I-884 would raise $1 billion a year for schools through hike in sales tax

Kris Anderson worries whether Washington State University will have room for her 14-year-old son when he applies for admission in three years.

The Tacoma parent thinks smaller class sizes would better prepare him and other students to meet the impending graduation requirement to pass the state’s 10th-grade test.

She believes Initiative 884, which would raise the state sales tax by a penny on the dollar, would help fill the resource gap by providing $1 billion more annually for preschool through college programs.

Jamie Daniels, mom of a third-grader and seventh-grader in North Thurston Public Schools, shares Anderson’s concerns about the availability of future college slots.

But she says the initiative’s tax hike would hurt low- and middle-income families while failing to address fundamental problems in the education system.

The two parents illustrate the dilemma confronting voters mulling I-884.

Most agree the state’s education system needs help, but is I-884 the way to fix it?

The initiative on the Nov. 2 ballot would raise $1 billion annually by boosting the state portion of the sales tax from the current 6.5 percent to 7.5 percent.

Proceeds would create the Washington Education Trust Fund to increase state spending on smaller classes, preschool programs and college enrollment and provide a one-time salary raise for public school employees. The trust fund would provide the revenue, and then some, to fully fund the education Initiative 728, which 72 percent of voters approved in 2000.

Instead of providing new money, however, the earlier initiative redirected existing state revenue to pay for lower class sizes and other specified school uses.

Last year, legislators grappling with a $2.7 billion shortfall only partially funded that initiative and suspended implementation of another initiative requiring annual cost-of-living raises for public school employees.

The League of Education Voters, the citizens group that sponsored I-728, spearheaded the new initiative.

“I-884 delivers on the promises we make to our kids,” said initiative spokeswoman Natalie Reber. “That every child arrives at school prepared to succeed. That they have the resources they need in K-12 for small class sizes, extra assistance and the best teachers. That every student that works hard has a place in our university and college system.”

The initiative’s ballot committee, Citizens for the Education Trust Fund, has the financial support of the Washington Education Association, numerous educators, business owners, and executives from Microsoft, Starbucks and Costco.

Bolstered by more than $2.2 million in cash and $76,000 in in-kind contributions, initiative supporters began airing television ads last week.

Their campaign purse dwarfs the $36,000 in cash and in-kind contributions raised by the initiative’s organized opposition, the League of Freedom Voters. Its largest contributors are the anti-tax group Citizens for a Sound Economy and the Building Industry Association of Washington. Daniels, the campaign coordinator for Freedom Voters, notes that I-884 would push the state sales tax rate to the highest in the nation.

And that doesn’t include local sales taxes that can boost the current tax rate total to as high as 8.9 percent.

Initiative critics say they support schools, but fear the economic impact of the higher tax. The Washington Policy Center projects the measure could result in 10,000 fewer jobs, especially in the retail sector.

Another think tank, the Washington Research Council, predicts the higher tax would slow growth of private-sector jobs in the short term, but notes that investing in education would produce more public sector jobs and could result in a more productive, better-educated work force that could attract new industry.

The state Office of Financial Management reports I-884 would cost about $215 a year in additional sales taxes for the median income family earning about $50,000 per year.

“We don’t believe the economy can handle higher taxes right now and families can’t afford to pay higher taxes right now,” Daniels said.

But supporters say the tax increase would be more than offset by a new federal law allowing Washington residents to deduct the state sales tax, saving an average of $519 to $575 for those who itemize their returns. Initiative proponents say schools needs more resources to prepare students for the new state graduation requirements that take effect with the Class of 2008, new federal requirements to raise student achievement, and the increasingly knowledge-based work force.

Overall, the initiative would annually provide $100 million for early childhood education and preschool, $500 million for public schools and $400 million for higher education.

That includes $93 million for the 3.6 percent raises school employees would have received if the Legislature hadn’t suspended the cost-of-living initiative.

In the 2005-06 school year, school districts would receive $520 per full-time student. They’d get additional dollars based on their rate of students who qualify for free- or reduced-price lunch or who are enrolled in bilingual programs.

For a district such as Tacoma, with a high rate of impoverished students and sizable number of English language learners, the initiative would yield an estimated $15.3 million in the 2005-06 school year. And that’s on top of the $7.8 million it’s slated to receive under the Legislature’s partial funding of I-728.

“That’s a significant amount of money,” said Tacoma’s chief financial officer Ron Hack, who oversees a general fund budget of about $280 million.

“We could reduce class sizes further, maybe expand all-day kindergarten, or extended learning opportunities like Saturday school, summer school or after-school programs.”

Another $7 million would be in store for Puyallup schools and $6.3 million for Bethel.

District officials would decide how to spend the money from options listed in the initiative. They could, among other things, hire more teachers to reduce class sizes, add guidance counselors or offer summer school, preschool, all-day kindergarten, advanced placement and dual high school-college credit programs.

To help offset the growing shortage of college seats, the initiative would fund 32,000 additional student slots over about five years at the state’s community colleges and universities. It would expand the number of Promise Scholarships awarded to the state’s top high school graduates.

To ensure the measure expands education funding, the initiative would ban use of the trust fund unless the Legislature first funds education at its current dollar level.

An independent citizens oversight board, including the state auditor, would monitor fund use and report to the public. Initiative critics argue that pumping more dollars into the current system won’t improve schools.

State spending on education – more than $6.5 billion for kindergarten through college out of a nearly $12 billion annual budget – has never been higher. But they contend it’s not spent effectively.

“In a nutshell, Initiative 884 expands programs that aren’t working,” said Marsha Richards, director of the Evergreen Freedom Foundation’s education reform center.

The state, for instance, continues funding bilingual programs that aren’t effective at helping students transition successfully into English classes, Richards said. It bases teacher salaries on experience instead of merit. Federal and state governments burden schools with volumes of bureaucratic rules that stifle creativity.

Richards fears that if the initiative passes, the public will think education problems have been resolved, postponing the reforms that she believes need to happen.

Anderson, an initiative supporter, doesn’t believe I-884 is the perfect solution, but thinks it’s the best option at this point.

As co-president and member of the Tacoma Council PTA, Anderson has watched Tacoma and other districts chip away at staffing and programs as revenues fail to keep up with rising costs.

“It just doesn’t make sense to have all these requirements and the funding not back it up,” she said. debby.abe@thenewstribune.com