Give state Superintendent of Public Instruction Chris Reykdal credit for offering a bold plan to provide needed funding for gaps — and problems — created when the Legislature overhauled the funding of public schools to meet the Supreme Court’s demand that the state fulfill its obligation to fully fund basic education.
Unfortunately, Reykdal’s proposed $2 billion tax to offset property tax cuts and increase school spending might not be constitutional.
Reykdal on Tuesday called for the state to impose capital-gains tax on profits made from the sale of corporate stocks, bonds and other financial assets. It is estimated that tax would generate $2 billion over two years, half of which the school chief wants to use to offset a proposed reduction in the state property tax just raised by lawmakers.
While we, too, would like to see the property tax burden reduced, we believe that a capital-gains tax — which is essentially an income tax — is forbidden by the state constitution. No, it’s not a full-blown tax on what is earned by working, but it is nevertheless a tax on income.
Washington state voters have been staunchly opposed to an income tax since the 1960s. It has been, and we believe it still is, the third rail of Washington state politics.
Still, Reykdal correctly points out problems that have surfaced in the wake of the Legislature’s revamping of educating funding. What lawmakers did was raise the property tax rate across the state while capping in 2019 the amount of money local districts could collect from taxpayers with voter-approved levies.
The result was an infusion of cash this year. Some school districts in the state increased salaries scientifically for teachers.
This won’t necessarily be sustainable, particularly when the local levy funds decrease.
In Walla Walla, for example, the $1.50 cap per $1,000 of assessed value will go down about $2 per $1,000 from the current $3.51.
Under Reykdal’s proposed budget, $1 billion from the capital-gains tax would provide a $150 million boost in services for students with disabilities.
We agree they got short shrift in the funding deal.
Clearly more money needs to be raised or diverted from other areas of the state budget to meet important schools needs.
But proposing an income tax by another name isn’t the answer, it’s simply a good place to start a serious discussion about the need to provide more funding for students with disabilities.