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AGO 1977 No. 17 - August 02, 1977
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Slade Gorton | 1969-1980 | Attorney General of Washington

DISTRICTS ‑- SCHOOLS ‑- TAXATION ‑- EXCESS LEVIES ‑- SALARY INCREASES FOR SCHOOL DISTRICT EMPLOYEES

(1) The restrictions upon the use of excess property tax levy revenues for salary increase purposes imposed by § 4(3) of chapter 325, Laws of 1977, 1st Ex. Sess.  (the "levy lid act") also apply to revenues from levies authorized prior to the effective date of the act which either (a) have not yet been collected or (b) have been collected but were not yet disbursed or obligated for salary increase purposes, as of the effective date of the act.

(2) School districts may use other funds appropriated by §§ 96 through 109 of Chapter 339, Laws of 1977, 1st Ex. Sess. (the 1977-79 biennial appropriations act), or any non-state appropriated funds (such as receipts from the one percent tax on real estate transactions) which are legally available for the payment of salaries, to increase salaries of certificated or classified employees beyond the increases specifically funded by subsection (1) of § 96 of Chapter 339, supra.

                                                              - - - - - - - - - - - - -

                                                                 August 2, 1977

Honorable Frank B. Brouillet
Superintendent of Public Instruction
Old Capitol Building
Olympia, Washington 98504

                                                                                                                 Cite as:  AGO 1977 No. 17

Dear Sir:

            By letter previously acknowledged you have requested our opinion on the following questions relative to salary increases for school employees under certain laws passed by the 1977 legislature.

            (1) Do the restrictions upon the use of excess property tax levy revenues for salary increase purposes imposed by  [[Orig. Op. Page 2]] § 4(3) of Chapter 325, Laws of 1977, 1st Ex. Sess. (the "levy lid act"), apply to revenues from levies authorized prior to the effective date of the act which have either (a) not yet been collected or (b) been collected but not disbursed or obligated for salary increase purposes, as of the effective date of the act?

            (2) May school districts use other funds appropriated by §§ 96 through 109 of Chapter 339, Laws of 1977, 1st Ex. Sess. (the 1977-79 biennial appropriations act), or any non-state appropriated funds (such as receipts from the one percent tax on real estate transactions) which are legally available for the payment of salaries, to increase salaries of certificated or classified employees beyond the increases specifically funded by subsection (1) of § 96 of Chapter 339, supra?

            We answer both questions in the affirmative for the reasons set forth in our analysis.

                                                                     ANALYSIS

            Question (1):

            Your first question involves Chapter 325, Laws of 1977, 1st Ex. Sess., sometimes referred to as the "levy lid" bill.  Simply put, this new law revised the statutory scheme under which school districts may submit excess property tax levy propositions1/ to their voters.  To begin with, § 1 of the act amended RCW 84.52.052, which previously constituted the authority for school districts and other taxing districts to impose such excess levies, by deleting school districts from the list of taxing districts enumerated therein.  Then secondly, by §§ 2 through 4 of chapter 325, supra, the legislature replaced the foregoing with a new, special, authorization for the submission of excess levy propositions by school districts which included limitations upon the use of such tax levies for school district employee "compensation" increase purposes.  The provision of this act which gives rise to your first question is contained in § 4(3) of Chapter 325,supra, and reads as follows:

             [[Orig. Op. Page 3]]

            "Excess levies authorized under this 1977 amendatory act orunderRCW 84.52.052 shall not be used to increase the average compensation for certificated or classified personnel in any school district:  PROVIDED, That those school districts which receive state funds budgeted for a four percent increase in average compensation for certificated or classified personnel respectively shall be allowed to increase such certificated or classified compensation by an amount equal to the percentage increase in the prior year's United States Consumer Price Index minus the state funded four percent, or by an additional two percent, whichever is less:  PROVIDED FURTHER, That any school district whose average compensation for certificated or classified personnel respectively is below statewide average compensation level for certificated or classified personnel during the preceding school year, may collect and expend property taxes authorized by this 1977 amendatory act, or under RCW 84.52.052, for the purpose of increasing such district average compensation for certificated or classified personnel up to but not to exceed the statewide average compensation for certificated or classified personnel for the preceding school year:  PROVIDED FURTHER, That those contracts which have been negotiated prior to the effective date of this 1977 amendatory act by those school districts for such school year shall not be abrogated by this 1977 amendatory act."  (Emphasis supplied)

            In direct answer to your question it is our opinion, based upon the above underscored portion of § 4(3), that the limitation thus imposed upon the use of excess levy revenueis applicable to revenues from levies authorized prior to the enactment of the levy lid law which have yet to be collected or which, although collected prior to the effective date2/ of Chapter 325,supra, were not yet obligated pursuant to a binding contract for compensation increase purposes.

             [[Orig. Op. Page 4]]

            Normally, a new statute does not apply in a retroactive sense unless, of course, the provisions of the statute express a legislative intent that it so apply.  In the instant case, however, the legislature made express reference to the preexisting authority of school districts to impose excess property tax levies, RCW 84.52.052, and thus manifested an intent to include those previously authorized revenues within the limitations imposed by § 4(3) of the act, supra.  Any other interpretation would render the underscored portion meaningless and that, obviously, would be contrary to well-established rules of statutory construction.  See,e.g.,State v. Lundquist, 60 Wn.2d 397, 374 P.2d 246 (1962).  Accordingly, except to the extent that the revenues contemplated by your question had already been contractually committed3/ for salary increases prior to the effective date of the law they must be deemed now subject to the restrictions contained therein;i.e., in § 4(3)supra.  We thus answer your first question in the affirmative.4/

             Question (2):

            Your second question involves the biennial (1977-79) appropriations act, Chapter 339, Laws of 1977, 1st Ex. Sess.  Section 96 of that act appropriates $670,100,000 to the state superintendent of public instruction for general apportionment purposes during the 1978 fiscal year with the following express provision, in subsection (1), for school district employee compensation increases:

             [[Orig. Op. Page 5]]

            "The appropriation contained in this section shall be subject to the following conditions and limitations:

            "(1) Of the appropriation contained in this section the superintendent is hereby authorized to distribute up to $33,000,000 for compensation including benefit increases for certificated and classified staff in the common schools starting September 1, 1977.  For the purpose of distributing these funds, the superintendent of public instruction shall determine the state maximum school district average compensation level including benefits for certificated staff for the 1976-77 school year and the state maximum school district average compensation level including benefits for classified staff for the 1976-77 school year.

            "Such state maximum compensation levels including benefits increased by four percent shall be the 'maximum control levels' for certificated and classified staff for the purposes of this section.

            "For the purpose of distributing these funds for the 1977-78 school year, each school district shall receive average compensation level including benefit increases for certificated and classified staff respectively as follows:

            "(a) Those school districts whose district average compensation level including benefits is above the state average compensation level including benefits for 1976-77, shall receive a six percent increase above the 1976-77 average compensation level including benefits:  PROVIDED, That no district shall receive an increase which would raise average compensation levels including benefits above the 'maximum control level' so defined.

            "(b) Those school districts whose district average compensation level including benefits is below the state average compensation level including benefits for 1976-77, shall receive a nine percent increase above the  [[Orig. Op. Page 6]] 1976-77 average compensation levels up to an amount not to exceed six percent above the state average compensation level including benefits for 1976-77."

            Clearly, the $33,000,000 item which has thus been earmarked by subsection (1) of § 96,supra, for compensation increases may only be used for that purpose.  And by the same token, the pay increases which may be funded with that money must be deemed to be limited to the percentage increases specified in the appropriation.  However, with the exception of the earmarked money the vast bulk of the rest of the $670,100,000 appropriation made by § 96 of Chapter 339, supra, is to be distributed to school districts in the form of "apportionment" pursuant to RCW 28A.41.130 which establishes a formula for the distribution of funds made available by the legislature for the current use, including salaries, of the common schools.5/   Your question, in essense, is whether a school district may use such other nonearmarked appropriated moneys, or any nonappropriated local funds which are legally available for the payment of salaries, ". . . to increase the salaries of certificated or classified employees beyond the increases specifically funded by § 96 of Chapter 339, supra."  A review of two recent opinions regarding similar appropriation and salary increase issues will be helpful in addressing that question.

            In AGLO 1975 No. 68 [[to John C. Mundt, Director, State Board of Community College Education, on August 7, 1975, and Informal Opinion, AIR-75568]](copy enclosed) we also were faced with the issue of whether or not the earmarking of a specified portion of a larger appropriation for certain employee salary increases precluded the use of other appropriated and nonappropriated funds for additional increases.  The appropriation involved was contained in § 11 of Chapter 269, Laws of 1975, 1st Ex. Sess., which made a special appropriation of $159,691,470 to the governor for state employee salary increase purposes and, in subsection (8), provided that:

             [[Orig. Op. Page 7]]

            "Not more than $117,016,320 in general fund moneys (including $12,962,742 in federal funds) shall be expended for continuation during the 1975-77 biennium of the salary increases which were granted effective March 1, 1975 . . ."  (Emphasis supplied)

            Notably, the above quoted provision was prefaced with the restrictive language "Not more than."  Accordingly, we concluded that the legislature had prohibited the use of other funds appropriated by § 11 of Chapter 269, supra, for additional salary increases.  At the same time, however, we further advised that this would not preclude the use of other legally available funds appropriated by Chapter 269, supra, or of local non-appropriated funds for such additional increases, saying:

            "As will thus be seen, the item in question is a subsection of a special appropriation to the governor in the amount of $159,691,470.  This specific subsection allocates $117,016,320 from the larger appropriation to be used solely for the continuation of the salary increases previously granted by the legislature by § 2, chapter 9, Laws of 1975, to the several listed categories of state employees.

            "The restrictive language 'not more than,' however, as it appears in subsection (8), is not a limitation on the entire amount of general fund moneys appropriated by chapter 269,supra, but rather it is simply a limitation on the amount of money from the underlying $159,691,470 appropriation made by § 11, proper, which can be used for continuation of the earlier granted salary increases.  Thus, in essence, this subsection merely means that not more than $117,016,320 in general fund moneys from the larger appropriation to the governor may be expended for continuation during the 1975-77 biennium of the salary increases which were granted effective March 1, 1975.

            ". . .

            ". . .  However, nothing contained in that appropriation provision, or in § 11(8),supra, or any  [[Orig. Op. Page 8]] other legislative enactment of which we are aware purports to bar a community college from doing either of the following two things:

            "(1) Using other appropriated funds or nonappropriated local funds which are legally available for the payment of salaries to fund a full continuation of the above described earlier granted salary increases if the funds allocated to the college from the appropriation made by § 11(8) of chapter 269, are insufficient; or

            "(2) Using either such local funds or any appropriated funds which are legally available for the payment of salaries to provide additional pay increases for its faculty and exempt staff employees in accordance with RCW 28B.50.140(3),supra ‑ over and above the salary increases which were previously granted to those employees in response to § 2, chapter 9,supra.6/

             The other prior opinion to be noted is AGLO 1976 No. 39 [[to John C. Mundt, Director, State Board of Community College Education, on June 15, 1976, an Informal Opinion, AIR-76539]], a copy of which is also enclosed.  Subsequent to the issuance of of AGLO 1975 No. 68, supra, the legislature made another appropriation to fund an average 5% salary increase for higher education employees.  See, § 6 of Chapter 133, Laws of 1975-76, 2nd Ex. Sess., which made a total appropriation to the governor of $34,796,310 for salary increases and then, in subsection (3), earmarked $9,777,624 for higher education employee salary increases, as follows:

            "Not more than $9,777,624 of general fund moneys shall be expended to provide effective July 1, 1976, an average 5% salary increase for faculty and exempt employees of the four year units of higher education and the community college system: . . ."

             [[Orig. Op. Page 9]]

            This time, however, the legislature went on to add the following proviso:

            ". . .  PROVIDED, Thatno community college district or four year unit of higher education may grant from any fund source any additional salary increase greater than that authorized in this 1976 amendatory act."  (Emphasis supplied)

            Thus, as you will see, this later appropriation not only used the restrictive language "not more than" which we addressed in AGLO 1975 No. 68,supra, but it also contained a proviso expressly prohibiting the use of "any fund source [for] any additional salary increase."  In AGLO 1976 No. 39 we therefore concluded that the legislature had not only precluded any use of the unearmarked portion of the subject appropriation for additional community college employee salary increases but that it had also barred the use of any other funds for that purpose as well, saying:

            "It is quite clear that funds appropriated by § 6(3), chapter 133,supra, cannot be used to pay the cost of any salary increases above or beyond the average 5% salary increase for which they have been appropriated.  Accord, Wash. Const., Article VIII, § 4, supra.  Therefore, any additional salary increase, if implemented, would have to be funded from some other source.  Yet unlike the situation which existed under the 1975 salary increase appropriation in chapter 269,supra, the legislature has here specifically declared that except as authorized by § 6(3), '. . . no community college district or four year unit of higher education may grant from any fund source any additional salary increase . . .'

            "Except as rendered constitutionally unenforceable in a given case under Article I, § 23 of the constitution, supra (previously discussed at p. 6), it appears to us that this limiting proviso means precisely what it says. . . ."

             [[Orig. Op. Page 10]]

            Bearing the foregoing historical pattern in mind let us turn, next, for comparative purposes to another portion of Chapter 339, supra, the very act with which we are concerned in the present opinion.  Subsection 14 of that 1977-79 appropriation act begins by appropriating the sum of $228,390,000 to the governor for certain designated purposes ‑ including salary increases for community college employees and commissioned members of the state patrol.  With regard to the latter, however, subsections (8) and (9) of § 14 read as follows:

            "(8)Not more than $18,134,000 of these general fund moneys shall be expended to effect salary increases including increments or their equivalents for faculty and exempt employees of the community college system.  Not more than $14,223,000 of this amount shall be expended to effect, beginning July 1, 1977, an average 10% salary increase including increments or their equivalents for faculty and exempt employees of each community college district:  PROVIDED, Thatno district may grant from any fund source any additional salary increase greater that that provided in this act. . ."  (Emphasis supplied) (§ 14(8))

            ". . .

            "(9)Not more than $208,000 of general fund moneys (including $39,000 in federal funds) shall be expended to effect salary increases for commissioned members of the Washington State Patrol.  Not more than $163,000 of this amount (including $31,000 in federal funds) shall be expended to effect, beginning July 1, 1977, an average 10% salary increase, for commissioned members of the Washington State Patrol.  Not more than $45,000 of this amount (including $8,000 in federal funds) shall be expended to effect, beginning July 1, 1978, an average 5% salary increase, for commissioned members of the Washington State Patrol:  PROVIDED, Thatno additional salary increases may be granted from any fund source greater than those authorized by this act: . . ."  (Emphasis supplied)  (§ 14(9))

             [[Orig. Op. Page 11]]

            Thus, once again, the legislature has shown that when it wishes to limit public employee salary increases in excess of those fundable by a given appropriation it knows how to say so.  But in marked contrast to the above‑quoted salary increase provisions of § 14, that portion of § 96 of Chapter 339, supra, which earmarks $33,000,000 for school district employee compensation increases contains no similar limitation upon the use either of other appropriated funds or of monies from any other fund source for additional increases.

            A final point to be noted is that the legislature, in an earlier revision of its 1977-79 budget bill, did in fact propose at least to "discourage" school districts from granting pay increases in excess of those which could be funded from a special appropriation for that purpose.  We have reference to section 75 of Senate Bill No. 3109 which (1) earmarked funds for a 5 1/2 percent pay increase during the 1977-78 school year, (2) directed the superintendent of public instruction to adopt rules insuring that no increases in excess of 5 1/2 percent were granted, and (3) provided for a corresponding reduction in the receipt of state funds if the limitation was exceeded by a district, as follows:

            "General Fund Appropriation for General Apportionment:

           . . .  PROVIDED FURTHER, That the Superintendent of Public Instruction shall adopt rules to insure that no district shall grant a pay increase exclusive of increments for 1978-79 school year in excess of 5 1/2 percent of the district's actual average pay for certificated or classified employees for the 1977-78 school year $1,433,084,495

            "General Fund Appropriation:

            For a pay increase up to 5 1/2 percent exclusive of increments for school district certificated and classified employees for the 1977-78 school year:  PROVIDED, That the school district average pay increase exclusive of increments shall not exceed 5 1/2 percent of the 1976-77 school year actual average pay for either certificated or classified employees:  PROVIDED FURTHER, That if  [[Orig. Op. Page 12]] a district provides a pay increase exclusive of increments that exceeds the 5 1/2 percent limitation for certificated or classified employees, then an amount equal to the excess of that additional increase shall be withheld from the amount otherwise available from this appropriation $48,621,629"

            It thus seems apparent to us in light of all of the foregoing facts that the legislature intentionally chose not to limit school district compensation increases to the level funded by the $33,000,000 earmarked in § 96 of Chapter 339.  Accordingly, we also answer question (2) above, in the affirmative; i.e., a school district may use other funds appropriated by §§ 96 through 109 of Chapter 339, Laws of 1977, 1st Ex. Sess., or any nonstate appropriated funds (such as receipts from the one percent tax on real estate transactions) which are legally available7/ for the payment of salaries, to increase salaries of certificated or classified employees beyond the increases specifically funded by subsection (1) of § 96 of Chapter 339, supra.

            We trust that the foregoing will be of some assistance to you.

Very truly yours,

SLADE GORTON
Attorney General


ROBERT E. PATTERSON
Assistant Attorney General

                                                         ***   FOOTNOTES   ***

1/See Wash. Const., Article VII, § 2, as amended.

2/July 1, 1977 in accordance with § 6 of the act.

3/See Wash. Const., Article I, § 23 which provides that:

            "No bill of attainder, ex post facto law, or law impairing the obligations of contracts shall ever be passed."

4/Although it has been suggested to us that a distinction might be drawn between 1977 levies (for 1978 collection) approved by the voters before the effective date of the act, on the one hand, and levies imposed in prior years (specifically, 1976) for 1977 collection, on the other, we are unable to discern any legitimate basis for reading such a qualification into the all inclusive language of Sec. 4(3), supra, insofar as it refers to levies authorized ". . . under RCW 84.52.052 . . ."

5/The formula is designed to guarantee each school district a given annual sum of money per weighted pupil enrolled.  The sum so guaranteed consists of a combination of funds from the subject $670,100,000 appropriation and local nonappropriated funds received by a school district such as the real estate excise tax funds mentioned in your question.

6/Accord, AGO 61-62, No. 34 [[to Louis Bruno, State Superintendent of Public Instruction, on June 5, 1961]], copy enclosed, at p. 7 in which this office earlier said much the same thing in connection with a 1961 appropriation for teachers' salaries.

7/Except to the extent permitted by the several provisos to § 4(3) of Chapter 325, supra, (the "levy lid" bill), this would, of course, necessarily exclude revenues derived from excess levies which, under that law, are otherwise no longer "legally available" for salary increases.

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