Senate Budget – Unconstitutional Fund Transfer?

In the Senate Republican budget they transfer $166 million of the “Common School Construction Fund” into the operating budget. The Treasurer does not believe he has the constitutional authority to make this transfer and has said so publicly. The Senate Republicans are waving a letter from their staff attorney that says it’s all right. I’m not a lawyer, but the arguments from the Senate staff sounded like counting angels dancing on the head of pins.

The constitutional language in question is in Article IX, Section 3

There is hereby established the common school construction fund to be used exclusively for the purpose of financing the construction of facilities for the common schools. The sources of said fund shall be: (1) Those proceeds derived from the sale or appropriation of timber and other crops from school and state lands subsequent to June 30, 1965, other than those granted for specific purposes; (2) the interest accruing on said permanent common school fund from and after July 1, 1967, together with all rentals and other revenues derived therefrom and from lands and other property devoted to the permanent common school fund from and after July 1, 1967; and (3) such other sources as the legislature may direct. That portion of the common school construction fund derived from interest on the permanent common school fund may be used to retire such bonds as may be authorized by law for the purpose of financing the construction of facilities for the common schools.

There is other language later in the constitution that the advocates argue makes it possible to shift this money around. Their argument hinges on declaring that the amount of money for school construction is adequate and that these funds are “excess.” Since they have to borrow money to replace the funds this seems a hard argument to make successfully. I have three pages of a list of local school district construction bonds that have failed in the last 5 years, totaling $1,865,605,845.

So

  1. They have to borrow money to replace the funds they are shifting to the operating budget, and
  2. Local taxpayers are trying, and failing, to pass bonds to fund school construction locally. Presumably they need these funds. I can get you a count of portables in the state, but it’ll take a few days.
  3. The McCleary decision requires us to add full-day kindergarten, reduce class size, and pay for more instructional hours, all of which require additional classroom space. The money we have isn’t adequate today – how will it be adequate in the future?

The Senate Republicans are reduced to doing this because they have an ideological aversion to taxes – they’d rather borrow this money for construction – paying increased debt service on it for the next 30 years – instead of recognizing that it is not feasible to write a budget that both complies with the McCleary decision and does not raise revenue.

Again, I’m not a lawyer. There may be some interpretation of the language that allows this to happen, but it’s a crazy thing to do. If you add $166 million of bonds every year for school construction when you could have been paying cash you get a growing crescendo of debt service to pay, in addition to paying the same costs. The plain language of the constitution leads you to believe that this money should actually be spent on school construction, not on operations.

 

About the Author

Ross
I am the Director of the Department of Early Learning for Washington State. I formerly represented the 48th Legislative District in the State House of Representatives, chairing the Appropriations committee and spent many a year at Microsoft.