The Seattle Times: Snohomish County News: Some small businesses call tax for schools too expensive

David Schaefer, a proponent of Initiative 884, speaks during a school-district education forum last Wednesday in Edmonds. He calls a sales-tax increase "the least unpopular" of possible taxes.

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Snohomish County K-12 schools would receive an infusion of $38 million per year under a proposed education initiative on November's ballot. Those funds, part of $1 billion in new state funding for education, would be spent by local school districts to meet the increasing demands for student achievement.

But the initiative's funding mechanism, a 1-cent increase in the state sales tax, has drawn opposition from some small businesses and chambers of commerce in the county, who say it would hurt retail sales and dampen the struggling local economy.

"The highest sales tax in the nation? That's not good for business," said Joe Shipp, the owner of Arrow Machining, a Marysville company with 22 employees.

Initiative 884 would raise the state's sales-tax rate to 7.5 percent from 6.5 percent. Currently, the nation's highest state sales-tax rate is 7 percent, in Mississippi, Rhode Island and Tennessee.

Though that's only a penny increase, opponents of the initiative note it amounts to a 15 percent tax increase. With local-option taxes added to that base rate, many Snohomish County residents would pay 9.9 percent in sales tax if the initiative passed.

The initiative, sponsored by the League of Education Voters, would create an Education Trust Fund with an oversight committee to monitor spending. The money raised would pay for smaller classes, expanded preschool and college enrollments, and teacher salary increases.

The Greater Marysville Tulalip Chamber of Commerce has come out in opposition to the measure, not only because of concerns about its effect on small businesses but because it fails to address what the chamber called an "outdated, overburdened, monopolistic education-delivery system."

Initiative 884

The education-funding measure on the Nov. 2 ballot would:
Raise the state sales-tax rate to 7.5 percent from 6.5 percent to pay for improvements to education across the state.
Provide an estimated $1 billion annually to expand preschool opportunities for low-income children, add enrollment at state colleges and give teachers cost-of-living raises.
Create an Education Trust Fund with a citizens oversight committee that proponents say would protect the money from diversion to other state programs and monitor the money's use.
Make available an estimated $500 million annually for K-12 education to reduce class sizes, pay bonuses to teachers in high-needs schools and add programs for struggling students.
Provide $400 million annually to go toward 25,000 enrollment slots at community, technical and four-year colleges, scholarships to the top 30 percent of all high-school graduates and expanded financial aid for needy students. Money would also raise teacher salaries.
Use $100 million annually to fund 16,000 preschool slots for low-income children.

"The whole system needs to be overhauled," chamber President Caldie Rogers said.

But the leaders of some high-profile businesses in the state, including Costco Wholesale, Washington Mutual and Microsoft, support I-884, arguing that economic development depends upon an educated work force. The measure also has the backing of some local executives.

Nick Eitel, the chief executive of Everett Shipyard, which employs about 60 people on the Everett waterfront, said his business needs "good people with good skills."

"I truly believe we're not doing a good job educating kids in this state. We're underfunding the system. I've looked closely at [the initiative], and I think it will result in more high-school graduates and a better work force."

Many educators in the county, including the presidents of Edmonds and Everett community colleges, support I-884, noting that it would expand opportunities from preschool to higher education, create room for 1,000 more students at each of the county's community colleges and add college scholarships for the top 30 percent of every high-school graduating class.

"This will open the door to more students at a time when our growth is expected to be high," Edmonds Community College President Jack Oharah said.

But critics of the initiative say more spots could open up at the community colleges by admitting only those students ready for college courses. Marsha Richards, the director of education reform for the Evergreen Freedom Foundation, a state group that supports free enterprise and limited government, said colleges spend too much money teaching skills that students should have learned in high school.

"Adding more money to the system won't fix it because the programs are broken," she said.

Proponents of I-884 say the initiative is the first to take a global approach to state education funding. The initiative would create 16,000 preschool openings for low-income students. It includes a cost-of-living increase for teachers, which was approved by voters in 2000 but never fully funded by the Legislature because of the recession and state budget shortfalls. The measure also would forgive student loans for teachers who went into math, science and special education, where there's a shortage of instructors.

Half the new money raised by the proposal would go to K-12 schools. The Edmonds School District would get $7.7 million more. Everett would receive an additional $6.8 million and Mukilteo $5.9 million, according to estimates by I-884 proponents.

Local districts could direct those funds to an array of educational options that include adding full-day kindergarten, reducing class sizes or adding after-school or summer-school programs to help struggling students.

David Schaefer, an Edmonds resident and the co-chairman of the local school district's bond measure last year, acknowledged that tax increases are unpopular. But he told a district education forum last week that a sales-tax increase was "the least unpopular" of possible taxes. When polled about a regional transportation package earlier this year, citizens indicated they'd rather pay sales taxes for schools than for transportation, he said.

Though a sales tax is considered regressive because it hits low-income families hardest, Schaefer said, many people consider it a good way to fund education because everyone pays and everyone benefits.

"The most regressive thing is not being able to get an education," he said.

Lynn Thompson: 425-745-7807 or lthompson@seattletimes.com

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