Republican state Sen. Steve O’Ban, standing, talks with fellow Republican Sen. Dino Rossi, seated far left, and caucus staffers in the Senate wings before heading into a meeting to hear details on a state budget deal on Thursday in Olympia. A new two-year budget must be signed into law by midnight Friday in order to avoid a partial state government shutdown. (Rachel La Corte/The Associated Press)

Details of state budget plan released: Property tax, online retail sales tax among provisions

By Rachel La Corte  

The Associated Press

OLYMPIA — A bipartisan budget agreement that has taken months to reach and addresses a court mandate on education funding looks at a mix of resources: An increase to the statewide property tax earmarked for education, a new requirement for all online retailers to collect sales tax and the closure of a few tax exemptions.

The details on the long-awaited plan were released in bits and pieces Thursday, a day after legislative leaders announced they had reached a deal between the Democratic-controlled House and the Republican-led Senate.

The education plan, which lawmakers said spends $7.3 billion over four years, also keeps in place local property tax levies but caps them beginning in 2019 at a lower level and requires they be used for programs that supplement basic education.

Two current tax exemptions — one on sales tax on bottled water and another on fuel extraction that benefits oil companies — are eliminated.

Legislative leaders said the budget complies with a 2012 state Supreme Court ruling that they must meet the state’s constitutional requirement to fully fund the state’s basic education system.

Lawmakers already have put more than $2 billion toward the issue since the ruling, but the biggest piece remaining of the court order is figuring out how much the state must provide for teacher salaries. School districts currently pay a big chunk of those salaries with local property-tax levies.

The court has said that the state has until Sept. 1, 2018, to do that, but that the details — including funding — must be in place before the Legislature adjourns this year.

Lawmakers — who started their regular 105-day legislative session in January — have had to go into three overtime sessions, and only recently reached agreement after overnight negotiations that ended Wednesday morning.

“I think this is a good solid budget and K-12 solution that basically brings equity to the state of Washington, both in terms of tax rate and in terms of funding for students,” said Republican Sen. John Braun, one of the budget negotiators.

Braun said that 73 percent of the state’s taxpayers will see a decrease in their overall property tax rate once the lower local levies are taken into account. The increase to the statewide property tax is by about 82 cents, bringing it to $2.70 per $1,000 of assessed value.

Democratic Sen. Kevin Ranker, one of the budget negotiators, said that the compromise plan “strongly supports Democratic values funded by a Republican property tax plan.”

The outline of the education plan provided Thursday sets a minimum starting salary for teachers at $40,000, with adjustment for inflation and regional differences.

Under the plan, the average minimum salary for instructional staff will be $64,000, and adding in regionalization, it will range from $66,194 to $82,081.

School districts can pay a salary over the maximum of $90,000 by up to 10 percent for educational staff associates or teachers who teach science, technology, engineering, math or in bilingual or special education programs.

Also under the measure:

• There’s a mandatory 10 percent increase after 5 years of employment.

• Starting in 2020-21, the minimum state allocations for salaries must be adjusted annually for inflation.

• Starting with the 2023 session, and every six years after that, the Legislature must review compensation to ensure it is adequate based on the market and economic differences between school districts.

Official budget documents were not expected to be released until this morning, the last day the Legislature has to pass the budget so that Gov. Jay Inslee can sign it by midnight to avoid a partial government shutdown.

Lawmakers were hesitant to release specific budget numbers due to the fact that the information is still being vetted and bills still need to be drafted.

Absent the passage of a budget, contingency plans for a potential shutdown are still moving forward.

Notices went out last week to about 32,000 state workers warning them they will be temporarily laid off if a budget is not in place by midnight today.

A partial shutdown would affect everything from community supervision of offenders on probation, to meal services to the elderly to reservations made at state parks.

Parks closed today

A spokeswoman for the parks said that they will likely need to close the parks today because they need several hours to prepare in case a budget isn’t passed in time.

That means that park staff will need to remove campers from the parks this morning, and day use visitors and new campers will be denied entry.

In addition to the state operating budget, lawmakers still need to address the capital budget that deals with projects across the state. Legislative leaders acknowledged they might need additional time this month to finish work on that and other lingering bills.

Democratic state Rep. June Robinson, standing, talks with fellow Democratic budget negotiators, Reps. Kristine Lytton and Timm Ormsby, seated right, and staff in the House wings before heading into a meeting to brief fellow lawmakers on the details of a state budget deal on Thursday in Olympia. (Rachel La Corte/The Associated Press)

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