Legislative Update

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Aid to Idaho schools in the upcoming fiscal year will increase by 9.2 percent over its current level under a measure approved by state lawmakers last week.

The $343-million school-aid appropriation for fiscal 1988 was slightly higher than Gov. Cecil D. Andrus's request for $342.2 million, but lower than the $356 million requested by Jerry L. Evans, the state superintendent of public instruction.

In taking final action on the measure, several senators strongly suggested that school districts use the higher level of state aid to raise beginning teachers' annual salaries to a minimum of $15,000, about $1,000 above the current statewide average.

Lawmakers financed the higher level of state aid by raising the state income taxes of residents in the top brackets by a total of $16.4 million.

Helen Williams, a spokesman for the state education department, noted that some districts will not see a 9.2 percent increase in state aid next year, because the legislature enacted a new school-finance equalization formula last month.

The formula is intended to increase funding for larger districts, and to require smaller districts to raise more revenue at the local level. Lawmakers and state education officials noted that smaller districts received a disproportionate share of state funds under the previous formula.

Smaller districts, however, will be "held harmless'' under the new formula, which stipulates that no district will receive less state funding than it received in the previous year.

Idaho has 116 school districts, some with fewer than 20 students. The new funding formula "might get more people thinking about consolidation,'' said Ms. Williams.--K.G.

The South Dakota legislature increased state aid to precollegiate education by $2 million in passing Gov. George Mickelson's proposed budget for fiscal 1988 late last month.

The $85-million appropriation for elementary and secondary education includes $500,000 to raise teacher salaries.

The legislature earlier voted to give every teacher in the state a $56 bonus next year. (See Education Week, March 18, 1987.) The bonus will not be added to teachers' base pay.

The bill to raise salaries also calls for financial incentives to encourage school districts to boost teachers' pay. But the measure will not go into effect until next year, because the state currently cannot afford to pay for the incentives, a spokesman for the state education department said.

During this session, lawmakers also approved a state lottery, which is expected to begin operating by September. Part of the revenue from the lottery--30 percent or $2 million, whichever is higher--will be earmarked for local governments, which could use it for school funding.

Lawmakers also enacted several technical revisions in the school-finance formula, which was changed last year in an attempt to equalize funding among school districts. The changes would increase aid to some districts that were unexpectedly penalized by the changes last year.

By drawing from the state's general-fund and school-construction accounts, Wyoming lawmakers were able to pass a fiscal 1987-88 spending bill that offsets most of a projected $113-million shortfall in revenue for precollegiate education.

But as part of the balancing act, lawmakers in late February cut school districts' guaranteed entitlement to state aid by 3.5 percent. Districts will be required to trim their operating expenses or fall back on cash reserves in order to make up the difference. The cut will reduce the state's school-foundation-program obligation by an estimated $14.5 million.

The foundation program is controlled by the legislature apart from the general-fund budget. It receives revenue from property taxes, mineral and oil royalties, and "recapture'' funds, which are excess revenues redistributed from wealthy school districts to poor ones. Districts receive aid on the basis of classroom units, but the number of students that makes up a unit varies according to the size of the district.

The decline in the price of oil is the main factor behind the foundation program's revenue shortfall, according to Lynn O. Simons, the state school superintendent.

"Schools fared extraordinarily well, considering the fact that they started out with a projected shortfall of $113 million,'' Ms. Simons said. Many districts will be able to absorb the cut in state aid because they "are sitting on sizable cash surpluses,'' she noted.

Lawmakers increased the upcoming biennium's appropriation for the foundation program to $225 million, up from $199 million in the current biennium.

But because local revenues for schools, which are also dependent on oil and mineral prices, have dropped dramatically over the past year, the increase does not represent a real gain in overall education funding, Ms. Simons said.

"As the local contribution for education goes down, the state's contribution must go up,'' she said, adding that lawmakers were not able to find enough money for the foundation program to avoid the cut in districts' entitlements.

Among other steps to bolster revenue for education, the legislature earmarked $46.5 million from the state's general-fund account for the foundation program.

It was the first general-fund appropriation for education since 1983, when lawmakers drew roughly $12 million from the general fund to meet foundation-program obligations.

In addition to drawing from the general fund, lawmakers also transferred amher more than $25 million from school-construction accounts.

The spending bill also supplements foundation-program revenues by recapturing more money from Wyoming's wealthiest districts. Currently, districts whose local-funding resources exceed their total state-aid entitlement may keep up to 25 percent of the excess, and the foundation program recaptures the balance. Under the spending bill, however, districts will be allowed to keep only up to 9 percent of the excess. The change is expected to add roughly $6 million to the foundation-program account.--B.R.

Vol. 06, Issue 28

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