Friday, August 12, 2016

McCleary Talk From Two Good Thinkers

Yesterday, Rep Reuven Carlyle had an opinion piece at Publicola.  He says that Sound Transit and public education funding cannot be done at the same time.  In 2015, he says he supported the financing for the light rail system.  (partial)
And yet, as I review the updated financing plan in more depth, I continue to grapple on a deeply personal level with the genuine burden the Sound Transit proposal places on public education. It is unsettling at best to serve as a state legislator while Olympia is under a contempt order by the Supreme Court for failing to meet the state’s paramount duty of fully funding public education. This is historic and unprecedented and we are recreating our educational finance plan for the next generation in real time. After putting an additional $2.5 billion into K-12 funding over the last three legislative sessions since the McCleary ruling, Democrats and Republicans are struggling to find a final path forward for the last $3.5 billion approximately. It’s virtually impossible to reach that level of new education funding without reform to the state property tax and local school levies. The transportation finance plan makes that difficult but essential project dramatically more complex.

As a state legislator with a passion for building the best education system in the nation, I am unsettled that the package consumes the oxygen in the room on taxes for virtually all other public services at all levels of government for years to come. The plan moves to among the very highest sales tax in the nation along with a major property tax increase. We need to be honest that the ability of cities, counties and the state to utilize the sales tax in the future as a new revenue source is effectively ended with this plan. The impact on property taxes at the city and county level is more uncertain but clearly substantial. In economic terms, the opportunity costs are extraordinary for years to come.
 Robert Cruickshank replies to Carlyle in this piece from The Urbanist. (partial)

As a parent who lives in the 36th District, and therefore a constituent of State Senator Reuven Carlyle, I share his concern that Washington State be able to fully fund our public schools as well as address the climate crisis by building rail to connect our community to so many others in the Puget Sound region. That is also why I do not agree with his assertion that passage of Sound Transit 3 would jeopardize funding for our public schools. It does no such thing. Puget Sound voters should reject this false choice. We can both vote for ST3 and have fully funded public schools.

The legislature has a wide range of options available to find the money it needs to fund our public schools. They could close billions of dollars in corporate tax loopholes, and Sen. Carlyle has been a leader in addressing those unaccountable tax breaks. They could tax the capital gains and incomes of wealthy Washington residents. They could pass a carbon tax and dedicate some of the revenues to schools.

Raising the sales and property tax are also options available to the legislature, even if ST3 is approved by voters. A higher sales tax has been the topic of some discussion among legislators, but the more fully fleshed out proposals have involved the state property tax. This issue is at the center of Sen. Carlyle’s complaint, so it is worth further discussion.
Cruickshank gets to the crux of the matter
By approving ST3, voters do not prevent the legislature from using the state property tax to fund public education. It is possible that passage of ST3 makes it more difficult for legislators to cut an easy deal regarding the state property tax. But that is a political issue and not a policy issue. It’s hardly the same thing as suggesting ST3 would come at the expense of our public schools. It simply doesn’t.

Sen. Carlyle mentioned the 1% annual limit in the rate of property tax increase. That limit does not exist because of Tim Eyman—his initiative imposing a 1% limit was thrown out by the State Supreme Court. The legislature itself adopted that limit in 2007, the year before Sen. Carlyle was elected to the State House. That limit has eviscerated funding for local governments, and the legislature is free to amend or eliminate that limit if they choose. The legislature may have to do so anyway in order to make a levy swap work
Food for thought.

22 comments:

Elephant's Memory. said...

For years, Carlyle was the chair of the House Finance Committee. He was instrumental in pushing the biggest tax break in history to Boeing. There was a special session. The bill was dropped at midnight and the bill was passed through the legislature in 3 days. As chair of the House Finance Committee- Carlyle had the opportunity to prevent the passage of the bill.

Anonymous said...

Why would have Sen. Carlyle wanted to prevent the passage of the Boeing, et al tax preference? He's has acknowledged all along that the preference has been good for our state. Boeing has met its end of the bargain by building the 777X here and expanding its production of other airplanes here in our region.

Boeing is a good corporate partner to our state. Boeing is not the reason that the courts have said our legislature is not fully funding education. It's a good progressive talking point for activists, but it's not good public policy to demonize one of our state's largest private employers.

Ray

Anonymous said...

Boeing greedily took its tax breaks and started moving jobs out of state. NOT a good corporate partner.

http://www.heraldnet.com/news/state-lawmaker-blasts-boeing-for-sending-jobs-to-other-states/

CT

Eric M said...

I think the word is "subsidize" not "demonize". It took Mr. Carlyle all of about 36 hours to come up with billions for Boeing. I heard him say how proud he was about this.
Wait. Aren't they a for-profit company? Are they making profits? Yup.
See here-> https://snohomishobserver.com/2014/03/03/boeing-and-ptps
Why am I subsidizing Boeing with my taxes? Boeing gets billions, and schools get the drip. Where the holy h__l is that in the Constitution?

Mr. Carlyle likes to posture as "thoughtful".
Enough handwringing and fretting, already.
Boeing sucked up the money, and you helped.
The Puget Sound region has an awful regional transit system -it's decades behind most major urban areas.
And public education is in bad shape. Last year, my average class size was 34, with a budget for instruction supplies of ZERO dollars. I spent thousands of dollars of my own money on tape, paper, etc.

Why can't we have nice things? Because of Boeing, straight up. They make jobs? Really? I have a job. I'm a teacher. How come that didn't get subsidized?

Washington state loses 6,800 Boeing employees in less than 3 years
http://www.bizjournals.com/seattle/news/2015/03/06/washington-state-loses-6-800-boeing-employees-in.html

Boeing employs about 80k Washington residents. There are about 55k teachers in Washington. It's about the same size workforce. Let's go.

Plus, the last time I checked, THE STATE CONSTITUTION AND SUPREME COURT COULD NOT POSSIBLY HAVE BEEN ANY CLEARER ABOUT THE PARAMOUNT DUTY OF THE LEGISLATURE.

So enough handwringing. Really. Crocodile tears.

Anonymous said...

That's funny, Eric M, about whether you should get subsidized. If you are a public school teacher, technically, your salary is subsidized. Your neighbors pay your salary (and all of your collectively bargained salary increases) and benefit and bonuses, if you receive them. That is the definition of a subsidy. The government is paying you to teach our children instead of requiring each individual family to pay tuition.

Ray

Eric M said...

Ah, I knew we'd get to that. Since I'm a public employee, and my neighbors pay my salary, I'm on some kind of public dole, and ought to be grateful for whatever I get. No. I have a job with a contract, and I work ridiculously hard, have an enormous formal education, and 30 years experience. As I said in my earlier post, I'm working harder than ever, spending more of my own money than ever.
Anyway, subsidy, pay, is really just splitting hairs over words. Whatever. Boeing got a dump truck of money and moved jobs out of state. In public education, we got the shaft.

Here's a nice webpage which shows that, adjusted for inflation, Washington actually is spending less per student in 2014 than 2010. http://www.governing.com/gov-data/education-data/state-education-spending-per-pupil-data.html
That doesn't even get into the problem that more and more of that spending goes into legislature-mandated administration tasks, and less and less gets to actual classrooms where students sit.

Here's a nice webpage that shows where Washington ranks in teacher pay compared to other states. https://wallethub.com/edu/best-and-worst-states-for-teachers/7159/
They find Washington coming in at 38. Out of 50 states. Of course, that's generalized, and I think we might be able to agree the cost of living in some areas of Washington is slightly higher.

Here's a nice webpage that demonstrates average teaching salaries in Washington are moving DOWN. https://nces.ed.gov/programs/digest/d13/tables/dt13_211.60.asp
And here's another webpage that shows the Consumer Price index rising steadily, inexorably during the same time period.
http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=Consumer+Price+Index

Wages have not even kept up with inflation. Not for teachers, not for most people. I think Boeing is doing OK, though. See my first post.

Now, the response I expect is along the lines "Don't like it? Go somewhere else". My response to that is "No, thanks, I live here, and I want better funded, better schools for my kids, and for other children in Washington." I think education is really important and builds a strong economy for the future. Giving billions to a for-profit company that is manifestly disinterested in the future of this state, is shipping jobs out of the state, is just nuts. I know it's heresy here to speak ill of Boeing, but really.

McCleary. Carlyle.Pfft.

Anonymous said...

"Giving billions to a for-profit company that is manifestly disinterested in the future of this state, is shipping jobs out of the state, is just nuts."

Spoken like a good progressive socialist. Profit doesn't belong to the state/government first. Profit belongs to the company/individual first. Boeing and other aerospace companies got a tax preference --- meaning they're not paying certain taxes from their profits --- actually gross sales in B&O, etc. They're not receiving an actual subsidy, i.e., they're not receiving a check from the legislature. Therefore, no one is "giving billions to a for-profit company."

And your statement about Boeing being "manifestly disinterested in the future of this state" is just ridiculous. They invest millions of dollars in our state and local communities in grants paid to schools, arts organizations, social services, etc. Next time you go to the theater or the opera, be sure to check the back of your program to see who is underwriting the show. And they are paying millions in property taxes and their employees are contributing to the state. Your statement isn't heresy as much as BS.

Ray

Elephant's Memory said...

Inslee called a special session for Boeing and the bill got dropped at midnight. Hearings began the next day.

If the Boeing deal was a good deal...they wouldn't have been afraid of public scrutiny.

I also suspect Olympia would occasionally throw a tantrum -or two- and would not put funding into education.

The legislature was able to get funding for Bertha (Carlyle was in on that deal), pass a $15B transportation budget and provide Boeing with the Biggest tax break in history. Yet, funding education seems to be a problem.

Olympia funds what it wants to fund- don't kid yourself.

Melissa Westbrook said...

Ray, really? Then everyone in government is "subsidized" or you could consider them public servants who do the work of government that is instrumental to all our lives.

And absolutely profit belongs to the company and its shareholders. But I, as a taxpayer, don't have to subsidize that. Sorry.

Anonymous said...

Eric B-- Very well stated. I personally am feeling frustrated at our state's inability to tax accordingly to fully fund education, as well as a light rail system. We need both. It is really nuts. Back East in many places they have really excellent public schools (1/2 class size of Seattle), great infrastructure, even lower crime in many areas etc, but higher taxes. I personally see a connection! Seniors as well as lower to even middle class people in these areas also qualify for property tax reductions and exemptions. Our state is doing great economically and our urban area especially in Seattle is booming. We REALLY need to be taxing accordingly, a state income tax & higher property taxes as well. An even higher sales tax is regressive and I am less in favor of that tax. Can someone in the know please enlighten me as to why a state income tax is so hard to pass in this state given the education funding crisis?
- bewildered

Melissa Westbrook said...

I've only been here about 28 years so hard for me to know for certain why an income tax is so reviled. But here's what I think are some reasons:

1. A kind of weird pride that we don't have one
2. A fear that with an income tax plus property taxes that our taxes will go thru the roof.
3. A fear that the sales tax wouldn't go down at the same time and that means even more taxation.
4. The wealthy don't want it.

Anyone?

Anonymous said...

Melissa,

#2 and #3 are very strong arguments together against an income tax. If someone were to propose an income tax tied to lower sales taxes, lower B&O taxes and possibly lower property taxes, then we could have a reasonable discussion.

Momof2

Lynn said...

Momof2,

The point of implementing an income tax is to increase our overall tax revenue. Replacing sales and B and O tax dollars with income tax dollars does nothing for our schools. Our tax burden has to increase to pay for the things we need.

kellie said...

The heart of the issue is that taxes, both the sources of taxes and the revenue from taxes, are ultimately a limited resource. As such, the conversation needs to shift from whether or not something is "important" to what are the "priorities of importance."

Education is important. Transportation is important. Effective infrastructure state wide, where people can get to work and aren't lost in gridlock, is important. Tax structures and incentives that create jobs are important.

I am really glad that RC is having the conversation about the opportunity costs of doing important things. Every decision to fund something is also a decision to NOT fund something else. This is an important conversation because there are no easy answers.

There are no easy answers for the same reason that the part of Washington State that votes FOR taxes are the areas that also export tax dollars to the rest of the state. And conversely, the areas that vote AGAINST taxes are the ones that are net recipients of tax dollars.


Anonymous said...

Many places back east have had larger populations for a very long time. They had many years to create a better infrastructure. Higher and more sources of taxes to fund excellent schools, transportation etc. WA state (& puget sound especially) in contrast is experiencing growing pains and during a time when our politics are also very polarized against any taxes.
-bewildered

Lynn said...

Our schools have been underfunded since the 1970's if not earlier. That's not related to the current population boom.

E. Coast said...

'Back East in many places they have really excellent public schools (1/2 class size of Seattle), great infrastructure, even lower crime in many areas etc, "

I would like to know more about the specific area for which you refer.

In general, I've seen east coast schools reflect the quality of neighborhood socio-economics.

Some on the east coast, experience heavy tax-burdens. They pay federal, state, city, sales, commuter, property tax etc. Similar to Seattle, cities pay higher amounts of taxes and these dollars get spread through-out the state. Individuals are experiencing increased taxes and their school districts are loosing funding. If we lived in a particular part of the east coast, I can tell you that Seattle homes would be taxed between $12K-$17K per year.

The elderly get property reductions, but the burden is shifted to young adults; the same individuals that try and pay student loans, start a family and buy a home.

The high tax burden, in the east coast, does not guarantee that you will be provided funding for fire- fighters. There are many high taxed areas that have volunteer fire departments.

I don't agree that these same places have good infrastructure etc. In general, transportation- and other infrastructures- are crumbling.

McCleary will not allow our schools to be funded at pre-recession levels. My kids were in school before the recession and I can tell you that McCleary will not make all your dreams come true.

n said...

Hmm, I always thought that reducing the tax burden on the ultra rich resulted in the Feds no longer subsidizing education and infrastructure the way they used to. Reagan started it all (see Fareed Zacharias on CNN today) and people like Ray above believe that Wall Street (for-profit privateers) deserve the money. Government is the problem according to him. Why would we want to live in a decent country, eh Ray?

Until somebody has the power and the will to tax the rich again, we will never solve this problem. And forcing me to sell my house because I can't afford the property taxes anymore is not the solution in my opinion. But, for some of you and Ray and RC, that will likely be the solution. Thank you Ray and RC.

Kudos to Eric M. who always posts wisely and tells it exactly as it is.

Anonymous said...

n - you are correct. I just finished reading Bob Herbert's "Losing Our Way" and he does talk about how "St. Reagan" slowly & quietly changed it all by reducing the tax burden on the wealthy & corporations, and spends a lot of time talking about our crumbling infrastructure as a result. Something else I was reading recently brought up that in the new corporate mentality & obsession w/making money, they never once acknowledge that they didn't "make it" on their own. Government subsidies, tax breaks, using public resources (i.e. roads, schools, power grids, & other infrastructure) - rarely, if ever, acknowledged as part of their success, even though few of them would have succeeded without them. They feel no obligation to give back to society in return. This was contrasted with the companies of old, who treated workers well, gave back to society, and didn't have CEO pay completely out of scale with worker pay. The only modern company this article could point to that behaved even close to this was Costco. I'll have to find the article again, but the book was quite eye-opening, and yes, a little depressing to see how far we have fallen in taking care of our communities, our veterans, and oftentimes just in common human decency.

CT

Melissa Westbrook said...

I was listening to the Sunday morning talking heads on (CBS?) and they had the former governor of Utah. The discussion was about Trump and the governor said that government is NOT business. He said two important things.

1. He was folksy in saying, "Even the thinnest of pancakes has two sides." Most businesses don't want to deal with that and those in government have to.

2. Businesses are answerable to far fewer people than government entities and, if the owner of the business owns 51%, he/she is even less accountable to the stockholders.

seattle citizen said...

Thank you, Eric M. Pretty much nailed it.
And Ray, not paying taxes is getting a subsidy.
Not getting a raise to match inflation and paying for classroom supplies out of pocket is supporting Boeing's subsidy. Boeing pays for some arts with the tax break subsidy, yay, so that money that we give them that goes to arts we get back (or at least that money that doesn't go to Benaroya, the opera, and other arts that most Seattleites can't afford to attend.)
But it also goes to the Boeing Foundation's support of reformy crap that no one but they and Gates wanted. So they're using they money we give them to pay for the privatization of public education. Yay.

Anonymous said...

For decades, there have been thousands of senior Democratic elected officials & policy wonks & communications & media & press & ... whatevers making well over $100,000 a year. For decades, we've been trapped in some right wing phantasy land about taxes because the right wingers are really good at spinning their phantastical stories, and the senior Democratic crowd couldn't be more incompetent, except when they're just self serving sell outs.

Amazon, Google, Microsoft, Starbucks, Boeing, ... ALL rely on hundreds of millions of people, everyday, getting on some local transportation network & going somewhere & getting some stuff. Without our transportation networks, our power (electricity etc.) networks, our networks of clean & safe water, our networks of reliable sewage, our safe and reliable networks of food production & distribution & preparation, our networks of 50,000,000 plus kids in K-12 schools, our networks of millions in higher education, our (dysfunctional) networks of health care employing millions & serving millions, our networks of trade, ... NO ONE NEEDS AN I-PAD-BERRY TO AMAZON GOOGLE SOME PLANE TICKETS.

Now, in Liber-Turd-Ville Math you can just lop off and just starve whatever and whichever parts of these networks you want, cuz, you gots yourz!

The Fact is, billions of people don't have much of many of those networks - and - ya know what? Those people don't give a rat's butt about using their I-PAD-Berry to book flights through Goggle-A-Zon, because they don't have the basics, never mind enough for extras. The Fact is, once you've wrecked enough of the community and enough of the society, we're gonna be living in some kind of Mad Max / Robo Cop / Blade Runner dog eat dog enormous hell hole.

I don't know how you sell this, other than to stop supporting the incompetent. BTW, I already have a day job and it isn't opponent to community wreckers, and I'm not making 6 figures a year.

Ya know how "A Hard Rain's Gonna Fall" sounds a hell of a lot better from Joan Baez than from its writer, Bob Dylan? Well, don't call

MeJoan