Three things are clear as the upcoming legislative session nears:
1.) Lawmakers face tough choices to fund public education and get out from under a contempt order for failing to do so this year;
2.) Increasing tax revenues will be largely swallowed by rising costs; and
3.) Cities will increasingly call for keeping more of the tax revenue collected within their borders.
The first two issues are complex enough, but the potential of the third is downright revolutionary. State lawmakers have been ruled in contempt of court by the state Supreme Court for failing to develop a plan to adequately fund public education following the McCleary v. Washington decision in 2012 that determined the state is not upholding its obligation to properly fund state schools. That translates to about $3.8 billion in new funding for education, which hasn’t fully materialized. Ways to cobble together dollars to reach that funding level will likely take up most of the legislative session. The state will have an estimated $2.5 billion in new revenue as the economy improves, but state budget watchers predict $1.8 billion of that will be required to cover rising costs of current services.
The political debates around those issues won’t stop cities and towns from continuing their effort to pressure state lawmakers to allow them more authority over their own funding. The umbrella term being used is “fiscal home rule.”
Tacoma City Council debated a draft of its proposed Legislative Policy Statement for the upcoming session that focused on the concept. The basic idea is for cities to have more control over raising money for municipal services. The flexibility would allow cities to move away from being so reliant on fluctuating funding sources like sale taxes and include more stable revenues.
“Fiscal home rule is an attempt to do things differently,” Tacoma’s Government Relations Officer Randy Lewis said. “I’ll acknowledge right up front here, this is a radical idea. This is very different.”
Cities and counties currently collect a host of taxes that are then forwarded to the state’s general fund. Local governments then receive a portion of that money back, and that portion is generally decreasing as state lawmakers seek ways to fund its own programs. The “home rule” movement among many of the state’s 281 cities hopes to change that dynamic.
“This proposal is just a set of ideas,” Lewis said. “There is nothing written down. If we don’t have the conversation then the other thing we'll do is what we have been doing.”
Council members were cautious about the concept without seeing those details. Councilmember Lauren Walker, who sits on the Association of Washington Cities board, worried that the idea pits cities against each other and could prompt state lawmakers to further cut municipal funding programs, for example.
The city could find itself giving up one state-funding source for more local authority to raise taxes, only to have those increases fail at the ballot boxes, therefore making local budgets even tighter, Councilmember Joe Lonergan said.
The council will have more discussion on the idea on Sept. 30, when it is set to approve its legislative priorities. The issue might also come up in December when the council will ponder its specific legislative agenda.
“I think it is a conversation worth having if for no other reason than that it sparks other conversations that might make it easier for us at the local level,” Mayor Marilyn Strickland said.