Jay Inslee's opposition to levy-swap plan puzzling

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When she first saw the TV ad from Jay Inslee’s campaign, Lisa Macfarlane of Democrats for Education Reform had a one-word reaction.

“What!?”

The ad attacked Republican Rob McKenna for claiming to oppose increased tax rates while supporting something the Inslee campaign dubbed a budget gimmick from Olympia — shifting some local school levy capacity to the state property tax levy, sometimes called the state school levy.

The ad calls the concept “wrong for Washington,” and Inslee repeated the attack in last week’s debate with McKenna in Yakima.

The problem is, the proposal — termed the levy swap — is one of several means of meeting the state Supreme Court’s opinion in McCleary v. State. That’s the January ruling that Washington violates its own constitution when it comes to ample school funding.

And it is an idea being investigated by both Republicans and Democrats, including some of the Democrats’ top thinkers on school funding. By using it to attack McKenna, Inslee also is criticizing many in his own party.

Whether it amounts to a tax increase is itself debatable. The basic concept is revenue-neutral in that it collects the same amount of total dollars as the current combination of local school levies and state property taxes. And no district would get less money than it does now.

But Inslee hangs his tax-increase charge on the fact that it would likely cause tax increases in districts with higher property values while reducing them in districts with lower values.

Frank Ordway, the director of government relations with the League of Education Voters, one of the plaintiffs in the McCleary case, said the levy swap or something like it is needed to meet the court’s order to reduce use of local levies. The main reason levies have grown to unconstitutional levels is so local money could cover costs of basic education that past Legislatures failed to pay for. Once the state pays all costs, there are fewer demands on local levy dollars for local enhancements.

“The court said that reliance on local levies is not stable, secure or equitable,” Ordway said. And the proceeds from the levy swap will help the state meet the funding demands of McCleary even though, taken by itself, it won’t provide significant new dollars. But if it is not done, and the local levy is reduced without the revenue being kept in the system, the burden created by McCleary gets even heavier.

Ordway was especially unhappy with the way the ad suggests that the levy swap is some sort of state takeover when it says it will “allow Olympia politicians to set your new tax rate.” But making school funding a state issue rather than a local issue is exactly what the state constitution requires under the paramount duty clause and what the McCleary decision has ordered.

The campaign is not backing down, despite criticism from within the Democratic Party.

“We reviewed this proposal carefully and we don’t think it’s a good idea,” said Sterling Clifford, communications director for Inslee. He said there is no doubt that it is a tax increase for a large number of property owners. And he rejected suggestions that Inslee doesn’t understand the demands of the McCleary court.

“There’s no misunderstanding about what McCleary says,” Clifford said.

Not that there aren’t Democrats who oppose the levy-swap concept. The Inslee campaign asked House Education Committee Chairwoman Sharon Tomiko-Santos of Seattle to call. She said she thinks it reduces local flexibility and does nothing to increase funding. While she doesn’t dismiss it, she hasn’t heard anything to change her mind.

What is more puzzling than the attack itself is that Inslee doesn’t seem to need it.

Most polls show him well ahead, perhaps due to the even-stronger showing in Washington by President Obama. Doing something that will make it harder to wrestle with the issues posed by McCleary when it doesn’t seem politically necessary, raises concerns about Inslee’s understanding of the challenges he faces.

“It’s limiting his own options should he become governor,” Ordway said.

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