HOUSE BILL REPORT

EHB 1573

BYRepresentatives Ebersole, Wang, Betrozoff, May, Appelwick, Heavey, Valle, Walker, Locke, Holland, Cole, Pruitt, Ferguson, Horn, Dorn, Winsley and Jacobsen

Regarding identification of levy reduction funds.

House Committe on Education

Majority Report:  Do pass with amendment.  (17)

      Signed by Representatives Peery, Chair; G. Fisher, Vice Chair; Betrozoff, Ranking Republican Member; Brumsickle, Cole, Dorn, Fuhrman, Holland, Horn, Jones, Phillips, Pruitt, Rasmussen, Rayburn, Schoon, Valle and Walker.

House Staff:Susan Patrick (786-7111)

Rereferred House Committee on Appropriations

Majority Report:  Do pass as amended by Committee on Education.  (22)

      Signed by Representatives Locke, Chair; Grant, Vice Chair; H. Sommers, Vice Chair; Bowman, Braddock, Brekke, Bristow, Brough, Dorn, Ebersole, Ferguson, Hine, May, McLean, Padden, Rust, Sayan, Spanel, Sprenkle, Valle, Wang and Wineberry.

House Staff:      Janet Peterson (786-7136)

AS PASSED HOUSE MARCH 14, 1989

BACKGROUND:

In 1987 the Legislature enacted legislation to determine which money received by a school district could be counted toward a reduction in the calculation of district's "grandfather" levy authority.  This reduction would apply to districts with levy authority above twenty percent, until their authorized levies were reduced to twenty percent.  In 1987, levy reduction funds were defined as "increases in state funds allocated to a district that are not attributable to enrollment or workload changes, compensation increases, or inflationary adjustments recognized in the state allocation formulas."  Any other increases in state allocations from the district's allocations for the prior school year that were not specifically excluded in were considered levy reduction funds.

In 1988, legislation again defined levy reduction funds as enhancements in state funding formulas for basic education allocations; state and federal categorical allocations for pupil transportation, handicapped education, education of highly capable students, compensatory education, food services and state-wide block grant programs; and any other federal allocations for elementary and secondary school programs, including direct grants other than federal impact aid funds and allocations in lieu of taxes.  The 1988 legislation included language defining how to compute a formula enhancement.

SUMMARY:

The definition of levy reduction funds is changed.  Levy reduction funds shall mean increases in state funds that are not attributable to enrollment changes, compensation increases, or inflationary adjustments; and that are or were specifically identified as levy reduction funds in the appropriations act.  Levy reduction funds shall not include money received by a school district from cities or counties.

An emergency is declared and the act shall take place July 1, 1989.

Fiscal Note:      Available.

Effective Date:The bill contains an emergency clause and takes effect on July 1, 1989.

House Committee ‑ Testified For:    (Education)  Dan Reff, Bellevue School District; John Kvamme, Tacoma School District; Ken Watson, Seattle School District.

(Appropriations)  Dan Reff, Bellevue School District; Ken Watson, Seattle School District; and John Kvamme, Tacoma School District.

House Committee - Testified Against:      (Education)  None Presented.

(Appropriations)  None Presented.

House Committee - Testimony For:    (Education)  There are 60 districts which qualify for grandfather levy capacity.  They are not all large districts.  They include Pullman, Coulee, Hartline, Spokane, Carbonado and University Place as examples.  By adopting this approach the Legislature will always make clear what funds it intends to be considered levy reduction funds.  This will avoid the constant need to revise the definition of levy reduction funds in the statute.  This will also assure flexibility to meet unforeseen problems and needs.

(Appropriations)  In 1987, there was confusion over whether the new "block grant" qualified as levy reduction funds.  An Attorney General's Opinion said that it did.  The law was then changed so that districts could collect the revenue that they had been counting on.  This bill will avoid such confusion by requiring the Legislature to identify formula enhancements as levy reduction funds in the appropriations bill.

House Committee - Testimony Against:      (Education)  None Presented.

(Appropriations)  None Presented.