Create a new tax in response to McCleary? Fuhgeddaboudit | Guest Commentary

Create a new tax in response to McCleary? Fuhgeddaboudit.

By Jason Mercier

Washington’s Supreme Court, in a 9-0 ruling, took the unprecedented step of fining the state for the Legislature’s failure to adopt a detailed plan showing how lawmakers plan to meet certain K-12 funding goals by 2018.

Washington Policy Center agrees with the brief filed by Attorney General Bob Ferguson that the contempt sanctions should have been vacated after the historic investments in K-12 by the Legislature this year.

Unfortunately the court disagreed.

Elected officials are now trying to figure out what to do, including trying to determine how the fines are to be collected and paid. Under the state Constitution, money can only be disbursed via an appropriation.

This may mean to enforce the Court’s fine lawmakers would have to vote on appropriations to fine the state.

As noted by the Seattle Times: “It’s not even clear how the fine — assessed by one branch of government against the others — would be paid.”

The court order “is not self-executing,” said Jim Lobsenz, an attorney who specializes in constitutional law. He cited Article 8, Section 4 of the state constitution, which says money can’t be paid without a vote by legislators.

“If the Legislature doesn’t appropriate money to pay the fine, then it won’t get paid,” Lobsenz said in an email.

The state is working to figure out how it will treat the fine, according to Ralph Thomas, spokesman for the state Office of Financial Management.

Some have said that, based on the ruling, the state should follow the example set by New Jersey in response to its K-12 court sanctions and adopt a new tax — like a capital gains income tax — for education spending.

In 1976 the New Jersey Supreme Court ordered schools closed during the summer  until lawmakers complied with its K-12 adequacy ruling. In response, lawmakers enacted the state’s first income tax.

Did that solve the problem? No, the New Jersey Supreme Court again ruled in 1990 that the state wasn’t funding K-12 adequately.  What did happen over time, is a continuous increasing of the original income tax rates set in 1976 and ongoing tax and budget challenges for New Jersey.

The top income tax rate adopted in 1976 was 2.5 percent. The top rate reached a high of 10.75 percent in 2009 and today maxes out at 8.97 percent.

While there may be many wonderful things about the Garden State, the stability and success of its tax structure isn’t one of them.

Now it’s possible Washington voters may warm from their consistent ice cold opposition to major — and even small — tax increases, but from a tax volatility and budget sustainability standpoint the response to creating a brand new tax in response to the McCleary ruling should be summed up in one word — fuhgeddaboudit.

Jason Mercier is director for the Center for Government Reform at the Washington Policy Center, an independent, non-partisan think tank promoting sound public policy based on free-market solutions.