HB 950 -- Funding for Public Schools

Sponsor:  Ballard

Subject to approval at referendum and contingent upon approval
of a constitutional amendment which prohibits raising school
taxes without a vote of the people, this bill replaces the
property tax basis of the school funding formula with a per--
pupil distribution (the foundation formula payment amount)
supported by a one and one-half-cent increase in sales tax, an
increase in the top bracket of personal income tax from 6% to
7%, and an increase in corporate income tax from 6.25% to 7.5%.
As of July 1, 2001, the school district operating levy in each
district is reduced by $2.75, not to go below zero.  Any amount
remaining above $2.75 is converted to  local revenue for school
purposes without further action of the electorate.  Minimum levy
requirements for eligibility for state school aid and
accreditation are eliminated.  Deductions for local wealth are
revised to eliminate local property tax, state-assessed railroad
and utility tax, and Proposition C receipts.  Categorical add--
ons are retained, but the formula for at-risk (free and reduced
price lunch) is revised to eliminate its basis in the guaranteed
tax base and minimum levy.  The bill makes many technical
changes to taxation sections to accommodate the change-over from
property tax to sales tax.