Brief Description: Regarding school districts' levy bases.

Sponsors: Representatives Hunter, Tom, Anderson, Fromhold, Rockefeller, Ruderman, Jarrett, McDermott, Clibborn, Murray, Quall, Grant, Nixon, Moeller and Santos.

Hearing Date: 2/24/03

Staff: Susan Morrissey (786-7111).

Background:

In 1977 when the state assumed additional responsibility for funding schools, the Legislature limited school district maintenance and operation levy authority by passing the levy lid law. This law determines the maximum amount that school districts can collect through local maintenance and operation levies, also called excess levies. The original 1977 law, which took effect in 1979, sought to limit levy revenue to 10 percent of a school district's state basic education allocation. It also contained a grandfather clause that permitted districts that historically relied heavily on levies to exceed the 10 percent limit. The levy lid law has subsequently been modified 10 times. A number of the changes revised the calculation of a district's levy base. Under the 1977 law, the levy base was limited to the amount a district received from the state for basic education. In 1979, state categorical funding such as funds for transportation and special education were added to the base. In 1987, revenue was added to the levy base from certain federal programs and state block grants. In 1992, the base was further expanded by adding the percentage increase in state basic education divided by 55 percent. The current formula for the levy lid is: (levy base × levy authority percentage) + transfers maximum possible levy equalization Under current law, a district's levy base includes most state and federal revenues for the prior school year. The base is further increased by the percentage increase in state basic education funding per student between the prior and current school years, divided by 55 percent. Under the levy lid formula, most districts may request of the voters and collect 24 percent of the total state and federal funds received by the district (the district's levy base). There are 91 school districts that are grandfathered in at higher percentages that range between 24.1 percent and 34 percent.

Summary of Bill:

Each district's levy base, for purposes of calculating levy authority and levy equalization, is increased by the same percentage that the appropriations to school districts in the state omnibus appropriations act are decreased from maintenance level funding. These percentage changes are cumulative from year to year. When state appropriations increase from maintenance level, each district's levy base is decreased by half of the state appropriation increase. This percentage decrease will only be made to district levy bases when the cumulative percentage adjustments are greater than zero. A district's adjusted levy base will never be less than the actual revenues received by the district.

Appropriation: None.

Fiscal Note: Requested on 2/12/03.

Effective Date: The bill takes effect on 1/1/04.