State Senate passes “levy cliff” bill delaying rollback in local school levies

The Washington state Senate yesterday voted to push back the date for reducing local school levies (ESB 5023). The issue has loomed as a complicating factor in lawmakers continue to struggle with how to meet their McCleary obligation for full funding of basic education this session. The House passed a levy-cliff bill as its first piece of legislation earlier this year. 

The Associated Press reports,

The Senate on Wednesday passed a measure delaying a deadline for a reduction in the amount of money school districts can collect through local property tax levies, something school superintendents have said they need as they ready their budgets.

After negotiations that involved the governor’s office, the chamber passed the measure on a bipartisan 48-1 vote, and the bill now heads to the House, which passed its own measure in January.

Senate Democrats had tried to pass a levy cliff measure Monday afternoon, leading to some unusual drama in the chamber, as reported by Melissa Santos in The News Tribune.

Though Democrats and Republicans in the state Senate had been exchanging offers since Friday about a plan to delay the so-called levy cliff, their disagreement spilled onto the Senate floor late Monday afternoon, with Democrats trying to force a vote on their preferred solution and Republican Senate leaders quickly adjourning to shut down the Democratic attempt.

The AP story provides some context.

School districts face a reduction in the amount they can collect through local levies starting next year, but the measure passed by lawmakers pushes that deadline off until 2019…

The House bill had stalled in the Republican-led Senate, which had included the delay within the GOP’s overall education proposal that passed out of the Senate last month. Republicans had argued that by passing the levy-fix bill separate from an overall plan, it would remove the pressure from lawmakers to finish the overall plan. Democrats had argued that the levy fix was needed first as school districts start planning their individual budgets.

The compromise bill that passed on the Senate floor Wednesday night include two changes that are pieces from the Senate Republican education funding plan: Starting next year, school districts would need to keep state and local funds in different accounts, and, also starting next year, local levies would need to be submitted to and approved by the Office of Superintendent of Public Instruction before going to voters.

The Washington Research Council highlights the compromise bill’s accountability provisions. The post first sets the stage.

Currently school districts are allowed to levy maintenance and operation (M&O) levies of up to 28 percent of their state and federal revenues. That maximum is scheduled to revert to 24 percent in 2018. This is the levy cliff…

Noting that both the House and Senate bills keep the maximum levy at 28 percent for 2018, the WRC adds:

Importantly, though, the Senate levy bill also includes accountability provisions similar to those in the Senate-passed education funding plan and the education plan proposed by Sen. Mullet. Under the Senate levy bill, beginning with levies collected in 2018, levy collections would have to be deposited in a local revenue subfund in order “to enable a detailed accounting of the amount and object of expenditures from the levy collections.”

Also, the Office of the Superintendent of Public Instruction would have to approve the programs and activities that would be funded via an M&O levy before the election. This would ensure that M&O levies “are not used for basic education programs.” 

Sen. John Braun, chair of the Ways and Means Committee and leader in the school-funding discussions, said in his remarks on the floor:

I rise this evening, frankly, in conflicted support for this bill. This is a bill that goes back on our promise in 2010 to make these increases temporary, that they would expire at the end of 2018. It is contrary to rulings of the Supreme Court that have said very clearly that we are unconstitutionally relying on local levies. And frankly I think it is another example of some of our unwillingness to address the real challenge in front of us. That is to truly solve the funding problem for our K-12 public education system.

But sadly, this levy cliff has become a distraction from our real work. So I’m going to support this.

I appreciate the good faith efforts by the other side of the aisle to try to find a compromise that not only addresses the levy cliff but moves us a little bit farther toward a solution. And I grant that there are small but meaningful changes toward a solution that will serve all of Washington.

I’m going to take the word of the other side of the aisle and the other side of the rotunda and the governor’s office that they are committed to finishing this project this year, that this isn’t just a path to kicking it down the road one more time. They have said that, and I’m going to believe them.

Compromise is tough. And it’s necessary. With the levy cliff swept away as a confounding factor (assuming House concurrence), it’s back to concentrating on a McCleary fix.