Throughout last week's unanimous Washington State Supreme Court opinion, the justices repeatedly state that "ample funding for basic education must be accomplished by means of dependable and regular tax sources," a requirement that, so far, seems to have been glossed over in the comments of politicians and pundits. It's not just that the state is failing to meet its "paramount duty" to provide ample funding for basic education, it's that it has failed to provide a "dependable and regular" tax source to do so.
In other words, merely throwing more money at the problem won't satisfy the court's order:
The legislature must develop a basic education program geared toward delivering the constitutionally required education, and it must fully fund that program through regular and dependable tax sources.
It is through this requirement that the court had previously ruled out the use of local levies and federal grants as a means of meeting the state's paramount duty. But as the current fiscal crisis and corresponding K-12 education cuts have proven, our entire state revenue structure is arguably neither regular nor dependable as well. Which suggests that if the state is truly going to meet the court's demands, it must devise a new revenue mechanism to do so.
Which brings me to an immodest proposal: the Education Income Tax.
The proposal is simple. An income tax would be levied, dedicated solely to funding basic K-12 education, and that income tax would be the sole source of basic K-12 funding.
The Education Income Tax essentially takes K-12 spending out of the general fund and into its own budget with it’s own dedicated revenue stream, balancing a popular public service against a generally unpopular tax. And by walling off both K-12 spending—and the income tax that supports it—from the rest of the budget, it eliminates the possibility of budgetary tricks through the usual fungibility of funds.
How much would it raise, and what would it look like? Well, the state currently spends about $13 billion per biennium on K-12 education, a total the court suggests may be $2 billion to $8 billion short of what's needed. Split the difference and figure about $18 billion, a little more than half the projected revenue in the next biennium. This is no high earner's income tax, but rather a more broad based alternative that would reach well into the middle class.
But in return we could eliminate the state portion of the property tax (currently dedicated to education), slash the state sales tax from 6.5 percent to 3.0, and still have billions of dollars to target at further tax cuts or program enhancements, on top of the extra $5 billion for K-12. Plus, by replacing much of our highly regressive sales tax with a progressive income tax, the majority of Washington households would pay less in total state taxes, not more, as our most-regressive-in-the-nation tax structure (and by far) is substantially flattened in the direction of fairness.
Finally, no state relies more heavily on the sales tax than Washingtion—a tax that keeps pace neither with economic growth nor the cost of educating our children, whereas an income tax, over time, would reliably grow revenues commensurate with our needs.
Yes, there are downsides to such a proposal. Dedicated taxes seem to be popular with voters, but they violate basic principles of sound taxation. And a substantial rainy day account would have to be funded in order to buffer against the economic cycle. And yes, during a prolonged economic downturn like this one, legislators might ultimately be forced to raise tax rates and/or expand brackets in order to generate revenues sufficient to meet the funding requirements of our paramount duty. But, well, that's exactly the point.
If there's one thing that seems clear from the court's 79-page opinion, it's that basic education is not a matter of spending within our means. The minimal funding level necessary to make ample provision for the education of our children exists independent of the state's current fiscal health, and being the state's paramount duty, it is incumbent upon the legislature to make these provisions regardless of all other economic and political circumstances.
After extensive review over many years, state task forces and committees have concluded that the K-12 funding system is broken. The legislature itself abandoned its longtime funding model effective September 1, 2011. Following an eight-week bench trial, the trial court concluded that the State has failed to meet its constitutional obligations. Substantial evidence confirms that the State’s funding system neither achieved nor was reasonably likely to achieve the constitutionally prescribed ends under article IX, section 1. We affirm the trial court’s declaratory ruling and hold that the State has not complied with its article IX, section 1 duty to make ample provision for the education of all children in Washington.
We do not believe this conclusion comes as a surprise. Rather, the evidence in this case confirms what many educational experts and observers have long recognized: fundamental reforms are needed for Washington to meets its constitutional obligation to its students. Pouring more money into an outmoded system will not succeed.
An Education Income Tax, however unlikely the prospect may appear politically, would address the court's concerns, finally providing the dependable and regular funding source necessary to make ample provision for the education of all our children. Under this funding system, spending levels would be determined by need rather than projected revenue, and the only political decision left to legislators would be how to jigger the income tax rates and brackets in order to raise the necessary funds.
"[T]he K-12 funding system is broken," the Supreme Court ruled, a system that cannot be fixed without "fundamental reforms." The Education Income Tax would fix this funding system by replacing our over-reliance on a tax that cannot keep pace with the cost of educating our children, with one that does.
I suppose there must be other alternatives to fixing our K-12 funding system, but so far I've yet to hear one coming from the powers that be in Olympia. And so I'm offering the Education Income Tax as a starting point for further discussion.