SCHOOL DISTRICTS - BUDGETS - PREPARATION, REVISION AND APPROVAL OF SECOND AND THIRD CLASS DISTRICTS. SCHOOL DISTRICTS - COUNTY REVIEWING COMMITTEE - AUTHORITY OF REVISION AND APPROVAL OF BUDGETS OF SECOND AND THIRD CLASS DISTRICTS.
(1) The county reviewing committee has the authority to refuse to approve or sign a school district budget if some items are too large, but it must prepare a revised budget.
(2) The reviewing committee has the authority to reduce specific items of the budget and to finally fix the total thereof even if revenues are available for those expenditures.
(3) The county reviewing committee cannot act arbitrarily in refusing to approve a school district budget on the ground that the school district did not budget 14 mills.
(4) The reviewing committee is required by statute to finally fix the budget of the district either by signing the budget submitted by the local board of directors or by revising the budget and signing it as revised.
(5) A school district may not operate under an unapproved budget.
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October 22, 1959
Honorable Lloyd J. Andrews
State Superintendent of Public Instruction
Old Capitol Building
Olympia, Washington Cite as: AGO 59-60 No. 78
By letter previously acknowledged, you requested an opinion of this office on several questions relating to the preparation, revision and approval of the budgets of second and third class school districts under chapter 216, Laws of 1959. We state your specific questions as follows:
"(1) Does the reviewing committee have the authority to refuse to approve or sign a school district budget because it believes some items are too large?
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"(2) Does the reviewing committee have the authority to reduce specific items of the budget even though there is revenue available for these expenditures?
"(3) Does the reviewing committee have the authority to refuse to approve a school district budget if the school district does not budget 14 mills for maintenance and operations?
"(4) What happens if the reviewing committee does not sign or approve the budget and the school district refuses to make any adjustments in the budget?
"(5) May the school district operate under an unapproved budget?"
We answer questions (1) and (2) in the affirmative, as qualified in the analysis, question (5) in the negative, and questions (3) and (4) in the manner set forth in our analysis.
During its 1959 session, our legislature passed chapter 216, Laws of 1959, a general act relating to education. Included therein we find various sections which deal with the preparation and approval of the school budgets of second and third class districts. Although sections 11 through 17 divide and amend the former law on this subject, section 1 chapter 28, Laws of 1933, the only significant change in the law, insofar as your inquiry is concerned, is in respect to the composition (and not the duties) of the county reviewing committee. With this in mind, we will proceed to discuss your questions in the order presented above.
Questions (1) and (2):
At the outset it should be noted that the duty of preparing a preliminary budget has been imposed upon the local board of directors of a school district. The budget must be prepared in detail and provide the information called for on the forms provided by the state superintendent of public instruction. (Section 12, chapter 216, Laws of 1959 [cf. RCW 28.63.100]). The budget, after it is approved by the board, following a public hearing, is then forwarded to the county superintendent. Section 14 of the new act (cf. RCW 28.63.120) reads as follows:
"The preliminary budget shall be forwarded to the county superintendent before August 1st of each year, for review and revision by a county reviewing committee. The committee shall consist of the county superintendent of schools, a member of the local board of directors and members of the county board of education. The reviewing committee shall finally fix and determine the total amount of the budget." (Emphasis supplied.)
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Section 16, (cf. RCW 28.63.140) provides, in pertinent part, as follows:
"The meetings of the reviewing committee shall be open to the public, and a copy of the original budget, and also a copy of the revised budget shall be available for examination by resident taxpayers who may attend the hearing. . . ." (Emphasis supplied.)
From a reading of the foregoing statutes it is obvious, that the legislature has expressly vested the county reviewing committee with the power to review and revise the budget submitted by the local board, and to "finally fix and determine the total" thereof.
The Supreme Court of this state has held that where a statute contains the grant of power or authority to achieve a lawful objective there is included in the grant by necessary implication, the power to do all other acts which are reasonably necessary to attain or accomplish such objective. State v. Melton, 41 Wn. (2d) 298 P. (2d) 892; See, also State ex rel. Hunter v. Superior Court, 34 Wn. (2d) 214, 208 P. (2d) 866; 50 Am.Jur. Statutes, Section 428.
By applying this rule, we conclude that the express power granted to the county reviewing committee in respect to school budgets includes, by necessary implication, the power to fix and determine the respective items used in arriving at a total or, to state it another way, the power to fix the total, implies the power to increase or decrease the separate items making up the total.
In AGO No. 3019, written to the Honorable John I. O'Phelan, Prosecuting Attorney, Pacific County, dated September 1, 1933, this office concluded:
"Since the act confers upon the reviewing committee the authority to fix and determine the amount of the budget, we think it necessarily follows that in so far as the form provided by the superintendent of public instruction is itemized, the reviewing committee would have the authority and it would be their dutyto fix and determine the items thereof in consonance with the 'amount' fixed and determined by it." (Emphasis supplied.)
Again, in an opinion written to the Honorable Stanley F. Atwood, Superintendent of Public Instruction, dated March 19, 1940, this office said:
". . . the budget is completed after the reviewing committee has acted upon it. So the reviewing committee is 'the final authority' in fixing the terms of the budget,the amount of revenues and the expenditures which are to be included in the budget. It has the last say." (Emphasis supplied.)
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See, also, letters written by this office to: (1) Mr. R. L. Wilkinson, Deputy Prosecuting Attorney, Whitman County, dated June 29, 1933; (2) Jessie Simmons, County Superintendent of Schools, Pacific County, dated August 16, 1933.
Accordingly, we answer your first two questions as follows: (1) The county reviewing committee has the authority to refuse to approve or sign a school district budget because it believes some items are too large. However, if the committee rejects the budget submitted by the district for any reason, it is under a statutory duty of preparing a revised budget. See, sections 14 and 16, chapter 216, Laws of 1959 (cf. RCW 28.63.140). A copy of the original budget or of the revised budget, as the case may be, must thereafter be filed in the office of the county superintendent, the office of the state superintendent and the county auditor on or before the last Friday in September. (2) The reviewing committee has the authority to reduce specific items of the budget in reviewing and revising the budget and in finally fixing the total thereof even though there may be sufficient revenues available to meet the proposed expenditures of the local board.
It is fundamental that the power granted by the legislature to local school boards to prepare preliminary budgets is a power which must be exercised by the boards in the best interests of the districts they represent and, therefore, the budgets must, of necessity, be based solely upon the anticipated expendituresrequired to be made by the district during the school year in question. Need will dictate the total amount of the budget, providing such need does not require a tax in an amount in excess of that fixed by the constitution or statutes of this state without a vote of the people.
Section 17, chapter 216, Laws of 1959 (cf. RCW 28.63.150) provides in pertinent part as follows:
". . . The board of county commissioners must levy a tax on all the taxable property in the district sufficient to raise the money to meet the necessary expenditures shown by such budget [the budget filed by the county superintendent after it has been fixed by the reviewing committee], after deducting the estimated revenues from state and county funds and other miscellaneous sources, together with such cash on hand as has not been voted or allocated for other purposes or is not needed to keep the district free from an interest bearing warrant basis." (Emphasis supplied.)
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In your third question you ask whether the reviewing committee can refuse to approve a budget if the district does not budget fourteen mills for maintenance and operation.
It is our opinion that if the reviewing committee in reviewing the budget of any school district determines that such millage is necessary to meet anticipated expenditures, it has the power to revise the budget, as hereinbefore discussed, and the county commissioners will thereafter be required to make such levy based on said budget. However, it should be noted, that although the committee has been granted wide latitude in respect to the fixing of the total amount of the budget, this power cannot be exercised in an arbitrary or capricious manner -the committee must act reasonably in an attempt to carry out the evident purpose for which it was created by the legislature. Hence, if a school district can operate within a budget not requiring fourteen mills, and the committee so finds, it cannot change the budget without being subject to a charge that its action is arbitrary and capricious and not authorized by law.
In this connection, it should be noted that RCW 28.58.120 provides as follows:
"At the time of preparing the annual budget for the ensuing year the board of directors of a school district may include therein a sum not exceeding one fifth of the taxable income of the district for any or all of the following purposes: (1) The establishment and support of a building fund, (2) the establishment and support of a fund for the purchase of transportation equipment, (3) the purchase of a schoolhouse site or sites for buildings or playgrounds, (4) the erection of one or more buildings authorized by law and providing the same with furniture, (5) the payment of the principal or interest on outstanding bonds or the refunding of outstanding indebtedness."
We restate your fourth question as follows: What happens if the reviewing committee does not sign or approve the budget and the school district refuses to make an adjustment in the budget?
From an examination of sections 14, and 17, chapter 216, Laws of 1959, hereinbefore set forth, it is our opinion that the reviewing committee is under a mandate from the legislature to finally fix the budget of the district, and thus, it must either sign the budget submitted by the local board of directors or revise the same and sign it as revised.
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In AGO No. 3019,supra, this office concluded:
"There is no provision in the act [Section 1, chapter 28, Laws of 1933] express or implied, which contemplates the return of the budget after it is fixed and determined by the reviewing committee to the school board for further action prior to its being passed to the county auditor for the board of county commissioners. Unless this interpretation be accepted, it would be difficult indeed to so construe the act as to give to the reviewing committee the authority to fix and determine the total amount."
In the letter written to Jessie Simmons, supra, the writer concluded:
"From the foregoing provisions of the statute it would seem clear thatit is the duty of the reviewing committee to prepare a revised budget and thereby 'finally fix and determine the amount thereof' (the budget), if it is dissatisfied with the budget which shall have been previously fixed and approved by the school directors." (Emphasis supplied.)
In order to answer your fifth question, we deem it necessary only to point out that a school district, like every other municipal corporation in this state, is not authorized to operate or expend public funds under an unapproved budget except to the extent and in the manner specifically authorized by law. Section 21, chapter 216, Laws of 1959 (cf. RCW 28.58.130) provides as follows:
"It shall be unlawful for any board of directors to contract indebtedness against its district in any one year in any sum in excess of the aggregate amount set forth and approved in its final budget. The members of any board of directors violating any provision of this section shall be personally liable for the full amount thus expended, or contracted for, and each director having a part in such unlawful expenditure shall immediately forfeit his office:Provided, That no board of directors shall be prohibited from making expenditures for the payment of regular employees and for the necessary repairs, and upkeep of the school plant during the interim while the budget is being settled." (Emphasis supplied.)
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We trust the foregoing information will be of assistance to you. In the event that you have any further questions on this matter, please feel free to contact this office.
Very truly yours,
JOHN J. O'CONNELL
ROBERT J. DORAN
Assistant Attorney General