More post-session roundup: Budget transparency, levy lift and school funding, taxes.

After last weekend’s late-night budget activity, we’re beginning to see more analysis of the legislative session. Below we round up some of the responses.

Budget Process

The Yakima Herald-Republic dings lawmakers on their lack of budget transparency.

Little, it seems, was done in the light of day — literally and figuratively — a cloak of late-night bargaining and voting all but blotting out transparency due the public. This is not the first time a Washington Legislature, like a frantic teen cramming for a final exam, has waited until the final weekend for their “big reveal” of budget apportionment. Both parties, in the past, have been guilty of such machinations disguised as procrastination, but just because it now is the norm doesn’t make it acceptable.

By the time every billowing decimal point settled, every rushed vote toted up, the Legislature did pass the first state budget to exceed $50 billion, with tax hikes to fund programs news, old and revamped.

In giving the Legislature a “mixed report card,” The Columbian also criticizes the process. 

But beyond kudos for managing to adjourn as scheduled and preventing the governor from calling an overtime session, this year’s Legislature receives a mixed report card.

Our biggest criticism involves the most pressing issue: The operating budget, which will pay for most state programs, policies and salaries for the next two years. The House passed the $52.4 billion budget on a 57-41 vote, after it had passed the Senate 27-21.

In hammering out a budget agreement, lawmakers worked long into the night over the course of several days. In the end, they approved more than $800 million in new taxes, including an increase in the Business & Occupation tax on large banks and a change to the real estate excise tax.

A similar criticism from the Daily Record:

The way the session ended with the rush to complete the budget with little or no time for public review will not win the legislators any good governance awards.

School Funding and Levy Lift

Legislative agreement on a levy lift also prompted concerns ranging from its effect on the McCleary agreement (we’ve previously discussed these) to disparate impacts on districts.

The Columbian wrap-up editorial says,

The Columbian editorially urged lawmakers to not lift the levy lid, arguing that the lid was the result of a hard-won compromise, that it protected taxpayers and that lifting it revives the possibility of inequities among districts and invites legal action.

Now that it has been lifted, we hope those predictions are unfounded. If the change helps improve outcomes for students throughout the state, we will express our support.

The Union-Bulletin remains concerned that the levy lift will compound future education funding problems.

Less than a year after state Supreme Court justices declared the state had properly implemented its plan to fully fund basic education, which included significantly reducing how much local taxpayers could contribute, the state Legislature on Sunday undid one of the key elements of the funding plan.

Specifically, lawmakers raised the amount of money school districts can collect from local levies, from $1.50 per $1,000 of a house’s assessed value to $2.50.

This puts the state back on a path toward inequity in school funding, which is exactly what the Supreme Court ruled was unconstitutional.

The Seattle Times published a long article analyzing the effects of the lift legislation. We encourage you to read it; it’s going to get complicated. Here’s a takeaway.

Two years after lawmakers overhauled the state’s school funding rules, school districts again are struggling to understand what, exactly, eleventh-hour changes to that system mean for their future finances.

Minutes before their midnight deadline Monday, Washington’s lawmakers voted to relax limits on how much school districts can collect from local property-tax levies starting in 2020. The decision came after months of politicking by school districts, whose leaders claimed the controversial 2017 policy that set those collection limits led them to project multimillion-dollar shortfalls…

But apart from some clear beneficiaries — such as Seattle Public Schools (SPS) — it’s unclear which other districts stand to gain from the change. At first blush, it appeared that some districts in more affluent areas still retain a significant advantage, with Seattle being able to collect more than $1,000 more per student than Yakima.

And a look ahead;

“Will it ever be enough [funding]? I don’t know,” said State Senate K-12 committee chair Lisa Wellman, D-Mercer Island, who sponsored the levy bill. Gauging the right amount of money for schools is a moving target, she said.

“We could play this game forever.”

The Daily Record is not pleased.

It would appear Ellensburg, if it wanted, could go back to voters will an additional request of $1 per $1,000 but how will people respond when they’d been told that overall tax levy rate (levies and bonds) will be manageable because the district would only need $1.50 for the education levy?

School officials across the state breathed a sigh of relief Monday morning because they now have some flexibility to meet their needs. But after years of receiving a generous grade of incomplete for their efforts to comply with McCleary, the legislators get an F in meeting their constitutional requirement for fully fund K-12 education.

Taxes

Among the less noticed tax increases adopted by the Legislature is the money legislators expect to take in by changing the sales tax exemption for nonresidents. It’s of particular concern along the Oregon-Washington state line, as The Columbian reports.

Shoppers with Oregon ID will lose their Washington sales tax exemption as they’ve known it under a bill approved over the weekend in Olympia.

Starting in July, the sales tax exemption for Oregon residents and some others, such as British Columbia residents, will no longer be in effect, according to the provisions of the bill, which was passed as part of the two-year state budget.

Starting in January, Oregon residents will need to submit an annual application to the Washington Department of Revenue to receive a reimbursement of paid state sales taxes totaling $25 or more. Only one application per calendar year will be allowed….

The state anticipates the change will generate nearly $53 million in fiscal years 2020-21.

Businesses expect a negative hit to sales.

On Monday, at least two Clark County retailers fretted what the change would do to their business. And both retailers said that unlike proposals in previous years, they were not aware of this one until contacted by The Columbian.

“It’s going to be devastating for many or the majority of businesses here locally in Southwest Washington,” said Debbie Runyan-Parker, owner and president of Runyan’s Jewelers, 327 N.E. Fourth Ave., in Camas.

“We’re just coming out of the recession and now they’re hitting us with this. It will definitely make a mark on how much business we do,” said Runyan-Parker, who estimated 20 percent of her store’s sales are to Oregon residents.

The News Tribune editorial board expresses both substance and process objections to another out-of-the-blue tax hike.

Forty eight hours is enough time for most people to digest their dinner. Fun fact: It’s also the estimated time the average human needs to digest a piece of chewing gum.

But 48 hours definitely isn’t enough time for the Washington Legislature to evaluate, debate and approve a new tax.

It’s not long enough for 147 elected lawmakers to hear from the public, including stakeholders who’d be hit hardest by the tax. And it’s not long enough to consult experts who can assess the consequences of imposing the tax, including the risk of lawsuits…

But Democrats threw caution aside in the last 48 hours by steamrolling a steep increase in the B&O tax paid by large, out-of-state banks, nearly doubling it from 1.5 percent to 2.7 percent. They’re counting on it to generate $133 million in the 2019-2021 biennium.

“It’s an enormous new tax on a significant part of our economy; it deserves more careful deliberation before we put it into law,” warned Sen. John Braun of Centralia, a top GOP budget writer and a voice of common sense as the proposal was debated in the Senate Sunday…

The timeline was so compressed, the process so flawed, that even some Democrats broke ranks. Sen. Mark Mullet of Issaquah, a veteran of the Senate banking committee, said the tax is a lawsuit waiting to happen; it likely violates the U.S. Constitution’s Commerce Clause, Mullet said, because it targets out-of-state banks.

More later as reviews continue to roll in.