SENATE BILL REPORT

SB 6155

BYSenators Bailey, Craswell, Johnson and Barr

Authorizing revenues from the state lottery to be deposited in the common school construction fund.

Senate Committee on Education

Senate Hearing Date(s):January 18, 1988; January 26, 1988

Majority Report:  That Substitute Senate Bill No. 6155 be substituted therefor, and the substitute bill do pass and refer to Committee on Ways & Means.

      Signed by Senators Bailey, Chairman; Kiskaddon, Vice Chairman; Bender, Benitz, Craswell, Gaspard, Lee, Rinehart.

Senate Staff:Don Bennett (786-7424)

                  January 28, 1988

Senate Committee on Ways & Means

Senate Hearing Date(s):February 3, 1988

Senate Staff:Ken Kanikeberg (786-7715)

AS REPORTED BY COMMITTEE ON EDUCATION, JANUARY 26, 1988

BACKGROUND:

State funds currently available for school construction projects are far exceeded by the demand created by school districts in which voters have approved bond sales for the local share of construction costs.  Bond issues were approved in some waiting districts up to three years ago. 

The current backlog is over $270 million in unfunded projects which have State Board of Education approval and for which local matching funds have been raised.  New projects will continue to be added to this backlog as school districts pass bond issues to raise the local share of construction costs.

School construction and modernization needs due to enrollment growth and aging facilities continue to exceed the income- generating capacity of state trust lands from leases and timber sales, the primary source for state school construction funds.

Voters rejected HJR 4220--the proposed statewide property tax to build up the permanent common school fund and the common school construction--by nearly a 2-1 margin at the general election last November.

State lottery games generated $193.9 million in FY 1987.  Of that amount, $77.56 million was transferred to the state general fund.  The balance of the lottery proceeds remained in the state lottery account for prizes and administrative expenses.  It is a widely-held public perception that the lottery directly finances education while revenue from lottery games actually accounts for less than 2 percent of the state general fund.

SUMMARY:

The lesser of $60 million or 75 percent of state lottery revenue transferred to the state general fund from the lottery account shall be transferred annually to the school construction funds as follows:  (1) $50 million or 80 percent of the amount transferred shall be deposited into the common school construction fund; and (2) $10 million or 20 percent of the amount transferred shall be deposited into the permanent common school fund.

EFFECT OF PROPOSED SUBSTITUTE:

The transfer of lottery revenue to the school construction funds is phased in beginning July 1, 1989.  Twenty-five percent of the amount transferred to the general fund in the 1989-91 biennium shall be transferred annually to the common school construction fund (80 percent) and to the permanent common school fund (20 percent).  For the 1991-93 biennium, 50 percent of the lottery revenue is transferred; 75 percent of the lottery revenue is transferred to the general fund in the 1993-95 biennium.  The 80/20 ratio between the common school construction account and the permanent common school fund is maintained throughout.  The effective date of the act is delayed to July 1, 1989.

Appropriation:    none

Revenue:    none

Fiscal Note:      requested January 14, 1988

Senate Committee - Testified: EDUCATION:  Leann Chaney, Washington State PTA; Ben Edlund, Moses Lake School District; Kris Van Gorkom, Washington Association of School Administrators