Eyman proposal to cut state property taxes 25% would slash K-12 education funding

Tim Eyman has been telling everyone that he intends to file an initiative next January to cut property taxes by 25%. He has said it is “revenge” for the Washington State Legislature increasing the gas tax by 5 cents. Eyman has filed with the Secretary of State this year a number of draft versions of his “property tax initiative” for next year to slash property taxes, including both state property taxes and local property taxes. Two of these drafts propose to cut the state portion of the property tax by 25%. The others propose to cut local property taxes 25%.

It’s time to hear the other side. Reporters and others who are writing stories from Eyman’s e-mails need to quit being Eyman’s mouthpiece by repeating what he says without looking at the impacts on Washington State. Case in point –recent stories in the Seattle PI and the Seattle Weekly talk about Eyman proposals to cut state property taxes but make little or no mention of the horrendous impacts. People in the media are doing a terrible disservice to the citizens of this state by only talking about the tax cut side of Eyman’s proposals without mentioning the significant loss of money for public services like providing for the basic education of our state’s children. No one likes taxes but public education is not free. Just as our parents provided for our education we have a responsibility to provide for the education of our children.

Let’s rewrite the story with a little insight and truth rather than just repeating Eyman’s spin on cutting property taxes. With a 25% state property tax cut, Eyman proposes cutting the state K-12 education budget by $800,000,000 per biennium. Because the state property tax is dedicated to K-12 education, and with about 1 million children in K-12 education in our state, Eyman is proposing to cut $400 a year from the education of every child in our state. Shouldn’t the story be “Eyman proposes to drastically cut funding for our public schools”? Or “Eyman proposes to punish state students by slashing funding for basic education. Eyman wants ‘revenge’ because our elected state legislators decided not to listen to Eyman’s libertarian anti tax rhetoric but instead decided to address some of our state’s transportation problems by raising the gas tax 5 cents.”

Its time for the media to start asking Eyman how he proposes to pay for educating the children of this state if he wants to cut state property taxes. The same goes for any cuts in local property taxes that pay for our courts, our police, our firemen, our libraries, our water, our roads and all the rest. Its time to quit giving Eyman a pass on the tough questions. If he chooses not to respond, as he usually does, then let the people know.

Please refer to the following e-mail from Robert Butts in the Office of the Superintendent of Public Instruction in response to my questions for more detail on the impact of a 25% state property tax reduction:

—– Original Message —–
From: Bob Butts
To: ‘Steve Zemke’
Sent: Wednesday, October 15, 2003 11:27 AM
Subject: RE: Cutting the State Property Tax by 25%

Robert Butts
Assistant Superintendent, Policy and Partnerships
Office of Superintendent of Public Instruction
Old Capitol Building
Post Office Box 47200
Olympia, WA 98504
(360) 725-6022 (voice)
(360) 971-3625 (pager)
(360) 753-6754 (fax)

As we discussed on the phone, below are responses to your e-mail regarding the K-12 education impacts of Initiative 856, which would reduce the statewide common school property tax by 25%.

1) What would be the impact of cutting the state property tax 25% as proposed by Tim Eyman?

Attached is an Excel spreadsheet from the Department of Revenue that estimates the fiscal impact of the initiative. As you will note, the department calculates that the state common school property tax would be reduced by approximately $400 million a year. In the analysis, the department assumed that the reduction would begin in Calendar Year 2004.

2) Are these funds dedicated to K-12 education?

Yes, the state property tax is dedicated to our public schools in both the Washington State Constitution and state law. Article 9, Section 2, of the constitution states that “Both the entire revenue derived from the common school fund and the state tax for common schools shall be exclusively applied to the support of the common schools.”

The Revised Code of Washington (RCW 84.52.043), following the constitutional requirement, states that “…personal property taxing districts hereafter named shall be as follows: (1) Levies of the senior taxing districts shall be as follows: The levy by the state shall not exceed three dollars and sixty cents per thousand of assessed value …to be used exclusively for the support of the common schools…”

“Common schools” are defined as schools maintained at public expense offering programs in Kindergarten through grade 12.

In addition to these provisions, a major portion of funding for Initiative 728 is generated by the state school property tax. This initiative was passed overwhelmingly by the voters in 2000 and provides funding to reduce class sizes, provide summer school programs, and fund other K-12 programs designed to increase student performance. For the 2003-04 school year, $134 million of the state property tax will be used to specifically fund programs approved by the voters in Initiative 728.

3) What is the dollar figure involved?

See the attached spreadsheet.

4) How much money would this remove from the overall K-12 budget?

The answer will be dependent on how the legislature reacts to this major reduction in the state general fund and the loss of funding to the I-728 class size initiative. If Legislators conclude that the voters are sending a message to reduce property taxes and that voters were fully aware that the tax they were cutting was dedicated to public schools, they may choose to reduce K-12 “non-basic education” funding. The majority (88%) of K-12 funding is considered “basic education” and cannot be reduced due solely to state revenue problems. However, the remaining 12% of state K-12 finding is considered “non-basic education” funding and includes I-728 class size reduction funding, the highly capable program, funds that assist property poor districts (Levy equalization), and school improvement funding (Education Reform).

It is reasonable to assume that the 2005-07 biennial K-12 budget will be approximately $10.5 billion. If the Legislature chose to take all of the reduction in funding ($810,462,000) from K-12 funding, it would result in a 7.7% reduction in state K-12 education funding.

In terms of the impact on the K-12 system, $810,462,000 over the two-year period is enough to pay approximately 8,000 teachers, including salary and benefits, for two years. In the 2002-03 school year, there were 57,308 certificated teachers.

5) Is taxpayer money being wasted in the K-12 budget?

While there are occasional reports of specific examples of school district “waste” and financial accounting problems (e.g., Seattle), there have not been reports of widespread fiscal waste in the K-12 system. School districts are required to annually undertake a public budget development process that includes school board oversight and often a citizen panel. Because of the budget shortfalls faced by many school districts in the past several years, school districts have been required to closely review and identify expenditures to be eliminated. In addition, it is critical that school districts retain the trust of their voters to ensure passage of school district levy and bond elections, which provides an additional incentive for districts to manage funds prudently.

6) Are current levels of funding sufficient to meet the needs of K-12 education or are there programs and needs we are not funding?

International competition has dramatically increased the skills and knowledge required for individuals to earn a living-wage salary. In recognition of this fundamental shift in our economy, we have dramatically increased expectations for our students and, as a result, for our schools and teachers. On the other hand, however, the resources that we provide have been flat when adjusted for inflation. Attached is a summary of a report that was written last year by Glenn Pascall for the League of Education Voters that concludes the K-12 education system has “… more students with greater needs, higher expectations, and more costs and less buying power.”

This situation was exacerbated in the 2003-05 state operating budget. The Legislature cut $448 million from the maintenance-level budget for K-12 schools. The maintenance-level is the amount needed to fund inflationary costs and current law, including full funding for Initiative 728 (Class size reduction) and Initiative 732 (Educator cost-of-living adjustment).

A recent report by the Rainier Institute estimates that public schools in Washington need an additional $1.76 billion annually. See www.rainierinstitute.com/issues/education/summary.htm.

If you have additional questions, please to not hesitate to contact me.

Robert Butts

Copy of Excel spreadsheet information from
the Office of the Superintendent of Public Instruction:

Taxes Taxes
Due Loss Shift Due Loss Shift
CY03 0 0
CY04 382,586,880 0 FY04 196,573,000 0
CY05 393,609,301 0 FY05 388,250,000 0
CY06 405,000,607 0 FY06 399,462,000 0
CY07 416,677,009 0 FY07 411,000,000 0
CY08 428,625,626 0 FY08 422,816,000 0
CY09 440,820,669 0 FY09 434,891,000 0

FY03-05 Biennium 584,823,000 0
FY05-07 Biennium 810,462,000 0
FY07-09 Biennium 857,707,000 0

Links to recent news stories about Tim Eyman:

11/19/2003 Keep populism positive
Seattle Post-Intelligencer

11/15/2003 Eyman gets good lawyers
Seattle Weekly

11/12/2003 Legislators find the topic of taxes too hot to handle
The Columbian

11/11/2003 Taxes will top 2004 election menu
Seattle Post-Intelligencer

08/14/2003 PDC rejects complaint vs Eyman
The Olympian

07/29/2003 Eyman should come clean
The Seattle Times

07/23/2003 Government harassment won’t stop my tax fight
The Seattle Times

07/22/2003 No Place on Ballot Without a Lot Of Cash
Tri-City Herald

07/08/2003 Eyman asks donors for paycheck
The Spokesman-Review

07/08/2003 Help us with cash, Eyman asks
Seattle PI

07/08/2003 Eyman asks donors to give him a salary

07/04/2003 Eyman’s I-807 fails to qualify
The Spokesman-Review

07/04/2003 Eyman shutout of general election
Seattle Post-Intelligencer

07/04/2003 No Eyman-backed initiative makes the cut for fall ballot
Seattle Times

07/04/2003 Eyman’s Initiatives
Seattle Times

06/28/2003 An Election Without Eyman
Seattle PI

06/17/2003 No Vote on County Council Size
KOMO 1000 News

06/13/2003 Robbing Schools to Punish Roads
Seattle PI

06/12/2003 Tim Eyman: State Tells $4 Billion Lie
Seattle PI

06/10/2003 Eyman fund-raising down
Seattle PI

06/08/2003 Eyman to Float New Initiative
KOMO 1000 News

05/29/2003 Commission trying to move quickly on new Eyman investigation
Seattle Times

05/29/2003 Our View: Pity poor Tim Eyman –not!
The Olympian

05/28/2003 “Politics: Eyes on Eyman”
Seattle Weekly

05/28/2003 Eyman Defends his use of Legal Defense Fund
Seattle PI

05/23/2003 “Eyman’s latest fund raising investigated”
The Olympian

05/20/2003 Tim Eyman Legal fund investigated
Spokesman-Review (requires reader registration)

05/20/2003 “Watchdog studies Eyman’s Plea”
The Olympian

05/20/2003 “Tim Eyman’s Scam…Er, Plan”

05/17/2003 Eyman passing the hat for himself again
Seattle PI

05/15/2003 State panel dismisses complaint against Eyman
Seattle PI

05/07/2003 Strange bedfwllows in jail guards
Seattle PI

01/12/2003 Crashing the Eyman Party

01/07/2003 Political Opponent has Eyman’s Number
The Olympian

10/18/2002 Talmadge Slugs it out with Eyman
The Olympian

07/02/2002 Is Tim Eyman Lying

04/06/2002 Eyman investigation: 2 years of deception
Seattle Times

02/13/2002 Eat the State Politics with Bite

02/05/2002 Is Lying a Big Deal?
Seattle Times

02/05/2002 Eyman: I took the money, lied about it
The Seattle Times

02/05/2002 State Looking into Eyman’s Records
Seattle P.I.

Eyman Insists Legal Defense Fund Not Lining His Pockets

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