Compendium of Budget Information for the 2009 General Session
|Subcommittee Table of Contents|
The Voted Leeway and Board Leeway are state-supported programs in which school districts levy a property tax and the state guarantees a certain amount of revenue generated per Weighted Pupil Unit. As guarantee programs, state funding supplements school districts with lower property values. Only school districts that don't meet the minimum revenue per WPU receive an allocation of state funding.
Included in this section is a third property tax levied by school districts: the Board Leeway - Reading Improvement Program. This program is more of a matching program. School districts receive state funding for the K-3 Reading Improvement Program if they match the state allocation with property tax revenue (or some other local revenue source).
In FY 2008, local school districts generated nearly $262.9 million in local revenues to support the Voted and Board Leeway programs. The Legislature provided nearly $41.9 million in FY 2008 to fund the Voted and Board guarantee. Local revenues generated to support the programs increased to nearly $331.4 million in FY 2008. The state guarantee requirement decreased to over $28.5 million. The decrease in the total cost of the state guarantee is likely attributed to increased property tax revenues in many school districts.
Local school districts generated $15 million to support the K-3 Reading Improvement program. Similarly, the Legislature appropriated $15 million to support the program. Please see the K-3 Reading Improvement Program above for more information
The Voted Leeway Program has a long history, beginning with the 1954 program authorization by the Legislature. A Voted Leeway 'is a state-supported program in which a levy - approved by the school district electorate - is authorized to cover a portion of the costs of operation and maintenance of the state supported Minimum School Program in a school district' (USOE Finance and Statistics, School District Tax Levies Descriptions, March 2006).
Revenue generated through a district's Voted Leeway is free revenue and 'may be budgeted and expended under maintenance and operation as authorized by the local school board' (USOE Finance and Statistics, School District Tax Levies Descriptions, March 2006). In order to establish a Voted Leeway, each school district must place the issue for public vote. 'A majority of the electors of a school district voting at an election must vote in favor of the leeway' (USOE Finance and Statistics, School District Tax Levies Descriptions, March 2006).
Formula - A Voted Leeway 'allows a district to levy a tax rate (up to 0.002000, including the Board Leeway levy) to generate property tax and state aid revenue to supplement the district M&O' (USOE Finance and Statistics, School District Tax Levies Descriptions, March 2006). The state guarantee is calculated for each school district levying a Voted Leeway. The guarantee is 'based on a statutorily set dollar amount per 0.000100 of tax rate per Weighted Pupil Unit (WPU)' (USOE Finance and Statistics, School District Tax Levies Descriptions, March 2006).
House Bill 38, 'School District Voted Leeway Amendments,' passed by the 2001 Legislature provided for a state guarantee up to a combined tax rate between the Voted and the Board Leeway of .002000. It also indexed the amount of the guarantee to the value of the WPU. During the economic downturn of the early 2000s, the increased guarantee amount was postponed to reduce program costs.
For FY 2007 the Legislature increased the state contribution from a guarantee of $18.64 to $20.62 per weighted pupil unit. In FY 2008, the guarantee rate will increase to $23.07 per WPU. Statute provides that the state guarantee will increase by increments of .0005 until the guarantee is equal to .010544 times the value of the prior year weighted pupil unit.
The following statute governs the Voted Leeway Program.
Administrative Rule R277-422-3 was passed by the State Board of Education. The rule provides administrative procedures associated with the governance of the Voted Leeway Program.
The Board Leeway Program allows a local school board to levy a tax to 'maintain a school program above the cost of the basic program' (USOE Finance and Statistics, School District Tax Levies Descriptions, March 2006). Local school boards may levy a state-supported tax rate, up to 0.000400.
Statute limits the use of revenue generated by the Board Leeway Program. Local school boards must use generated revenue for class size reduction. However, if a local school board determines that district class sizes are not excessive, it may seek authorization to use program revenue to support other district functions. 'If a local school board determines that the average class size in the school district is not excessive, it may use the monies for other school purposes but only if the board has declared the use for other school purposes in a public meeting prior to levying the tax rate' (USOE Finance and Statistics, School District Tax Levies Descriptions, March 2006). Statute also requires schools district to certify to the State Board of Education that class size needs are being met and identify the other school purposes for which Board Leeway revenues will be used before they can use any generated revenue.
Formula - Similar to the Voted Leeway, the Board Leeway contains a state guarantee component. 'State aid is calculated for each district based on a statutorily set dollar amount per 0.000100 of tax rate per WPU' (USOE Finance and Statistics, School District Tax Levies Descriptions, March 2006).
Please refer to the Voted Leeway formula section for more information on the state guarantee rate.
The following statute governs the Board Leeway Program.
Administrative Rule R277-422-3 was passed by the State Board of Education. The rule provides administrative procedures associated with the governance of the Board Leeway Program.
The Reading Improvement Program discussed in Chapter 8 includes a local property tax component. 'Each local school board may levy a tax rate of up to 0.000121 per dollar of taxable value for funding the school district's K-3 Reading Improvement Program' (USOE Finance and Statistics, School District Tax Levies Descriptions, March 2006). The reading levy is in addition to the other tax levies imposed by the school district and does not require the approval of the district electorate. Generated revenue supports a school district's reading improvement plan generated under the provisions of the program - mainly to have students reading at grade level by the end of the third grade.
Statute requires that a local school board repeal the reading levy if the district's goals are not achieved. 'If after 36 months of program operation, a school district fails to meet goals stated in the district's plan for student reading proficiency as measured by gain scores, the school district shall terminate any levy' (USOE Finance and Statistics, School District Tax Levies Descriptions, March 2006). Following one year, the school district may revise its plan for reading achievement, obtain approval from the State Board of Education and reinstate the reading levy.
Please refer to the K-3 Reading Improvement Program in Chapter 8 for more information.