division” which allowed only senators on the floor to stand and be counted. But because yes votes are counted first, and Republicans were voting no, they were able to shout to their missing members and get them back into the chamber.

In announcing the result of the vote, President Pro Tem Tim Sheldon also announced the result of the game, that Gonzaga won.