Gov. Jay Inslee on Monday signed legislation aimed at patching big cracks in a college-funding plan approved last year that quickly started coming apart in the wake of tax collection problems and underestimating the Washington College Grant program’s actual costs.
Whether the fixes will hold beyond this year or next is uncertain, but what is clear is that lawmakers, who approved the fix last week, must take off their rose-colored glasses when agreeing to provide reduced or free college tuition for low- or median-income students — or, frankly, any high-priced undertaking.
The concept of making higher-education more accessible, and targeting tuition breaks for those who can least afford the full rate, is sound. But the harsh realities of funding such an undertaking have to be considered.
State Sen. Jamie Pedersen, D-Seattle, who sponsored the legislative fix that was approved last week, told The Seattle Times recently that last year’s law “didn’t have a lot of time for development, either on the policy side or the funding side.”
The failed plan aimed to fund about 110,000 grants through a surcharge on roughly 82,000 businesses that rely on college-educated workers, such as Microsoft and Amazon. However, the Department of Revenue concluded the language in the law was so complex that the agency anticipated trouble with getting businesses to pay. And that proved to the case.
The law passed Thursday repeals last year’s surcharges and replaces those with a 1.75% rate for services such as architectural, legal and medical firms grossing more than $1 million annually. It also sets a 1.5% business-and-occupation tax rate for hospitals and services with less than $1 million in gross receipts annually, according to legislative analysis.
The 52-45 vote to approve in the House was essentially along partisan lines as all Republicans voted no to the proposals as did five Democrats from districts seen as up for grabs in the next election.
Many Republicans objected to the plan because they believed lawmakers should instead use the higher-than-projected revenue from existing taxes to fund college affordability. The new version of the plan is expected to bring in about $234 million over two-year budget cycle.
“Our projected revenue increases (for the entire state budget) alone since we left last year are enough to fund all of these college slots,” Rep. Brandon Vick, R-Vancouver, said during the House debate.
It’s a valid point. Yet, we continue to believe the best use of excess funds is to put them in a savings or reserve account. In that way, money will be available for emergency needs. This situation is not an emergency, but rather a result of poorly vetted legislation.
But given the Washington College Grant program needed a multi-million Band-Aid now, it makes sense to provide one by fixing the flaws in the original tax plan.
Let’s hope a lesson was learned.