SS/SB 852 - This act contains several provisions relating to the use of funds by public schools.

CAPITAL PROJECTS - The act would phase out the current requirement, in Section 164.011, RSMo, to place school tax levy increases first in the capital projects levy to the extent needed to satisfy capital needs. This provision was enacted in SB 676 from 1994, along with an allowance of a transfer of revenue (equal to twenty-four cents times the guaranteed tax base) from the incidental fund to the capital projects fund. The requirement will be reduced by allowing a fraction of the current transfer to be accounted for prior to assigning levy increase to the capital projects fund. The fraction of the transfer allowed shall be one-twelfth for 1996-97, one-sixth for 1997-98, one-half for 1998-99 and the full amount beginning in 1999-2000. Also, beginning in 1996-97, transfers for "grandfathered" lease purchases under section 165.011, RSMo, may also be accounted for prior to assigning levy increases to the capital projects levy. The capital projects levy does not generate state aid. This portion of the act is similar to SB 778 from 1996.

A school district may transfer the interest earned from the capital projects fund from the capital projects fund to the incidental fund, unless placement of this interest is otherwise provided for in law.

MINIMUM SALARY PAYMENTS FOR TEACHERS - The act would allow certain districts to continue to qualify for state minimum salary payments for teachers. The funding shall be sufficient to allow qualifying districts to comply with minimum salary requirements. Qualifying districts shall only receive funding for three years. To qualify, a district shall meet the criteria specified in the act.

SALARY EXPENDITURES FOR TEACHERS - The act removes the provisions enacted in SB 380 from 1993 and SB 676 from 1994 regarding expenditures on salaries for certificated, nonadministrative staff.

A school district shall expend as a percentage of current operating cost, for compensation and benefits of certificated staff, at least 78%, or, for the 1994-95 and 1995-96 school years, no less than three percentage points less than the base year salary percentage, or, for the 1996-97 school year, no less than two percentage points less than the base year salary percentage. The base year salary percentage shall be the two year average percentage of the 1991-92 and 1992-93 school years. This requirement shall not apply to hold harmless districts.

Beginning with the 1997-98 school year, a district shall comply with at least one of the following:

1) expend, as a percentage of current operating cost for compensation and benefits of certificated staff, a percentage that is no less than two percentage points less than the base year salary percentage;

2) expend at least 75% of current operating costs on teachers;

3) If the district made a one-time transfer in 1994-95 and spends at least 65% on teachers, it may comply by keeping an unrestricted fund balance in the combined incidental and teachers funds on June 30 which is equal to or less than the greater of: a) ten percent of the combined expenditures for the year from those funds, or b) the June 30, 1995 balance as a percentage of expenditures for 1994-95; or

4) If the district did not make a one-time transfer in 1994-95 and spends at least 65% on teachers, it may comply by keeping an unrestricted fund balance in the combined incidental and teachers funds on June 30 which is equal to or less than the greater of: a) ten percent of the combined expenditures for the year from those funds, or b) the June 30, 1993 balance as a percentage of expenditures for 1992-93.

The Department of Elementary and Secondary Education may exempt a school district from the requirements pertaining to compensation and fund balances upon receiving a request by a school district. School districts shall make waiver or exemption requests by school board action, provide public notice of the request and make a written copy of such action available to any employee upon request. Decisions of the Department on revisions and exemptions may be appealed to the State Board.

One year exemptions and permanent base year revisions shall be reviewed by the Department, and may be presented orally or submitted in writing. Written applications shall include an auditor's or CPA's report showing the revenues and expenditures for at most the 1988-1989 to 1992-1993 school years and, for base year revisions, shall show that the base year calculated under the act is not representative of that period of time or subsequent years. The district may request that the base year percentage be the lesser of the percentage for the 1991-92 school year or the 1992-93 school year.

A "hold harmless" school district may annually request, from the department, a one-year revision of the allowable fund balance criterion established under this section. The department shall review and approve any such request to the extent necessary for the district to avoid tax anticipation borrowing for the following school year.

Any school district which violates the requirements of the act regarding compensation and benefits or fund balances, shall compensate the school administrative staff and teachers during the year following the violation by one hundred and ten percent of the amount necessary to bring the district into compliance for the year of violation. The penalty payment may be spread over up to three years upon showing hardship; provided that the required penalty payment is at least two percent of total operating costs. Penalty payments may be made by a separate payment if the district is in compliance with the applicable fund balance check listed above. All penalty payments shall be made proportionally to all school administrative staff and teachers in the district.

Districts shall annually report the instructional budgetary efficiency ratio, as defined in the act, to the Department. The Department shall annually report the instructional budgetary efficiency ratio for each school district and the statewide average instructional budgetary efficiency ratio to the Governor and General Assembly.

SCHOLARSHIPS FOR EARLY HIGH SCHOOL GRADUATES - Any pupil less than eighteen years of age who graduates from a public high school in less than four years shall be eligible for a scholarship to attend academic classes at an approved public or private higher education institution. Such attendance shall be included in the average daily attendance of the district the pupil resided in at graduation during such succeeding school year to determine state aid.

The Department shall deduct from its state aid payment to the district eighty percent of the per pupil amount for the pupil's attendance and such amount shall be deposited in the "Missouri Higher Education Student Voucher Fund", which is created by the act. One-half of the remaining funds paid to the district based on the attendance of the pupil shall be used for bonus compensation and benefits to certificated staff based upon merit, and the remaining one-half may be used for any school purpose.

A pupil shall receive from the Department, upon request, a scholarship of eighty percent of the amount deducted by the Department from the district for such pupil except that the scholarship shall not exceed the tuition, and other fees charged by the institution attended for such classes. The school attended by a pupil shall provide documentation to the Department as specified in the act.

SCHOOL ADMINISTRATORS - No school administrator may serve more than three consecutive years in a school district unless the person teaches at least one regular term class within the last three years.
OTTO FAJEN