Author Archives: walegcommunications

Preventing tolls between Washington and Oregon

Earlier this year the Oregon Legislature approved a new transportation budget that calls for the state to toll Interstates 5 and 205 at the Oregon-Washington border. Under the legislation, Oregon would need to request federal approval to implement the tolls by 2018.

I joined a group of Southwest Washington lawmakers and Congresswoman Jaime Herrera Beutler in sending a letter to Governor Jay Inslee encouraging him to engage on the issue to protect Washington drivers from the cost increase, including those who use the bridges daily to commute to work.

According to census data, 74,000 Washington residents utilize the I-5 and I-205 bridges to get to work in Oregon every day.

While the tolling effort is still in an early stage, it’s important for Washington residents to have a voice and advocate in the process. Given the interstate angle, this is a critical function of our governor to fulfill, but we’ve yet to hear him weigh in on the situation.

Moving forward, our state must take an active role in the planning and decision-making process to ensure Washington residents are protected from increased costs that would not necessarily benefit them.

Using unexpected revenue to reduce taxes

With state tax collections and projected revenues continuing to rise (see chart), I have proposed using up to $1 billion of unexpected tax dollars coming into the state to smooth next year’s transition to Washington’s new education-funding system.

While more than 70 percent of state taxpayers will see a net property-tax decrease once reforms are phased in, the new K-12 funding system has the entire state slated for a tax-rate increase of $0.81 per $1,000 assessed value in 2018.

Creating an equitable and long-term education funding system for our state required a great deal of compromise. Anything more than a short-term property-tax increase necessary to transition between funding systems was not my preferred method.

Ultimately, a one-year increase was necessary to reach a bipartisan agreement.

Every year our state’s chief economist issues quarterly, four-year revenue projections. My proposal would use 75 percent of the unexpected revenue growth – the amount that exceeds the June 2017 forecast – over the next four years to reduce the impacts of the $0.81 state property-tax rate increase in 2018.

The most recent quarterly forecast anticipates another $500 million coming into the state under the current tax structure (again, money beyond what was forecast in June), which would reduce the current $0.81 rate increase to less than $0.50 per $1,000 of assessed value.

With the Legislature having already passed a budget that balances and provides property tax relief for a majority of our state over the next four years, this approach would provide us with an opportunity to amply fund state government and reduce the short-term impact on working families and people with fixed incomes.

Critical water rights issue still not resolved

The Legislature’s failure to address a 2016 Washington State Supreme Court ruling known as the “Hirst” decision harms not only families wanting to build a home, but also our overall state economy.

As a refresher, the ruling changed how building permits are issued when the home relies on a small private well for water. The ruling made it difficult, if not impossible, for the applicant and property owner to drill a new well and therefore receive the proper permits to build a home.

In the Senate, we passed a bill that would address the situation by continuing the state’s long-standing policy of exempting these small household wells from more burdensome requirements, given their minimal impact on water availability. However, our colleagues in the House of Representatives have refused to vote on this or any other measure that would bring relief.

Although negotiations continue, we’ve yet to make meaningful progress on this issue, which affects many Washingtonians in rural areas, including those who already own land and were attempting to build.

We recently gained a better understanding of the broader impact this has on our state’s economy through lost construction jobs, lower property values and reduced tax revenues. Click here to read the full study.

This comes at a time when rural Washington is already facing much higher unemployment rates than the Puget Sound area, and continues a disturbing pattern of state decisions and policy choices that harm our rural communities – a trend I’ll discuss more in my next email update.

Use unexpected tax revenues to reduce short-term property-tax impacts

With state tax collections and projected revenues continuing to rise, Sen. John Braun says he’s willing to use up to $1 billion of unexpected revenue to smooth next year’s transition to the new education-funding system lawmakers adopted in June.

While more than 70 percent of state taxpayers will see a net property-tax decrease once reforms are phased in, the Legislature’s overhaul of the K-12 funding system has the entire state slated for a tax-rate increase of $0.81 per $1,000 assessed property value in 2018.

“Creating an equitable and long-term education funding system for our state required a great deal of compromise,” said Braun, R-Centralia, who serves as chair of the Senate Ways and Means Committee and a member of the education funding negotiating team. “Anything more than a short-term property-tax increase necessary to transition between funding systems was not my preferred method. Ultimately, a one-year increase was necessary to reach an agreement across the aisle.

“Having heard similar concerns about property-tax increases from the governor and my Democratic colleagues, I expect we will see bipartisan support for this legislation.”

Every year state government issues quarterly, four-year revenue projections. Braun proposes using 75 percent of the unexpected revenue growth – the amount that exceeds the June 2017 forecast – over the next four years to reduce the impacts of the $0.81 state property-tax rate increase in 2018. The total offset to the state property tax would be capped at $1 billion.

“With the Legislature having already passed a budget that balances for the next four years, this would provide us with an opportunity to fully fund state government while reducing the impact on working families and people with fixed incomes,” said Braun.

Beginning in 2019, under Washington’s new education funding system, a school district’s local levy will be limited to a maximum of $1.50/$1,000 of assessed property value, up to $2,500 per student. Braun said more than 70 percent of state property owners will have a lower tax rate between 2019 and 2021 than they do now, even if all school districts fully utilize local levy capacity. The amount of people receiving property tax relief would grow if school districts used only a portion or none of their locally allowable levy.

Once this year’s education-funding reforms are phased in school districts will receive the same or more money in state funding alone as they currently take from state and local taxes combined.

Thousands More Teachers in Classrooms

An unprecedented increase in teachers has occurred over the last four years, exceeding growth during all preceding years of the 21st century.

Over 6,000 more classroom teachers than four years ago

Take a look at that chart for a minute because what it conveys is remarkable:

Since the Majority Coalition Caucus (“MCC”) was established in 2012, the number of teachers educating our children has grown more rapidly than in all preceding years of the 21st century combined.1
Average yearly growth in total teachers: 1,508 new teachers per year since 2012 vs. 198 new teachers per year from 2000 to 2012.
Put another way: if teacher growth had continued at the 2000-12 yearly rate, it would have taken until 2042 until this many teachers were in Washington classrooms.

Not surprisingly, the student to teacher ratio has gotten smaller in every year since 2012 with the official number falling to 17.9 in the last school year (1.079 million students for 60,425 teachers in 2016-17).2

This was not an accident but rather a concerted effort by the MCC to prioritize education. Indeed, in the 30 years prior, education was a declining state budget priority with non- education spending growing at twice the rate of education.

However, since the MCC took control of the Senate, the reverse has happened with education spending growing at nearly 3 times the rate of non-education spending.3

The newly adopted 2017-19 budget represents the first time since 1981-83 that K-12 comprises more than half of state budget spending.4

That’s Not All: Over 2,400 more teachers budgeted for this school year

The 6,034 increase in the last four years is likely to become a nearly 8,500 increase over five years once the 2017-18 school year is completed.

In addition to funding the final installment of the K-3 class size reduction, the state budgeted for a projected net policy increase of 2,414 teachers in the 2017-18 school year.5 Districts have flexibility to spend state money as they deem fit, so it is possible they will spend the new state funding in ways other than hiring 2,400 additional teachers, but – regardless of the exact tally – the 2017-18 school year will again see a substantial increase in the number of educators teaching our students.

Bottom Line:

Prioritizing education in state budget writing has led to thousands more classroom teachers.

Footnotes

Teacher FTEs, including teacher librarians: 2000-01: 52,017; 2012-13: 54,391; 2016-17: 60,425.
Senate Ways & Means & LEAP data. Interestingly, if you take into account all K-12 FTE staff employed by schools (administrators, classified, paraprofessionals) the staff to student ratio is 9.4 (1.079 million students for 114,696 FTE staff).
For the 30 year spending history from 1981-83 to 2011-2013, see p.2 of https://andyhill.src.wastateleg.org/wp-content/uploads/sites/9/2015/09/Paramount-Duty-Series-Part- I.pdf. Since then, with the MCC in charge of the Senate, education spending (K-12, higher ed, early learning) has grown by 57% (from $16.5 B to $26 B in enacted budget) while all other government spending has grown by 20% ($14.8 B to $17.7 B).
LEAP (fiscal.wa.gov). K-12 spending comprises 50.3% of the near general fund + opp. pathways appropriation for 2017-19.
Office of Financial Management analysis, using K-12 Mega Model. It’s worth noting that the 2,414 budgeted increase is just at the policy level. The final phase-in of the K-3 class sizes around the state is also expected to add significantly to the teacher rolls in the state.

Improving career opportunities for Washington students

Sen. John Braun was presented with the Legislator of the Year for Career and Technical Education award today by the Washington Business Alliance for his work to support career opportunities and skills training in the new state budget. Braun, who serves as chief budget writer in the Senate, fought for additional investments to better prepare students for an increasingly competitive workforce.

“With each passing year, today’s students and tomorrow’s employees face more diverse and competitive demands. In order to be prepared to earn good jobs, students must have the appropriate skills, whether that be through vocational training, apprenticeships, or four-year college,” said Braun, R-Centralia. “Not every student has the same career path just as the job market is not one-size-fits all. This should be reflected in how we support and prepare students.”

As part of the award presentation, local students, teachers, employers, and school district officials gathered to learn more and discuss the importance of providing multiple pathways to employment, including career and technical training.

The new state budget increases investments for career and technical education by more than $200 million over the next four years. Braun was the architect of the Senate budget proposal and served on both the education and overall budget negotiating teams.

“The business community is grateful to Senator Braun for recognizing the need for a talent pipeline to the technically skilled positions industry currently struggles to fill, which are vitally important to growing our Washington economy,” said Jene Jones, education policy advisor to the Washington Business Alliance. “Senator Braun’s leadership led to landmark investments for career and technical education students statewide, and we congratulate and thank him for the lasting impact of his work.”

Career and Technical Education Washington promotes and supports middle and high school programs that provide 21st century academic and technical skills for students. Through CTE, students have the opportunity to explore career options, especially in high-demand and high-growth fields. They are encouraged to identify career goals and can take classes at skills centers and community and technical colleges that apply math, science, and other academic subjects in a real-life, hands-on way. They can also pursue a registered apprenticeship, industry certifications, and two- and four-year college options.

The new 2017-19 budget, sponsored by Braun, was approved at the end of the 2017 legislative session and went into effect on July 1st.

Governor rejects statewide manufacturing jobs

Sen. John Braun shared great disappointment that Gov. Jay Inslee vetoed legislation that supports middle-class families by improving job opportunities in the manufacturing sector throughout the state. The Legislature overwhelmingly approved a new state budget that included a uniform statewide business and occupation tax rate for manufacturing businesses, the only sector that has seen employment decline since 2000.

“While many areas of our economy have been successful in recent years, Washington has lost more than 50,000 manufacturing jobs since the turn of the century,” said Braun, R-Centralia, who serves as chair of the Senate Ways and Means Committee and lead Senate budget negotiator. “Not only are these jobs critical to rural and suburban economies, but they provide high wages for working families. Failure to invest in the success of our state’s middle-class families would be a major disappointment and rejection of a statewide economy that works for everyone.”

The current business and occupation tax rate for manufacturing businesses is 0.484%, which under the plan was reduced to .2904%, the rate currently provided to Boeing and other aerospace companies. The change was part of the overall compromise on a new state operating budget, which included closure of some existing tax incentives and added other incentives aimed at protecting or creating new jobs.

“It’s unbelievable that the governor would go back on a complex budget agreement that received strong bipartisan support,” said Braun. “The governor’s staff was involved in every step of the negotiation and at no point prior to the bill’s passage did they suggest the governor would veto part of the agreement. Negotiating a budget is already an enormously difficult process that requires working in good faith. Vetoing part of the agreement will seriously undermine our ability to govern.”

Manufacturing employment has declined by 51,600 since 2000, with 47,700 of those jobs outside the aerospace sector.

The legislation was approved by a margin of 33-16 in the Senate and 83-10 in the House of Representatives, a margin high enough for lawmakers to override the governor’s veto.

Braun-sponsored state budget approved, makes historic education investments

Public education will account for more than half of state spending for the first time since 1983 under a new budget sponsored by Sen. John Braun, which today passed the Washington State Legislature. The $43.7 billion two-year operating budget will cover the day-to-day costs of state government from July 1, 2017, through June 30, 2019.

“Students from every community in our state will now have the same opportunity and support as their peers in high-performing schools,” said Braun, R-Centralia, who serves as chair of the Senate Ways and Means Committee. “We’re solving a generational problem facing our students and taxpayers, with a generational solution.”

The bipartisan budget includes $21.9 billion for K-12 education in 2017-19, a 62 percent increase since the 2012 state Supreme Court’s McCleary ruling.

Manufacturing businesses will also see a 40 percent reduction in business and occupation taxes, bringing all manufacturers to a uniform statewide rate, which is currently only available to Boeing and other aerospace companies.

“Employment has grown across all sectors, with the exception of manufacturing, which has lost more than 50,000 jobs since 2000,” said Braun. “Leveling the playing field for all manufacturers will make employers more competitive and successful, especially in rural communities.”

The new budget also invests in improved mental health treatment and care by providing 300 more beds for long-term care in community treatment and 96 additional slots at crisis walk-in centers.

Property tax reform is also on the way for Washington residents as a new school funding system replaces existing local maintenance and operations levies with a $1.50 per $1,000 assessed value maximum for all school districts. Local levy collections will also be capped at $2,500 per student, with the state guaranteeing $1,500 for districts where collections fall short. This is coupled with an increase in the existing statewide property tax to a rate of $2.70.

The agreement follows previous calls from the governor and House of Representatives to increase taxes by at least $8 billion.

The budget was approved by a 70-23 in the House of Representatives and 39-10 in the Senate and is expected to be signed by the governor before July 1.

Regular session recap, next steps

Lawmakers are currently in a special session to complete work on education funding and a new state budget. While it’s disappointing we were not able to get done on time, it’s important to understand what happened during the regular session to get us to this point.

In January, I sponsored a comprehensive education reform plan to provide a high-quality public education to every student in Washington. The Senate approved this legislation, which fully funds public schools and makes them more equitable for students, teachers and taxpayers.

We then approved a new state budget in March that pays or our education investments and protects our most vulnerable citizens. The Senate proposed and actually passed a balanced budget that does not raise taxes.

This runs in stark contrast to Democrats in the House of Representatives who offered a school funding plan that protects the status quo. Despite calling for spending increases, they offered no plan to actually pay for it.

In March, the House approved a budget that would increase state spending by billions of dollars, and required $8 billion in new taxes. Due to the House’s refusal to vote on the taxes and other bills necessary to support their budget, they are almost $11 billion out of balance over the next four years.

In April, when our work on the budget should come to an end, we were left unfinished with these options:

a balanced Senate budget that invests in our public schools without raising taxes, or
a House spending plan that maintains major inequities for students and requires massive new tax increases.

Leaders from the House have demanded we negotiate a compromise with them that includes a capital gains income tax and increases on businesses including everything from nursing homes to day cares. That is not how good-faith negotiations work. Both sides must be able to come to the table with proposals that actually have support of at least one legislative chamber.

I will not negotiate with a capital gains tax that does not even have enough votes to pass the Democrat majority in the House of Representatives.

Ultimately I remain confident we can and must work together to find a solution. Doing so will require all lawmakers to be open with the public about where they stand on newly proposed taxes and education reform.

As chief budget writer in the Senate, I will continue work during this special session to create a high-quality education system and protect our economy.