SB 0989 Revises state school aid formula, reduces minimum levy to $1.25, increases income tax and sales tax
LR Number:4409S.01I Fiscal Note:4409-01
Last Action:02/23/00 - Hearing Canceled S Education Committee Journal page:
Effective Date:Referendum Clause
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Current Bill Summary

SB 989 - This act revises the state school aid formula and several related provisions, including state sales and income taxes.

STATE AID FORMULA - The levy-driven state school aid entitlement is revised by raising the guaranteed tax base per eligible pupil (GTB) from $122,000 (for the current school year) to about $340,000 per eligible pupil. No additional state aid is provided for levying a rate above the $1.25 minimum levy (per $100 assessed value), though a district may levy a higher tax rate and generate additional local revenue.

From this entitlement, all other forms of local wealth, including merchants and manufacturers replacement tax (M & M) revenues, are deducted. No income factor is included on deduction of local school tax revenues. Tax receipts from previous years shall be deducted at 100% rather than the current 90%. Proposition C sales tax revenues are distributed as state aid through the formula, not on a per pupil basis and are no longer a state aid deduct.

To the net entitlement, categorical funding is added on: transportation; special education; gifted education; career ladder; vocational education; and education and screening (Parents as Teachers). The line 14 categorical shall be weighted at 25%.

The state aid hold harmless is removed. Fund placement requirements are removed.

PUPIL COUNT - Double counting of summer school attendance is removed from definition of "Eligible pupils".

SETTING OF SCHOOL TAX RATES - Districts shall roll operating levies back by $1.50, except that they shall not be required to roll back below $1.25. A school district seeking voter approval for a higher levy shall hold a prior public hearing.

SALES AND INCOME TAXES - The act increases the state sales tax by one percent and increases corporate income tax to 6.75% and personal income tax to 6.5% for income above $10,000.

PROPOSITION C - The one cent Proposition C sales tax revenues are redirected through the basic state school aid formula payment rather than as a per pupil grant and the Proposition C tax rate roll back is eliminated.

FINES AND FORFEITURES - Fines and forfeitures shall be placed to the credit of the state school moneys fund and distributed statewide.

LAPSING OF DISTRICTS - The State Board of Education may not lapse a district for failure to be accredited.

This act is similar to SB 422 from 1999.

The act has a referendum clause.