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Doomsday Scenario: A Court Order to Increase Taxes for K-12

In my story published Wednesday on the face-off over school spending in Washington state between legislators and the state Supreme Court, there's one scenario I didn't really explore but that Michael Griffith of the Education Commission of the States highlighted in a chat with me: the prospect that the Evergreen State's top court will order lawmakers to increase taxes to comply with a 2012 ruling.

On June 12, the state's top court said that unless state lawmakers can convince them otherwise, the justices will hold the state in contempt of court for not increasing school funding to the court's satisfaction, in light of its ruling in McCleary v. Washington.

Keep in mind that Washington state has no personal income tax. It also has no capital gains tax. Would lawmakers squeeze more from their current transactional taxes, such as the state's sales tax, to meet such a court order? Would they try to institute a personal income or capital gains tax, or would the idea of such new taxes lead them to the fainting couch? Or to yet another court?

More likely, Griffith said, lawmakers would grab their yellow legal pads and take the state Supreme Court itself to trial. He said that would make the situation the "story of the century" in terms of K-12 funding.

"It will go to the U.S. Supreme Court. I have no doubt in my mind," Griffith said, if the court orders a new tax.

As I discussed in my June 19 story, the New Jersey Supreme Court closed schools over the summer of 1976 as part of its disagreement with the state legislature over a new K-12 funding formula. Griffith also pointed out that as part of a school-funding lawsuit, Montoy v. Kansas, roughly 10 years ago, a trial judge recommended shuttering schools unless the legislature coughed up more cash for K-12 (which state lawmakers eventually did). So that option for the Washington state's top court has precedent elsewhere.

But Griffith said that no state court has ever ordered state lawmakers specifically to raise taxes for public schools. Lawmakers I talked to in Washington state seemed to downplay the idea that the court would hit the legislature with heavy sanctions over the McCleary v. Washington ruling. But there's no guarantee it won't.

As a bonus, below are two maps from the start of 2014 comparing states' income tax and capital gains tax burdens, courtesy of the non-partisan Tax Foundation (click to enlarge).

StateIncomeTaxes.PNGTaxesByState.PNG

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