by John Stafford 

INTRODUCTION

Politically, the beginning of 2017 will be interesting and momentous – at both the national and state level.  At the federal level, the Republican Party controls the presidency and both houses of Congress, and there will soon be a conservative Supreme Court.  This is also a time of unprecedented GOP power at the state level. 

The GOP controls the governorship, state senate and state house in 25 states – an all- time high; the Democrats control this trifecta in five – lower than at any point dating back to and including the Civil War (when there were far fewer states).  It goes without saying that Americans should be prepared for a sea-change in public policy in 2017. 

At the state level, Washington is one of 20 states with divided governance – a Democratic Governor and a divided Legislature (a narrow Democratic majority in the House; a narrow Republican majority in the Senate).  This will extend the perennial difficulty of solving the state’s primary challenge:  complying with the McCleary decision and its requirement to significantly increase K-12 spending (which invariably leads to heated debate over the merits of a tax increase).  This article will briefly review the 2017 political landscape at both the federal and state level.

NATIONAL LANDSCAPE

In my view, anyone not preparing for the worst from the Trump administration isn’t paying attention.  The Trump cabinet is frightening.  It includes:  Rex Tillerson at State (a history of morally problematic oil deals, most notably in Africa); Scott Pruitt at EPA (denies climate change science, opposes the Obama Clean Power Plan); Rick Perry at Energy (denies climate change science, wants to close the agency); Ryan Zinke at Interior (denies climate change science); Tom Price at Health and Human Services (opposed to the Affordable Care Act); Betsy Devos at Education (pro-charter school and pro-voucher); Andrew Puzder at Labor (opposed to minimum wage increases and Obama’s expanded overtime policy); Jeff Sessions as Attorney General (was previously denied a federal judgeship — in part due to perceived racial bias); Steve Bannon as Senior Strategist (of alt-right, Breitbart News); Michael Flynn as National Security Advisor (purveyor, along with his son, of “fake news” stories); David Friedman as Ambassador to Israel (opposed to the two-state solution), and others. 

This administration will pursue further tax cuts for the affluent, the repeal of the ACA (already underway), school choice measures, repeal of Roe vs. Wade (efforts already underway at the state level), tariff-laden trade policy, nuclear arms proliferation, anti-minority policy (including a possible Muslim Registry, unreasonable immigration restrictions, increased deportations, the federal defunding of sanctuary cities, etc.), etc.  Paul Krugman comments on the motivations for repealing the ACA: “Why do the Republicans hate health reform?  Some of the answer is that Obamacare was paid for in part with taxes on the wealthy, who will reap a huge windfall if it is repealed, even as many middle-income families face tax hikes.  More broadly, Obamacare must die precisely because it’s working, showing that government action really can improve people’s lives – a truth they don’t want anyone to know.”¹ Krugman summarizes his views on prospects for the Trump administration: “All indications are that we’re looking at huge windfalls for billionaires combined with savage cuts in programs that serve not just the poor but also the middle class…²

Perhaps most concerning, the Trump administration is positioned to move in the exact wrong direction on climate policy.  The Seattle Times’ Danny Westneat writes: “Trump’s energy plan…reads like a Petroleum Association fantasy.  It calls for tapping trillions of dollars in oil reserves, opening up offshore drilling…, and mining ‘hundreds of years of coal deposits’…It’s why Trump’s cabinet is being filled with oil executives and climate change deniers.  The industry magazine Oil and Gas Investor called what Trump was assembling a ‘hydrocarbon cabinet.’”³ Thomas Friedman adds, “There is actually something ‘prehistoric’ about the Cabinet that Trump is putting together.  It is totally dominated by people who have spent their adult lives drilling for, or advocating for, fossil fuels – oil, gas and coal.”⁴ Federal Employees at the Department of Energy, the National Oceanic and Atmospheric Administration (and elsewhere) are taking measures to protect climate science research and data from Trump administration investigative and suppression efforts.  Friedman continues: “For an administration that lost the popular vote by such a large margin to suddenly take the country to such extreme positions on energy, environment and foreign policy – unbalanced inside by any moderate voices – is asking for trouble, and it will produce a backlash.⁵

I believe that 2017 will be an unmitigated disaster at the federal level.

STATE LANDSCAPE

Washington State’s Legislative Session begins on January 9.  It is important to note that national policy will impact state policy on myriad fronts, from health care (ACA repeal) to immigration (restrictions, deportations, the defunding of sanctuary cities), climate (Clean Power Plan repeal), federal funding levels for the Hanford cleanup, Common Core education standards repeal, etc.

In addition, the ethos of the Trump election is manifesting itself in a number of recent GOP state policy proposals.  There has been the predictable bill to require a two-thirds vote in the Senate to pass a tax increase.  In addition, Senator Doug Ericksen (R-Ferndale) has announced plans to propose a bill to criminalize protests that disrupt transportation and commerce (in what most analysts deem a clear violation of First Amendment Rights).  There is also a proposal to have Eastern Washington secede from the state (and naming it “Liberty”).  Another GOP will seek to comply with McCleary by merely amending the State Constitution to remove the clause claiming that establishing a quality education system is the “paramount duty” of the state.  (Observant readers will note the inherent problem of reconciling this cynical GOP proposal to deal with McCleary with the other cynical GOP proposal to deal with McCleary — “education first”⁶).  There is also pending legislation to make guns legal at sports stadiums, and efforts to roll back some abortion rights (e.g., via parental notification requirements).  Danny Westneat writes: “Trumpism is rising…So I’ve learned my lesson:  In this new era, I now take seriously even the most ludicrous-sounding ideas…These are not bills before the Alabama or North Carolina legislatures, but here.”⁷

The primary legislative challenge (as it has been for the past several cycles) will be to address McCleary.  The Seattle Times underscores the centrality of McCleary by asserting, “The Governor should increase the pressure by saying he will sign only education-related bills until the McCleary work is finished.”⁸ Complying with McCleary will require roughly $3.0 to $3.5 billion per biennium in additional spending (relative to a total biennium operating budget of around $40 billion).  The need to generate this funding will necessarily precipitate discussions about increasing taxes.  There will be five separate budgets developed to address this (and other) issues:  the Governor Inslee budget, the GOP House, GOP Senate, Democratic House and Democratic Senate budgets.  Negotiations will begin once all budgets are finished.

The only budget released thus far is Inslee’s.  It contains four tax increases, calling for over $4 billion per biennium in tax increases.  The first is a tax increase on service firms (e.g., law firms, architectural firms, musical groups) from 1.5 percent to 2.5 percent.  The second is a 7.9% capital gains tax (lower than the 9.9% tax in Oregon and the 13.3% tax in California) on high income individuals.  The third is a carbon tax of $25/ton on emitters.  The fourth is a repeal of tax exemption repeal in several areas, including bottled water and oil refineries.

I have argued repeatedly that the state needs a significant tax increase (we are now the 36^th lowest ranked state in the country in state and local taxes as a percentage of personal income), and that the tax increase needs to be progressive (we also have the most regressive tax system in the nation).  Inslee’s budget achieves these objectives.  He makes the following obvious observation: “It is not possible to fulfill the constitutional or moral obligation of the state of Washington without new revenue, that’s just a fiscal fact.”⁹ This set of tax increases has already been met with conservative derision.  The Seattle Times calls Inslee’s package, “…a breathtaking smorgasbord of tax and spend ideas…”¹⁰ And Senator John Braun (R-Centralia) states that, “There’s no way something like this comes out of the Senate.”¹¹ The all-too-familiar battle lines are being drawn.

It is worth noting the political calculus of McCleary that both sides may consider.  Some Democrats may be leery of taking a strong stand on a large tax increase for electoral reasons:  tax increases are seldom popular, and the Democratic House majority is tiny.  Most Republicans will not want to capitulate on tax increases for ideological reasons.  Thus, part of the calculation that both sides will make is whether to support a significant tax increase in the Legislature, or instead to again shirk this responsibility, thereby invoking Supreme Court intervention.  This would allow Democrats to avoid an electoral backlash and Republicans to blame Democrats (and the liberal Supreme Court).  Commenting on the Legislature’s tendency to abscond from its McCleary obligations, Senator Jamie Pedersen (D-Seattle) notes that, “Last year we spent more time on transgender bathroom legislation than education in the Senate.”¹²

A critical McCleary-related issue is the so-called “levy cliff.” In order to allow local school districts to raise the requisite funds for K-12 education while the Legislature determined how to comply with McCleary, local districts were allowed to increase their portion of education funding from 24% to 28% (local districts are limited in the amount of funding they can raise in order to minimize per pupil spending differences between districts).  This temporary local levy increase ends in 2018.  This means that if the State does not either extend the deadline, or raise state funding to comply with McCleary, local school districts will face funding decreases.  Seattle Public Schools Superintendent Larry Nyland writes:  “Seattle Public Schools is facing its largest budget crisis in nearly 30 years.  This is a manufactured crisis that should never have happened…The State is under court order (McCleary v. State) to fully fund what the Legislature promised in 2009.  Until the state fulfills its court-ordered constitutional obligations, cutting our voter-approved local levies needlessly harms students and teachers.  Seattle’s $30 million levy loss translates into hundreds of staff reductions of teaching, administrative and support positions…Without the Legislature’s immediate action, the future of quality education is in peril.”¹³

In addition to McCleary compliance and new taxation, there will be a number of key issues to address in the upcoming Legislative Session, including:  mental health reform; the creation of a new Department of Children, Youth and Families, comprised of a variety of existing departments currently housed elsewhere; increasing the State Need Grant for post-secondary financial aid; seismic upgrades and water testing for schools; changing the “malice” standard for establishing guilt in police use of force; Puget Sound cleanup; solar incentives; the carbon pricing plan from the Alliance for Jobs and Clean Energy — which is conceptually similar to Inslee’s plan; oil train safety; state funding for homelessness; ensuring “dark money” and “gray money” transparency in elections; a ban on assault weapons and high capacity magazines; and more.  Nonetheless, the central challenges remain McCleary compliance, new taxation, and the creation of an operating budget that these two issues will inform.

SUMMARY

Politically, we confront a tumultuous start to 2017.  At the federal level, there will be abrupt, pervasive and dangerous policy change.  I fear for the worst.  At the state level, the McCleary/new taxation saga will continue, with uncertain prospects for success.

John Stafford is a senior substitute teacher for Seattle Public Schools.  He is a former partner with Strategic Planning Associates, a corporate strategy management consulting firm in Washington, D.C.  He has a B.A. from Dartmouth College, an M.A. from St. Martin’s University and is completing an M.A. from the Harvard Extension School.  He is involved with the Democratic Party in South Seattle.

NOTES

1. Paul Krugman, Snatching health from millions. Published in The Seattle Times, 1/2/17, page A11.
2. Paul Krugman, Populism, real and phony. Published in The Seattle Times, 12/27/16, page A11.
3. Danny Westneat, Trump Set to Drill, Baby, Drill. The Seattle Times, 12/18/16, page B3.
4. Thomas L. Friedman, Trump’s Reckless Behavior. The Seattle Times, 12/15/16, page A13.
5. Thomas L. Friedman, Trump’s Reckless Behavior. The Seattle Times, 12/15/16, page A13.
6. “Education First” refers to funding McCleary, not with new taxation, but rather with cuts to social programs (i.e., fund education with existing tax revenues, and then allot the remaining tax revenues to social programs and other needs).
7. Danny Westneat, Allow Guns In Stadiums? Trumpism Hits Olympia.  The Seattle Times, 12/11/16, pages B1 and B3.
8. The Seattle Times Editorial Board, Inslee Should Lead ASAP on Education Reform. The Seattle Times, 11/13/16, page A14.
9. Joseph O’Sullivan, Inslee budget earmarks $300M to fix mental-health system. The Seattle Times, 12/15/16, p. B1 and B6.
10. Editorial Board, Governor Inslees’ budget starts debate for fully funding education. The Seattle Times, 12/17/16.
11. Jim Brunner, Inslee asks for B&O tax hike to fully fund schools. The Seattle Times, 12/25/16.
12. Brandon Maze, Capitol Hill senator says anti-protest legislation likely won’t gain traction. In Capitol Hill Times, 11/24/16, page 12.
13. Larry Nyland, State caused Seattle schools crisis. The Seattle Times, 12/28/16.

 Featured image is a cc licensed photo attributed to Jason Rosenberg