Guest Opinion

Sound Transit Financing Plan Jeopardizes Education Funding

The ST3 financing package consumes the oxygen in the room for virtually all other public services at all levels of government for years to come.

By Reuven Carlyle August 11, 2016

As our region explodes with growth, it is impossible not to daydream about Puget Sound's future as a global powerhouse. World-class public infrastructure—including Sound Transit's robust rail system—is a central piece of that vision, and I believe we are on the march toward transformational changes in the decades to come. Paris, New York, London, Seattle.

In 2015, I supported the sweeping $16 billion transportation package and the Sound Transit 3, 15-year, $15 billion authorization despite my reservations about the rail financing plan that I viewed as poorly constructed and inequitable. I spoke publicly at the time and worked hard but ultimately unsuccessfully to eliminate the property tax portion and replace it with a modest business and employee transportation fee.

Despite those reservations, I acknowledge I am excited that the long term investment in our legislative district is finally meaningful after years of paying for only indirect benefits across the broader region. I stand by my legislative vote supporting the measure and the importance of allowing the voters to decide.

And yet, as I review the updated financing plan in more depth, I continue to grapple on a deeply personal level with the genuine burden the Sound Transit proposal places on public education. It is unsettling at best to serve as a state legislator while Olympia is under a contempt order by the Supreme Court for failing to meet the state's paramount duty of fully funding public education. This is historic and unprecedented and we are recreating our educational finance plan for the next generation in real time. After putting an additional $2.5 billion into K-12 funding over the last three legislative sessions since the McCleary ruling, Democrats and Republicans are struggling to find a final path forward for the last $3.5 billion approximately. It's virtually impossible to reach that level of new education funding without reform to the state property tax and local school levies. The transportation finance plan makes that difficult but essential project dramatically more complex.

In 2015, the Legislature authorized Sound Transit to place before voters a plan that redirects $0.25 per $1,000 of assessed value of the state property tax dedicated to public education and instead spends those dollars on transportation. The state—at a time of critical need for education—transferred property taxing authority for the first time away from one million elementary, middle and high school students. This means, simply, that the taxing capacity isn't felt by King, Snohomish or Pierce county officials because they are not forced to engage in a choice between their local services and this portion of the property tax. But state taxpayers, and public education, do feel the pressure up close and personal. The management and use of state portion of the property tax is central to the final piece of the McCleary education case.  

To many, the $0.25 seems modest but, ironically, that revenue exists only due to Tim Eyman initiatives that restrict property tax revenue growth to 1 percent  The financing plan locks up the taxes through bonding in perpetuity and the decision can never be reversed. Ever. Further, given that 61 percent of the bonds are secured by sales taxes, delays in building out the system seem likely once the economy hits an inevitable speed bump and revenues decline. Bond payments come first. The growth assumptions used in the plan are based on post-recession projections and don't include the dip from the great recession. Regardless of politics or ideology or use of proceeds, we simply can't pretend that the financing plan is broad based, progressive or reliable.

As a state legislator with a passion for building the best education system in the nation, I am unsettled that the package consumes the oxygen in the room on taxes for virtually all other public services at all levels of government for years to come. The plan moves to among the very highest sales tax in the nation along with a major property tax increase. We need to be honest that the ability of cities, counties and the state to utilize the sales tax in the future as a new revenue source is effectively ended with this plan. The impact on property taxes at the city and county level is more uncertain but clearly substantial. In economic terms, the opportunity costs are extraordinary for years to come.   

Ultimately, of course, we need both a world-class education and transportation system, but we can't achieve that goal without a coordinated strategy to achieve both.

The Sound Transit financing plan arguably works well for Sound Transit. It's reasonable and understandable that they feel strongly they are operating within their authorizing environment of our current tax system. But it's a bold 21st Century spending plan with a lethargic 1990s financing plan. Why didn't they choose to be as courageous and innovative on the revenue side as they at least attempted to be on the spending side?  

As a state legislator I cannot in good conscience support an inequitable and unstable financing plan in one isolated silo of public services—no matter how valued and important to our future—that I believe will have substantial negative implications for public education in the years to come.

State Senator Reuven Carlyle (D-36, Ballard, Magnolia, Queen Anne)

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