SENATE BILL REPORT

SB 5477

BYSenators Gaspard and Wojahn; by request of Office of the Governor

Enhancing the financing and management of the state's schools.

Senate Committee on Education

Senate Hearing Date(s):February 24, 1987; February 25, 1987

Majority Report:  That Substitute Senate Bill No. 5477 be substituted therefor, and the substitute bill do pass and refer to Committee on Ways & Means.

      Signed by Senators Gaspard, Chairman; Bauer, Vice Chairman; Rinehart, Vice Chairman; Bender, Smitherman, Warnke.

Senate Staff:Don Bennett (786-7424)

                  March 3, 1987

AS REPORTED BY COMMITTEE ON EDUCATION, FEBRUARY 25, 1987

BACKGROUND:

Local school districts supplement state support for education by maintenance and operation special levies.  Prior law required the phase-down of district levy capacity to 10 percent of state basic education allocation for the previous year.  In 1985 the Governor appointed an advisory committee on school funding to review the issue and recommend appropriate levels of local support.  During the study, districts were allowed to freeze levy rates at either current actual rate, the statewide average, or the average for the educational school district in which the district is located.  The average levy rate is currently 18.4 percent of a district's levy base.  Current law provides that levies approved by voters in 1988, for collection in 1989, will be reduced by one-fifth of the amount over 10 percent until 1993.

The advisory committee discussed methods to equalize the local effort required to raise similar amounts of money for education in districts with widely varying property values.  Property owners in a district with low assessed valuation must pay a higher tax rate to raise the same amount of money a district with high assessed valuation can raise at a lower tax rate.

During previous legislative sessions, educational quality has been addressed through measures involving class size, use of resources, and staff compensation.  In 1986 the Legislature directed, through the budget, that fifty-one certificated staff be provided for every one thousand annual full time equivalent students in grades kindergarten through three.  The teacher- student ratio for grades four through twelve remained at fifty per thousand.  Minimum teacher salary was also set at $16,500.

SUMMARY:

For excess levies in 1987 and collection in 1988, districts maintain levy capacity provided in the 1985 freeze legislation, RCW 84.52.0531(5).  A district's base levy rate is the greater of its actual levy rate, the educational service district average levy rate, or the statewide average levy rate. 

A district's actual dollar levy capacity is determined using a base amount including the prior year state basic education allocation, plus state allocation for pupil transportation, handicapped education, gifted and compensatory programs, as in current law; plus an amount equal to the percent increase per full time student in the basic education appropriation between the prior school year and the current school year.

An existing prohibition of the use of levy funds to increase staff salaries is eliminated.  The limitation on increases in salary for staff paid solely from levy funds is also repealed.

For levies submitted to the voters in 1988 and collection in 1989, the levy amount shall not exceed the sum of 20 percent of the prior year basic education allocation plus:  20 percent of the prior year state and federal allocation for pupil transportation, handicapped education, gifted, and compensatory education; 20 percent of direct federal grants received; the percent increase in state basic education appropriation per full time equivalent student over the previous year; a non-high school district factor for tuition paid to the high school district receiving the non-high district's students.  This amount is then reduced by the amount of local effort assistance funding received for equalization of the district's levy rate in 1987.

Districts with levy rates in excess of 30 percent in 1987 will reduce rates to 30 percent for levies in 1988, to be collected in 1989.  A district with a levy above 20 percent, but less than 30 percent, is held harmless for 1988.  Beginning with levies submitted for approval in 1989 and beyond, the levy rate for districts in the 20 to 30 percent range will be gradually reduced as the state provides levy reduction funding to those districts.

Levy reduction is calculated by determining the district's maximum levy amount in dollars, multiplying the prior year levy rate and the base expanded by any new state appropriations.  New state appropriations for levy reduction are subtracted from this amount.  The resulting dollar amount is then divided by the maximum levy amount to determine the new levy rate.

Levy reduction funds are those state moneys appropriated for increases above the prior year appropriation which are not allocated for enrollment or workload increases, compensation, or inflationary increases.  Any increases not specifically designated otherwise by the Legislature are considered levy reduction funds.

Annual reductions in the levy rates continues until all districts previously exceeding 20 percent have reached the 20 percent levy lid.  No time certain is provided for the phase-down to be completed since reductions in levy rates are contingent upon increases in state funds to the districts.

Beginning in 1988, local effort assistance (LEA) funds are provided to districts with tax rates above the state average tax rate.  LEA is based on one-half the district's actual levy rate or a 10 percent levy, whichever is less.  The district receives the difference between its tax rate and the state average tax rate; times the assessed valuation of the district.  Any remaining levy amount to be raised is assessed at the actual tax rate.

The formula for allocating state funds to school districts is based on a ratio of fifty-one certificated instructional staff per one thousand annual full time equivalent students in grades kindergarten through three; forty-six certificated staff per thousand students in grades four through twelve; and four certificated administrators per thousand in grades kindergarten through twelve.  16.67 classified employees are provided for each one thousand full time equivalent students in grades kindergarten through twelve.

Certificated instructional staff, which includes all certificated non-supervisory personnel as defined in RCW 41.59.020(8), are paid according to a statewide salary schedule.  Beginning base salary for a certificated instructional staff person with zero years service and a bachelor's degree is established by the Legislature in the appropriations act.

All certificated instructional staff are paid a basic annual salary for a 185-day contract.  Increased salary may be bargained for additional time, additional responsibilities, incentives, or performance and is paid through supplemental contracts not to exceed one year in duration.  Such contracts are not subject to the continuing contract law. 

EFFECT OF PROPOSED SUBSTITUTE:

Maximum local levies are limited to 20 percent of capacity beginning with the 1989 collection year.  Levy base, for determining capacity, is increased to include direct federal grants and to reflect percentage enrollment increases.

Districts whose current levy rates exceed 20 percent are to reduce levy percentages by one-fifth of the percentage points above 20 percent in each successive biennium until all such districts are down to the 20 percent maximum by 1997 and thereafter.

The state will equalize the first 10 percent of any levy in an eligible low-assessed district.  The local effort assistance (LEA) provided by the state to eligible districts is counted as a reduction in such districts' levy capacities.

The state's basic education funding formula is increased over a ten-year period, to generate 55 certificated employees per 1,000 full-time equivalent students as the end result.  Classified employees continue to be funded at one per each three certificated employees.  The allocation system is separated into certificated administrative staff (at four per 1,000 in each biennium) and certificated instructional staff (beginning at 46 per 1,000 and increasing by one additional instructional staff per 1,000 FTE students each biennium, until reaching 51 instructional staff per student in 1997-98 in grades K-12).  During the phased-in increase beginning in 1987-88, and full implementation, the K-3 funding ratio will always exceed the 4-12 funding ratio by one certificated employee per 1,000 students.  During the phased-in increase the second year of each biennium, the classified employee funding ratio and the nonemployee related cost factor reflects the increase in the certificated instructional staff funding ratio during the first year of each biennium.

The enrollment counts at the district level commence with the fourth day of the school year, or the fourth school day in September for districts beginning school in August.

Districts are to maintain a maximum ratio of students per instructional staff with reductions each biennium of this ten-year plan.  During the 1987-89 biennium, districts must maintain a ratio of no more than 22.2 FTE students per instructional staff.  (The current statewide average is 20.67 to 1).  The ratio would be phased down during each successive biennium until the 1995-96 school year, when the maximum ratio shall not exceed 19.6 FTE students per instructional staff.

A statewide salary allocation schedule for certificated instructional staff is established.  (The schedule is similar to the LEAP staff experience schedule.)  It is for allocation of salaries only.  The MA column is adjusted to mirror the BA + 135 column.  The Phd + 45 column is eliminated.  Longevity for 20 and 25 years experience are added to the schedule, both beginning with the MA column.

Districts are granted the ability to exceed the pool for salaries available from the allocation schedule, but only by separate contract, subject to bargaining, for additional duties, responsibilities or other agreed upon items as determined locally.  Such supplemental contracts are for one year, do not obligate the state financially, and if not renewed, are not affected by continuing contract laws.

Fiscal Note:      available

Effective Date:September 1, 1987

Senate Committee - Testified: Dale Hoggins, Edmonds School District; Kris Van Gorkom, Washington Association of School Administrators; Dr. Frank "Buster" Brouillet, Superintendent of Public Instruction; Michele Radosevich, Washington Education Association