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July 28, 2017

Dear Friends,

I wanted to provide some details about the 2017-19 operating budget the Legislature adopted late last month. Critically, it brings the McCleary saga to an end by investing $7.3 billion more into our schools through House Bill 2242. This means for the first time since the early 1980s, more than 50 percent of the operating budget — 53 percent to be exact — will be dedicated to K-12 education. In fact, by the end of the 2019-21 biennium, the Legislature will have increased K-12 education spending by a whopping $13 billion since the 2011-13 biennium — an increase of 98 percent!

Beyond this significant investment, House Bill 2242 makes the following policy changes:

• Increases state salary allocations by nearly $5.3 billion per biennium to equip all school districts with sufficient resources to recruit and retain high-quality staff;
• Establishes minimum and maximum salary levels to ensure an equitable distribution of funding for teachers in all districts at all experience levels;
• Increases starting teacher pay to a minimum of $40,000 per year, up 12 percent from current levels;
• Provides an annual automatic COLA to keep state salary allocations in pace with inflation;
• Eliminates a fragmented and unfair health benefit system that punishes working families and replaces it with a modern and uniform health benefit system modeled after the state employee health benefit system;
• Remedies our current regressive local levy system by capping local levy rates to provide tax relief to those in school districts where property valuations are on the lower end of the scale;
• Establishes a vigorous reporting and accounting system to ensure separation and tracking of revenues, thus providing transparency in both state funding and local decision-making and to prevent unconstitutional overreliance on local levies; and
• Increases the uniform state property tax to ensure equity between property-wealthy districts and property-poor districts, which will lead to property tax relief for taxpayers in many property-poor districts.

I wanted to briefly touch on the last bullet point above. Due to current maintenance and operation levy rates remaining in effect through next year, every district in the state will see increased property taxes before a new school levy cap is enacted in 2019 — set at $1.50 per $1,000 of assessed value. However, many 10th District residents will then see a property tax reduction in subsequent years.

In terms of the increase in funding school districts in the 10th will see as a result of this policy change, please take a look at the chart below:

As you can see, each of our school districts will be receiving more money from SY 2017-18 to SY 2020-21 under this new policy as compared to the previous policy.

While the policy changes to our K-12 education system are grabbing the headlines, other highlights of the 2017-19 operating budget include:

• Makes critical investments in our mental health system, increasing access to crisis walk-in centers and building on our efforts over the past several years;
• Makes a number of improvements to our state's foster care system in an effort to bring an end to the ongoing foster parent shortage;
• Invests in homelessness relief, assisting individuals with a history of mental illness and providing housing opportunities for homeless youth;
• Increases funding for the State Need Grant program, which assists the state's lowest-income undergraduate students;
• Provides a significant rate increase to child care providers, many of which are struggling; and
• No capital gains income tax, carbon tax, or business and occupation tax increase on service businesses;

I was hugely disappointed earlier this month when a key piece of the budget that would've helped spur economic development and job creation was vetoed by the governor. Republicans and Democrats in the House had agreed to extend the business and occupation tax rate aerospace currently receives to all manufacturing companies in the state. With his veto, the governor failed to recognize the essential role advanced manufacturing jobs play in our economy. On average, advanced manufacturing offers the highest wages for Washingtonians who do not have a four-year or advanced degree (around 60% of the workforce), and is essential for a robust middle class. We had a once-in-a-generation opportunity to make this critical sector more competitive with the rest of the world through this bipartisan agreement, but that opportunity simply vanished with a stroke of the governor's pen.

While I'm not happy with everything in (or vetoed from) the operating budget, I do think it will serve our students, teachers, families and communities well. Negotiators from both parties spent many long nights trying to reach a compromise that would reflect the values and priorities of all four caucuses, and I think they largely succeeded in that effort. They should be commended for their work.

Contacting me

I've received thousands of emails, phone calls and letters from constituents this session, and as I work to respond to each one, I just want to thank you for your continued input. It is always helpful in guiding my decisions as a legislator. Please continue contacting me, and I will do my best to respond as quickly as possible.

It is an honor to serve you in the Legislature.

Warm Regards,

Norma Smith