Lawmakers Down to the Wire Twisting and Turning the McCleary Rubik’s Cube

Will they solve the puzzle in time?

Any day now lawmakers will reveal how they solved the McCleary Rubik’s Cube.

Democratic and Republican lawmakers have spent months twisting and turning the major pieces, trying to agree on the amount of additional money required to cover the state’s unpaid tab for public schools, where it should go, when to spend it and what will be the source of those dollars.

The last piece is the most difficult as House Democrats and Senate Republicans have never publicly agreed on the best means of raising the dough.

At this point, if you own property it is a good bet—maybe a sure bet—you will be paying more taxes to the state in 2018.

Republican senators put this notion on the table early in the year. They proposed a new tax of $1.55 per $1,000 of assessed value to fund education. House Democrats, along with Gov. Jay Inslee, countered with no property tax increase and a long list of reasons why it was a bad idea.

House Democrats eventually proposed a $3 billion tax package anchored by a new tax on capital gains, a higher tax rate on businesses, expanded taxation of Internet sales and a reform of the real estate excise tax. Republicans countered with two thumbs down and a double-dare for Democrats to actually pass the package—which they haven’t.

While the rhetorical debate continues between some of the partisans, negotiations between the House and Senate on a new two-year budget have moved on in search of a deal in time to avert a government shutdown July 1.

Inslee’s opposition to a property tax hike dissipated in May. Democrats are now reportedly offering to accept an increase in the statewide property tax, albeit less than the amount sought by the GOP.

What Republicans originally proposed would bring in about $1.52 billion for education in the next two-year budget and $4 billion in the budget after that.

The GOP suggested to phase it in with a 45-cent hike in 2018 and the rest added on in 2019. If the two sides actually settled at 45 cents—and they probably will end up a little higher—it would generate in the neighborhood of $500 million for the next budget.

Meanwhile, another good bet—maybe a sure bet—is the amount of property taxes one pays to their local school district will shrink as a trade-off. School districts have relied on those dollars for years to pay for what the state has not covered and theoretically won’t need as much in the future.

This is the essence of a levy swap, another confounding element of the McCleary Rubik’s Cube.

Republicans wanted to eliminate levies entirely in 2019 to achieve a full swap. Then, a year later, the GOP would allow levies to return but with a cap of 10 percent rather than 20 to 24 percent now in place around the state.

Democrats don’t want to mess with the levies, which they consider will still be a critical source of funds for districts. Way back in December, Inslee proposed a 15 percent cap.

Where they end up on this will affect the other pieces.

That means more twisting and turning to get everything lined up.

jcornfield@heraldnet.com

This story originally ran in the Everett Herald.


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