FINAL BILL REPORT

2SHB 455

                                  C 2 L 87 E1

BYHouse Committee on Ways & Means (originally sponsored by Representatives Ebersole, Holm, Peery, Cole, Appelwick, Pruitt, Hine, Locke and Unsoeld; by request of Governor Gardner)

Enhancing the financing and management of the states' schools.

House Committe on Education

Rereferred House Committee on Ways & Means

Senate Committee on Education

SYNOPSIS AS ENACTED

BACKGROUND:

In 1977, the legislature enacted the Basic Education Act.  Prior to the act's passage, several larger Washington school districts experienced a series of school levy failures.  In addition, the original school funding court case was decided.  One of the 1977 Legislature's responses to these events was a plan to phase down districts' maintenance and operations levies to a maximum of 10 percent of state allocations.  However, the 1977 act granted most districts "grandfather" levy authority above 10 percent to cushion the levy lid's immediate impact on school district revenues.  Since that enactment, the levy lid statute has been amended a number of times to postpone the phase-down to 10 percent.

In 1985, the legislature amended the Levy Lid Act to keep districts' maximum levy percentages constant for 1986 through 1988.  This amendment maintains the levy lid at the district's 1985 levy percentage or the 1985 state or Educational Service District average, whichever is greater.  As a result, the levy lid is higher than 18 percent in all districts.  The 1985 legislation retained the goal of phasing down the maximum levy to 10 percent.  Unless further amended, the levy capacity phase-down would resume in 1989, with a 10 percent lid implemented in 1993.

Also in 1985, the Governor appointed an Advisory Council on School Funding to study and make recommendations on school funding issues.  The council's discussion of the role of levies addresses the issue of disparities in local taxing effort.  The council noted that a district with a low assessed valuation per pupil must assess a higher tax rate to support the same program level that a district with a high assessed valuation per pupil can support at a lower tax rate.

The Governor's Advisory Council also reviewed state allocation formulas and school employees' salaries.

Under the Basic Education Act, the staffing allocation formula is set at 50 certificated staff per thousand students.  In the legislative budget adopted in 1985, the staffing allocation for kindergarten through third grade was increased to 51 certificated staff per thousand students, effective in the 1986-87 school year.

Since 1981, the legislature has limited school employee salary increases granted by school districts to the increases provided in the state appropriations act.  The state also controls average salary levels for certificated and classified staff and, since 1984, has prohibited school districts from distributing salary increases disproportionately to administrators.  Within these limits, school districts maintain their own salary schedules.  In the 1986 supplemental budget, the legislature provided funding to establish a minimum salary of $16,500 for teachers in all districts.

SUMMARY:

SCHOOL LEVY LIDS.  The five-year phase-down of school levies to 10 percent of state allocations is eliminated and replaced with an indefinite phase- down to a 20 percent lid.  Districts below 20 percent would be authorized to increase levy amounts to 20 percent, effective for levies collected in calendar year 1989.  Other districts would be authorized to retain current levy percentages up to 30 percent, with phase-down occurring only as state allocation formulas are enhanced.  Enhancements in state allocations, with the exception of enrollment or workload increases, compensation increases or inflationary adjustments, are measured as as "levy reduction funds."

A new base is established for computing a district's levy lid.  The district's basic lid calculation, determined by multiplying the levy percentage by the district's state allocations for the prior school year, is changed to allow the inclusion of most federal as well as state allocations.  Federal Impact Aid monies or Public Law 874 funds are not included.  A statewide factor is added for adjusting district allocations to a current year rather than prior year basis.  The current year adjustment applies to levies collected beginning in 1988.  The other enhancements to the levy base are effective for levies collected after 1988.

School districts are authorized to propose a two-year maintenance and operation levy, and/or a levy to support the construction, modernization or remodeling of school facilities at a special or general election.

LEVY EQUALIZATION.  A state program of levy equalization is established, to be implemented for levies collected in calendar year 1989.  Under this program, state matching funds are provided to districts in which the excess levy tax rate needed to raise a 10 percent levy is above the statewide average tax rate.  The first 10 percent of an eligible district's excess levy will be matched with state equalization funds.  The sum of five million dollars is appropriated for equalization, beginning in calendar year 1989.

STAFFING RATIOS.  The certificated staff allocation of 50 per thousand students is separated to provide for 46 instructional staff and four administrative staff. In addition, for allocations based upon kindergarten through grade three enrollment, the instructional staffing ratio is increased to 48 instructional staff per thousand students in the 1987-88 school year and 49 instructional staff per thousand students in the 1988-89 school year.

Districts are required to maintain a minimum staffing ratio of 46 instructional staff per one thousand students beginning in school year 1988-89.

SCHOOL EMPLOYEES' SALARIES.  Funds for certificated instructional staff salaries will be distributed under a statewide salary allocation schedule, for allocation purposes only, established in the state appropriations act.  Any salary factor in the statewide salary allocation schedule for an employee with a masters degree may not be less than the highest salary factor for an employee with a baccalaureate degree and the same number of years of experience.  No district may receive an allocation that is less than its 1986-87 average salary level.  The legislature may grant minimum salary increases using the 1986-87 average salary level as a base.

Although the statewide salary allocation schedule is for allocation purposes only, minimum salary levels are established. No certificated instructional employee may be paid less than the statewide salary schedule amount for an employee with a baccalaureate degree and no years of experience.  No certificated instructional employee with a masters degree may be paid less than the schedule amount for an employee with a masters degree and no years of experience.

Salary compliance provisions for school district administrative and classified staff are deleted.  For certificated instructional staff, school districts are prohibited from providing an average salary that exceeds the average salary level allocated by the state.  Fringe benefits at the level funded by the state or the actual fringe benefit level for the prior school year are to be considered salary for compliance purposes.  Districts may exceed these salary limitations only by supplemental contracts for additional time, additional responsibility or incentives. Supplemental contracts may be for one year only, and are not authorized for services that are a necessary part of the constitutionally mandated basic education program.

VOTES ON FINAL PASSAGE:

Regular Session

      House 71  27

First Special Session

      House 63  31

      Senate    26    13 (Senate amended)

      House             (House refused to concur)

      Senate    34    11 (Senate amended)

      House 71  16 (House concurred)

EFFECTIVE:September 1, 1987