When it comes to controversy, education funding guzzles down ink and gobbles up air time like no other issue. Small wonder! Year in and year out, approximately half the state’s operating budget goes for our K-12 schools. About another 10 percent goes toward our colleges and universities.
We’re in crisis mode on the education-funding front. Handed down in January 2012, the state Supreme Court’s McCleary ruling ordered us to fully fund basic K-12 education by the year 2018.
This decision reflects a simple, undeniable reality: Our state constitution emphasizes that our “paramount duty” is making sure every Washington child receives a solid basic education. To get there, we must come up with an additional $4.5 billion for the K-12 portion of the budget.
We made progress last year by adding almost $1 billion in school funding. Initially in the 2013 budget debate, House Democrats suggested allocating $1.4 billion to keep us on pace with meeting the high court’s mandate. We sought to close a handful of outdated, expensive corporate tax exemptions as a strategy for strengthening basic education funding. However, the Senate rejected our plan, thus pushing the problem into the future — a future now staring us square in the face.
Are we going to live up to our moral duty as a people, and our constitutional obligation as a state, to ensure for all kids a good basic education? If the answer is “Yes,” then we’d better make sure that everyone pays a fair share. Common sense dictates that tax exemptions should go through the same intense scrutiny that each of our budget programs must undergo.
This year, House Democrats are advancing a supplemental budget and revenue package that includes key terms of House Bill 2038. The legislation converts our state’s nonresident sales tax exemption to a remittance program. What this means is that Oregon and other out-of-state residents will initially owe our Washington sales tax. But then they can apply to the Department of Revenue for a remittance of the sales taxes they paid in the previous year. This remittance program includes state and local sales taxes, and the amount of the remittance claimed must exceed $25.
The new revenue collected in this program, and other tax-exemption closures in the legislation, would go toward establishing an “Education Legacy Trust Account.” Such an account will advance our work toward meeting terms of the McCleary decision.
Oregonians don’t pay Washington sales tax. And yet, Clark County is one of the top counties — of all 75 counties in Oregon (36) and Washington (39) — in terms of money our residents pay for that state’s income taxes. The sales tax exemption is one of the top complaints I receive from constituents. Particularly in regards to vehicle registration.
Here’s a crucial tax truth to keep in mind: Washington today is the only state in the country that allows an out-of-state sales tax exemption — such as this one enjoyed here by Oregon citizens and our other out-of-state shoppers. By the way, the rebate system proposed in HB 2038 will allow our Washington businesses to keep their Oregon merchant connections for those big-ticket items. And very importantly, automobile dealers here in Washington won’t see any impact from this proposal.
Every day, tens of thousands of Washingtonians work across the river. They don’t get any breaks on Oregon’s state income taxes, because Oregon is not shy about using its tax money to pay for schools, parks, public safety, and other essential services. My constituents are demanding reciprocity: When Oregon folks shop in Washington, they should help pay for our schools, parks, public safety and other essential services. Considering that a good education for our children is on the line, it’s time for common-sense tax policies.