SPONSOR: House (Kissell)

COMMITTEE ACTION: Voted "do pass" by the Committee on Education-Elementary and Secondary by a vote of 16 to 4.

This substitute revises several sections that deal with calculation and distribution of school aid. In changes to the definitions relevant to state school aid, the substitute deletes the wording in the definition of operating levy for school purposes that had placed a 5-year limit on the use of the calculated levy in certain circumstances. Currently, the calculated levy, which is used in the funding formula to keep districts from losing state aid based on rollbacks required because of rising tax assessments, can be used for no more than 5 years after a district increases its levy above the calculated levy. In the funding formula, voluntary transfer students attending hold-harmless districts are excluded for purposes of calculating line 14 "at risk" moneys for those districts, and the base year (97-98) calculation is reset to exclude those students. The 1999-2000 per pupil amount in those districts will serve as the minimum until growth in the number of free and reduced price lunch-eligible pupils, used in calculating the line 14 amount, resident in district catches up to the 1999-2000 amount. The substitute also corrects a "notch" in the line 14(b) calculation for districts with levies between $2.76 and $2.93 that currently do not get commensurate credit for their levy over the minimum levy and adds a violence prevention categorical. The substitute permits districts to use textbook and incidental fund moneys to buy computers costing less than $500 and software and permits districts that educate alternative education students by contract to count the students as resident pupils. Effective immediately upon passage, certain districts that have overestimated their average daily attendance are permitted up to a 5- year payback period for excess school aid based on the erroneous estimate.

In addition, the substitute makes changes to the minimum teacher salary program, beginning with the 2001-2002 school year. The current minimum salaries of $18,000 for a beginning teacher and $24,000 for a teacher with a master's degree and 10 years of experience are left in place, and a new voluntary program is created with 5 tiers:

(1) $22,000 for those with less than 5 years of experience;

(2) $25,000 for those with at least 5 years of experience;

(3) $28,000 for those with at least 19 years of experience or a master's degree and at least 10 years of experience;

(4) $34,000 for those with a master's and at least 19 years of experience; and

(5) $40,000 for those with a master's and at least 29 years of experience.

Districts electing to participate must meet certain qualifications, among which are the following: (1) an operating levy no less than the 1999-2000 operating levy after all reductions and rollbacks (except for those required by the Constitution); (2) no increase to any voluntary rollback; (3) no fund transfers in excess of statutory limits; and (4) certain restrictions on salary schedules and placement on salary schedules. The district may receive reduced minimum salary aid under certain circumstances. Expenditures relating to minimum salaries must not be used to show compliance with any statute, specifically including the certificated salary compliance requirement.

The General Assembly is directed to make an annual appropriation to the Excellence in Education Fund for paying minimum salary supplements. If the amount appropriated is insufficient to fund the program fully, the minimum salary amounts may be prorated. Future $1,000 increases in salary levels are contingent upon a decrease in total state payments to 85% or less of the full funding cost for the first school year of full funding and will occur in the second fiscal year following such decrease.

FISCAL NOTE: Estimated Net Cost to State School Moneys Fund of greater than $2,200,000 in FY 2001, FY 2002, and FY 2003. Estimated Net Cost to General Revenue Fund of $27,000 in FY 2001, $4,703,750 in FY 2002, and $1,003,863 in FY 2003. Estimated Net Effect on Excellence in Education Fund of $0 in FY 2001, FY 2002, and FY 2003.

PROPONENTS: Supporters say that without a change of statute to permit repayment with interest over a longer period of time, Francis Howell School District will be forced, within one year, to repay all of the excess school aid it received based on its erroneous estimate of attendance. This will have a drastic effect on class size and other aspects of the district's academic programs, such as purchase of books that support the new math curriculum.

Testifying for the bill were Senator House; Dr. Dan Brown, superintendent of Francis Howell School District; Lyle Farmar, president of the Francis Howell Education Association; Barb Reiss, curriculum and instruction facilitator; and Donna Bauer, president of the Francis Howell PTO.

OPPONENTS: There was no opposition voiced to the committee.

Becky DeNeve, Senior Legislative Analyst