HOUSE BILL REPORT

HB 1915

BYRepresentatives Ebersole, Appelwick, Peery, Holm, Pruitt, Rasmussen and Todd

Specifying school district levy bases and levy reduction funds.

House Committe on Education

Majority Report:  Do pass with amendments.  (19)

      Signed by Representatives Peery, Chair; Appelwick, Betrozoff, Butterfield, Cole, Cooper, Ebersole, Fuhrman, Holland, Holm, Pruitt, Rasmussen, Rayburn, Rust, Schoon, Taylor, Todd, Valle and Walker.

House Staff:Susan Patrick (786-7111)

Rereferred House Committee on Ways & Means/Appropriations

Majority Report:  The substitute bill by Committee on Ways & Means/Appropriations be substituted therefor and the substitute bill do pass.  (21)

      Signed by Representatives Locke, Chair; Belcher, Braddock, Brekke, Bristow, Brough, Butterfield, Ebersole, Fuhrman, Grant, Grimm, Hine, McLean, Nealey, Peery, Silver, H. Sommers, Spanel, Sprenkle, Wang and B. Williams.

House Staff:      Janet Peterson (786-7136)

AS REPORTED BY COMMITTEE ON WAYS & MEANS/APPROPRIATIONS

FEBRUARY 7, 1988

BACKGROUND:

Currently, some school districts have "grandfather" levy authority which allows them to impose maintenance and operations levies equivalent to more than twenty percent of their state and federal allocations.  Under 1987 legislation, these "grandfather" levies would only be phased down to the twenty percent lid if state funding for programs in the levy base were enhanced.

During the 1987 legislative session, funds were appropriated for a new program of local education program enhancement.  These funds were included in the base for calculation of the levy lid, but at that time there was no specific reference to these funds as levy reduction funds.  These funds were considered levy reduction funds because they fell within the definition of levy reduction funds and did not fall within the definition of excluded funds.  Under the 1987 statute, "levy reduction funds" are any increases for programs included in the levy base, which are not attributable to enrollment or workload, compensation increases, or inflation.

SUMMARY:

BILL AS AMENDED:  Funds, other than state allocation formula increases, workload and enrollment increases, or inflation adjustments, will be considered levy reduction only if specified as such in the state appropriations act.

AMENDED BILL COMPARED TO ORIGINAL:  Local education enhancement program funds are retained in the base for determining a district's levy lid.  Provisions requiring that levy reduction funds be specifically identified in the appropriations act are added.

CHANGES PROPOSED BY COMMITTEE ON WAYS & MEANS/APPROPRIATIONS:  State funding increases that were added in the 1987-88 school year only count to reduce "grandfather" levy authority if they fall within the definition of "levy reduction funds" adopted by the superintendent of public instruction prior to February 1, 1988.  Specifically, state allocations of local education program enhancement funds in 1987-88 are not "levy reduction funds".  For future years, "levy reduction funds" are to be determined by comparing the state funding formulas for the prior school year and the current school year, as applied to the current school year's population, salary, benefits, and cost inflation levels.

The specific requirement that levy reduction funds be identified in the appropriations bill is deleted, and replaced with a revised definition based upon formula enhancements.

Fiscal Note:      Requested January 28, 1988.

House Committee ‑ Testified For:    (Education) None Presented.

(Ways & Means/Appropriations) Olaf Kvamme, Seattle School District; Bruce Mrkvicka, Office of Superintendent of Public Instruction; Michelle Radosevich, Washington Education Association; Dwayne Slate, Washington School Directors' Association.

House Committee - Testified Against:      (Education) Dan Reff, Bellevue School District; Karen Davis, Washington Education Association; Olaf Kvamme, Seattle, School District; Dick Harris, Washington School Administrators; and John Kvamme, Tacoma, School District.

(Ways & Means/Appropriations) None Presented.

House Committee - Testimony For:    (Education) None Presented.

(Ways & Means/Appropriations) Many school districts relied upon interpretations of "levy reduction funds" provided by the superintendent of public instruction.  An attorney general's opinion has now stated that local education program enhancement funds are to be considered levy reduction funds, thus taking some districts by surprise.  The block grant may not be continued in future years an therefore should not be used to decrease school district levy authority.  Levy reduction funds should be specifically identified by the legislature in order to avoid confusion.

House Committee - Testimony Against:      (Education) This will reduce the levy capacity of all districts by removing the block grant funds from the base.  This impacts not only grandfather districts, but those district who are already within the 20 percent levy lid.  The method of determining which funds are levy reduction funds is still open to interpretation and will lead to a continuing series of legal opinions and possible court cases.  It is better to clarify the matter once and for all.

(Ways & Means/Appropriations) None Presented.