HOUSE BILL REPORT

HB 889

BYRepresentatives H. Sommers,  Ebersole, Brough, Allen, Appelwick and Miller

Authorizing an additional regular property tax levy for school districts.

House Committe on Ways & Means/Revenue

Majority Report:     The substitute bill be substituted therefor and the substitute bill do pass.  (9)

     Signed by Representatives Appelwick, Chair; Basich, Grimm, Holland, Madsen, Rust, Schoon, Valle and Winsley.

House Staff:Bill Freund (786-7093)

AS REPORTED BY COMMITTEE ON WAYS & MEANS/REVENUE MARCH 5, 1987

BACKGROUND:

The 1977 Legislature enacted common school funding reform.  The primary purpose of the reform was to comply with the Washington State Supreme Court's mandate that adequate state funding for basic education be provided, and that school district's ability to provide this program could not be dependent on passage of special levies.

The Legislature established a plan to increase state funding for education over a four year period and as an adjunct to that plan adopted the levy lid act to wean school districts from their heavy dependence on special levies.  The original levy lid act limited school district special levies to not more than ten percent of the state basic education allowance.  For districts having previous revenues greater than the state funding plus the ten percent levy, a grandfather clause allowed additional levy capacity.

The levy lid act has been amended frequently since its inception.  The effect of the amendments has been to substantially expand the base upon which the levy lid is calculated and secondly to increase the number of districts in "grandfather status".  Originally, the plan was to bring districts down to a ten percent levy gradually.  However, the Legislature has at least three times postponed the phase down plan. In addition to special levies there is a regular state levy of $3.60/$1000 of the true and fair value dedicated for the common schools.  In the early 1970's this levy was collected at the local level and then it was replaced with an equalized state levy.

Regular levies of post districts and public utilities are outside the constitutional one percent of true and fair value limitation on regular property taxes.

SUMMARY:

SUBSTITUTE BILL:  Subject to initial approval by the voters of a school district, school districts are authorized to levy a regular levy.  The rate of the levy may not exceed $2.00/$1000 of assessed valuation or a rate sufficient to raise the equivalent of a ten percent levy, whichever is the lesser.

A levy equalization plan is provided for districts which levy $2.00/$1000 and the levy amount is less than the equivalent of a ten percent levy.

Districts collecting a levy under the "grandfather" portion of the levy lid law are not eligible to collect a levy under this act.

The effective date of the bill is January 1, 1988 if HJR 4215 is approved by the voters.

SUBSTITUTE BILL COMPARED TO ORIGINAL: For levy equalization purposes, "assessed value" is replaced with assessed valuation adjusted to the state equalized value.

Effective Date:The bill will be effective for taxes levied for collection in 1988 and thereafter.

Fiscal Note:    Not Requested.

House Committee ‑ Testified For:     None Presented.

House Committee - Testified Against: None Presented.

House Committee - Testimony For:     None Presented.

House Committee - Testimony Against: None Presented.