OLYMPIA — Gov. Jay Inslee on Thursday unveiled a plan to give teachers a raise, including increasing the state’s portion of a teacher’s starting pay by nearly $5,000 next fall to help retention rates across the state.
The governor announced the proposal during the unveiling of his supplemental budget proposal, which makes some tweaks to the current $38 billion, two-year state budget that was adopted earlier this year. The new proposal includes putting more money toward covering wildfire costs and into the state’s mental health system.
The teacher proposal — which would bump the state portion of the teacher starting pay from $35,700 to $40,000 — is separate from the budget plan. It would cost about $100 million a year, something Inslee says can be done if four tax exemptions are closed or limited.
Inslee said a recent state survey shows that the state is facing a shortage of qualified teachers and substitutes and school districts are struggling with teacher retention. He says his plan will lead to more than 8,700 teachers receiving a raise ranging from $1,000 to $4,300. In addition to the base salary bump, his proposal provides a minimum 1 percent salary increase starting in the 2016-17 school year for all other teachers. Classified and administrative staff also would receive 1 percent raises under the plan.
To pay for the teacher raises, Inslee wants to:
Local lawmakers support Gov. Jay Inslee’s proposal to increase teachers’ salaries but said it shouldn’t be done on the backs of Southwest Washington businesses.
On Thursday, the governor released his budget plan and a provision that would give starting teachers a $5,000 raise.
Inslee’s plan includes paying for the raise by closing four tax exemptions. One would keep nonresident shoppers in Washington from getting a sales tax exemption at the register; instead, they would have to apply to for a sales tax refund later. Ending or altering the nonresident sales tax exemption is a perennial issue in the state Legislature.
“There is a way to give teachers the $5,000 without (changing the sales tax exemption),” said state Rep. Paul Harris, R-Vancouver. “That would hurt our economy down here, and honestly, I’m not willing to do that. There are other ways. I proposed a vaping tax that would bring in ample money.”
Sen. Ann Rivers, R-La Center, said Inslee’s proposal came off more “like a campaign document than an actual budget” proposal.
“I’ve never been a fan of closing the out-of-state sales tax incentive,” Rivers said.
Rivers questioned the amount of funds that would be raised by changing the tax exemption.
Inslee’s office projected a $55 million boost to the budget in the next two-year budget cycle.
“We won’t see the kind of windfall the governor’s projecting,” Rivers said.
Sen. Annette Cleveland, D-Vancouver, said she’s heard from too many businesses that rely on Oregonians shopping in their stores to be able to support altering the sales tax exemption.
“Any revenue that comes from the exemption wouldn’t really be realized,” Cleveland said. “It’s a faulty assumption. I would be very opposed to eliminating that and will continue to be opposed.”
Rep. Sharon Wylie, D-Vancouver, however was ambivalent, saying she could see both sides of the issue.
“Every year it gets closer to being eliminated,” Wylie said of the exemption.
Inslee said it’s time to change the tax break.
“The governor was clear these are tax breaks and loopholes that are either outdated or whose benefits don’t outweigh the urgent need for our students to have qualified teachers in the classroom,” said Jaime Smith, Inslee’s spokeswoman.
— Lauren Dake, Columbian staff writer
• Repeal a use tax exemption for extracted fuel used by oil refineries, expected to save the state $17.7 million in the next fiscal year that begins in the middle of next year, and nearly $41 million in the 2017-2019 biennium.
• Require nonresidents from states with no sales tax, like Oregon, to apply for sales tax refunds when they make purchases in Washington, instead of getting them automatically. That would save the state nearly $24 million in the next fiscal year, and more than $55 million for the following two-year budget.
• Repeal the sales tax exemption on bottled water, saving the state nearly $83 million over the next three years.
• Limit the real estate excise tax exemption for banks, saving the state nearly $107 million over three years.
“Having a classroom teacher to teach algebra right now is more important than some oil industry tax break,” Inslee said during a news conference to announce his budget proposal.
Republican Bill Bryant, a Port of Seattle commissioner who is running against Democrat Inslee in next year’s gubernatorial election, said that while he agrees that something needs to be done about the teacher shortage, he would pay for the raises out of the existing budget instead of through taxes.
“I applaud him for trying to do it, but I would reallocate resources rather than propose new taxes,” he said.
Inslee’s supplemental budget includes more than $178 million to cover the cost to fight last summer’s wildfires that burned 1 million acres and destroyed more than 300 homes. That money comes from the state’s emergency fund.
The budget also spends more than $137 million on mental health needs, including efforts to improve safety and improve staffing levels at the state psychiatric hospitals. The budget pays for about 62 additional positions, including 51 registered nurses. It also puts more money toward improving hospital staff recruitment and retention rates.
Lawmakers return to the Capitol next month, when the House and Senate will each present their own supplemental budget proposals during the 60-day legislative session that is scheduled to end mid-March.
In a written statement, Democratic House Majority Leader Pat Sullivan said Inslee’s proposal was “a good starting point for discussion.” But Senate Republicans’ main budget writer, Sen. Andy Hill, criticized the plan, writing that “the governor continues to offer plenty of ways to spend taxpayer dollars, but fails to provide a sustainable way to pay for it.”