AGO 1981 No. 5 - Apr 20 1981
DISTRICTS ‑- SCHOOLS ‑- TEACHERS ‑- INITIATIVE NO. 62 ‑- FUNDING COSTS OF SICK LEAVE CASH OUT ‑- ENFORCEMENT OF INITIATIVE NO. 62
(1) School districts are not entitled to be reimbursed by the state under the provisions of Initiative No. 62, § 6 (1) for the additional costs resulting from the sick leave cash out provided for by RCW 28A.58.097.
(2) The added costs resulting from the aforesaid sick leave cash out program are subject to the "full funding" requirement for basic education (K-12) imposed by Washington Const., Article IX, § 1; however, this does not necessarily mean that the total amount paid by a school district to its eligible employees pursuant to RCW 28A.58.097 will have to be covered by the amount which the legislature is constitutionally required to appropriate for basic education.
(3) Because Initiative No. 62 is not a constitutional amendment, it does not have the effect of voiding legislation imposing additional costs on local taxing districts without compliance with § 6(1) thereof; rather, the legal effect of enacting such legislation would be the incurrence of a potential state liability for reimbursement to the extent, and in the manner, thus required.
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April 20, 1981
Honorable Ellen Craswell
St. Sen., 23rd District
8066 Chico Way N.W.
Bremerton, WA 98310
Cite as: AGO 1981 No. 5
Dear Senator Craswell:
By letter previously acknowledged, you requested our opinion on the following three questions:
"1) Are school districts entitled to be reimbursed by the state under the provisions of Initiative 62, Section 6 (1) for the additional costs resulting from RCW 28A.58.097? [[Orig. Op. Page 2]]
"2) Are the added costs resulting from RCW 28A.58.097 subject to the 'full funding' requirement for basic education (K-12) imposed by Washington Constitution, Article IX, Section 1?
"3) What would be the legal effect of enacting legislation which imposes additional costs on a taxing district and which does not provide for reimbursement by the state for the added costs, if the legislation is subject to the requirements of Initiative 62, Section 6(1)?"
We answer question (1) in the negative and respond to questions (2) and (3) as set forth in our analysis.
Section 6(1) of Initiative 62, as approved by the voters at the 1979 state general election,1/ provides that:
"The legislature shall not impose responsibility for new programs or increased levels of service under existing programs on any taxing district unless the districts are reimbursed for the costs thereof by the state."
Your first question is whether this provision is applicable to such costs as are incurred by a school district in compensating its employees for unused sick leave under § 5, chapter 182, Laws of 1980, since codified as RCW 28A.58.097. That law, which became effective on June 12, 1980, reads, in material part, as follows:
[[Orig. Op. Page 3]]
"A new attendance incentive program for all certificated and noncertificated employees of a school district is hereby created, and every school district board of directors shall establish and maintain such a program in the following manner. In January of the year following any year in which a minimum of sixty days of leave for illness or injury is accrued, and each January thereafter, any eligible employee may exercise an option to receive remuneration for unused leave for illness or injury accumulated in the previous year at a rate equal to one day's monetary compensation of the employee for each four full days of accrued leave for illness or injury in excess of sixty days. Leave for illness or injury for which compensation has been received shall be deducted from accrued leave for illness or injury at the rate of four days for every one day's monetary compensation: PROVIDED, That no employee may receive compensation under this section for any portion of leave for illness or injury accumulated at a rate in excess of one day per month.
"At the time of separation from school district employment due to retirement or death an eligible employee or the employee's estate shall receive remuneration at a rate equal to one day's current monetary compensation of the employee for each four full days accrued leave for illness or injury: PROVIDED, That an employee shall be entitled to all the benefits conferred by this section as of June 12, 1980, but the district may, in its discretion, delay payments due upon retirement or death, with interest at the rate of eight percent per year, to an eligible employee or the employee's estate until September 1, 1981.
". . ."
[[Orig. Op. Page 4]]
For reasons earlier explained in AGO 1980 No. 24, copy enclosed, it is our opinion that § 6(1) of Initiative 62, supra,
". . . was not intended to require the state to reimburse local governments forany and all costs which might be incurred as a result of legislative action . . ."
Rather, we there explained that,
". . . section 6(1) only requires reimbursement for those costs incurred because of a legislatively-imposed responsibility '. . . for new programs or increased levels of service under existing programs . . .'"
We also noted, in that opinion, the manner in which this portion of the initiative was presented and explained to the people in the 1979 Official Voters' Pamphlet and, on that basis, we further qualified our view of its true scope by saying (at page 6):
"These statements clearly show that this aspect of the initiative was intended to encompass only such state legislation as requires units of local government to actually increase the level of services rendered to the general public‑-whether the services are 'new' ones in the sense that the service has not been offered to the public before or, instead, are services like, but in addition to, those already offered to the public (i.e., 'increased levels of service under existing programs')."
In addition, we said that,
". . . any such new or increased services to the public must be measurable or quantifiable in some sense‑-for we cannot attribute to the voters an intent to require state reimbursement for services which result in public benefits of only a remote, ephemeral or subjective [[Orig. Op. Page 5]] nature. Indeed, we note again that section 6(4) of the initiative requires the legislature, in consultation with the Office of Financial Management, to determine the costs of new programs or increased levels of service under existing programs. Therefore, in order to make both section 6(1) and section 6(4) purposeful and effective, the public benefits must be measurable or quantifiable in some manner."
In summary, what we thus concluded was that this provision of the initiative, read in context and in the light of its history, truly requires the state to reimburse local taxing districts for costs incurred as the result of state legislation only,
". . . where, and to the extent that, mandatory state legislation results in either new services to the general public or an actual increase in local governmental servicesoffered to the public in some measurable, quantifiable sense." (Emphasis supplied)
In AGO 1980 No. 24,supra, we were specifically concerned with, and applied the foregoing reasoning to, the funding of proposed pension increases for school district and other municipal employees‑-a form of compensation, as you know, underBakenhus v. Seattle, 48 Wn.2d 695, 296 P.2d 536 (1956). A mere increase in compensation payable to existing employees, as distinguished from a mandatory addition of new personnel,2/ would not (we reasoned) involve a quantifiable increase in service to the public. And therefore, the resulting costs, if any, to the school or other taxing districts affected by the legislation would not be reimbursable.
[[Orig. Op. Page 6]]
By the same token, in the instant case, we are likewise dealing with a form of compensation for school district employees. For clearly, the sick leave "cash out" program provided for in RCW 28A.58.097,supra, must also be viewed as a form of compensation. Otherwise, like pensions, the payments involved would be an unconstitutional gift of public funds in violation of Article VIII, § 7 of our state constitution.3/ And therefore, on that basis, we similarly answer your first question (as above stated) in the negative. School districts are likewise not entitled to be reimbursed by the state under the provisions of Initiative 62, § 6(1), for the additional costs, if any, resulting from the attendance incentive program provided for in RCW 28A.58.097.
Notably, in thus concluding, we have not overlooked the following reported colloquy between Representatives Heck and Chandler when the sick leave reimbursement bill (Substitute House Bill No. 3537) was before the House of Representatives on March 12, 1980‑-as set forth in the Journal of the House, 1980, at page 750:
"Mr. Chandler yielded to question by Mr. Heck.
"Mr. Heck: 'Representative Chandler, is it your understanding that the school districts' attendance incentive program created by this act falls under the provisions of Initiative 62?'
"Mr. Chandler: 'Yes, the bill specifically states the new program would be established in local school districts to establish and maintain an attendance incentive program. For school districts or taxing districts under sections 1 and 6 of Initiative 62, the Legislature may not impose responsibility for new programs on taxing districts unless those districts are reimbursed for the cost of the program.' [[Orig. Op. Page 7]]
"Mr. Heck: 'Since there is no appropriation accompanying this amendment, and that's now the proposed bill, does it violate the funding requirements of Initiative 62?'
"Mr. Chandler: 'No, the bill permits school districts to defer payment of sick leave cashout when employees retire (that's also true of community colleges) and the deferment may be until September 1, 1981, after the beginning of the next budget biennium; therefore, school districts may defer retirement payments until the Legislature reimburses districts for their costs under this new program in the next year's budget.'
"Mr. Heck spoke in favor of passage of the bill."
We can certainly understand the reason for Representative Chandler's conclusion. As his remarks quite correctly suggest, the provision then under consideration referred to a "new attendance incentive program"‑-and § 6(1) of Initiative 62,supra, speaks, in turn, of state reimbursement for "new programs" imposed on taxing districts by the legislature. But nevertheless, for the reasons above stated, we do not believe that a court would agree with the conclusion thus stated in this colloquy.
Furthermore, while such reported colloquy is often useful‑-and indeed sometimes decisive‑-in determining legislative intent as to the meaning of uncertain or unambiguous language in a given legislative enactment, the particular remarks here involved present an essentially different situation. What we actually have in this instance is an expression of an individual legislator's understanding of the meaning of language contained in an initiative earlier adopted by the voters‑-as distinguished from something in Substitute Senate Bill No. 3537 itself. And thus it istheir intent, at the time of adoption, which is truly determinative. Accordingly, a legislator's subsequent expression of his understanding would be given little, if any, weight by a court in establishing that intent.
[[Orig. Op. Page 8]]
Your second question also relates to the costs (if any) incurred by a school district in paying for unused sick leave under RCW 28A.58.097,supra. This question asks whether those costs are,
". . . subject to the 'full funding' requirement for basic education (K-12) imposed by Washington Constitution, Article IX, Section 1?"
In AGO 1980 No. 24,supra, we likewise passed, briefly, on this issue from the standpoint of legislation aimed at requiring school districts to make employers' contributions to the Washington Teachers' Retirement System (TRS). Noting the landmark decision of the Washington Court in Seattle School Dist. v. State, 90 Wn.2d 476, 585 P.2d 71 (1978), we said, at page 9:
"Under that case the state legislature is constitutionally required to 'fully fund' the costs of 'basic education'‑-and one of those 'costs' is the employer's contribution to TRS. Thus, if the legislature were to require local school districts to pay a part of the 'employers' contribution' to TRS, it would then have to effectively fund that contribution by correspondingly increasing the appropriation to local school districts to cover that additional cost.
. . ."
The underlying basis for this conclusion was that any element of compensation required by state law to be paid to such school district employeesas are necessary for the provision of "basic education"‑-as defined by the legislature‑-must be deemed to represent a part of the cost of such basic education. And, once again (as with your first question, above), the analogy is here apt. Therefore, our reasining [reasoning] in AGO 1980 No. 24, supra, is at least theoretically supportive of an affirmative answer to the instant question.
[[Orig. Op. Page 9]]
Having so concluded, however, we do not mean to suggest that the total amount paid by a school district to its eligible employees pursuant to RCW 28A.58.097,supra, will necessarily have to be covered by the amount which the legislature is constitutionally required to appropriate for basic education. Nor, for that matter, do we mean to suggest that there must even be a specific "line item" for any of the costs attributable to RCW 28A.58.097. The reason for this statement stems from the nature of the state's constitutional obligation and the method by which the legislature has chosen to meet that obligation. Under theSeattle case, supra, the "basic education" which the state is constitutionally required to fund is to be defined by the legislature‑-at least in the first instance. And by reason of its control over that definition, the legislature can control the constitutionally-required funding level. In turn, the legislature presently defines "basic education" through the very formula by which it funds such education. That formula is commonly referred to as the "basic education allocation formula." See RCW 28A.41.140, which establishes the components of the formula such as staffing ratios and salary levels; and see also, § 100, chapter 270, Laws of 1979, 1st Ex. Sess., which establishes the specific staffing ratios and salary levels to be used in the formula for fiscal years 1980 and 1981.
The formula, however, does not, of itself, determine how the money received by an individual district is to be used by that district. A measure of local control is thus preserved for the district. As stated in RCW 28A.41.140:
". . . the distribution formula developed pursuant to this section shall be for state apportionment and equalization purposes only and shall not be construed as mandating specific operational functions of local school districts other than those program requirements identified in RCW 28A.58.754.
. . ."
Therefore, as a practical matter, when a statute such as the one here under consideration, RCW 28A.58.097, results in a cost to a school district, the legislature has a choice as to how it handles that cost. It may make a special "line [[Orig. Op. Page 10]] item" appropriation to cover that cost, outside the formula. See,e.g., § 100(4), chapter 270, Laws of 1979, 1st Ex. Sess., which contains a number of such items. Or, on the other hand, it may simply require the districts to pay for those costs from moneys received under the formula‑-even though this would result in the actual salary levels or actual staff-student ratios, or both, being less than those provided in the formula. But either method, in our view, is constitutionally permissible.4/
Your final question, repeated for ease of reference, asks:
"What would be the legal effect of enacting legislation which imposes additional costs on a taxing district and which does not provide for reimbursement by the state for the added costs, if the legislation is subject to the requirements of Initiative 62, Section 6(1)?" [[Orig. Op. Page 11]]
Clearly, if Initiative 62 was a part of our state constitution‑-added thereto through the amendatory process therein prescribed‑-the answer to this question would be that any such legislation would be unconstitutional and, hence, void. For the constitution is a limitation on the power of the legislature and any legislation which violates it is thus a nullity. See,e.g.,Clark v. Dwyer, 56 Wn.2d 425, 353 P.2d 941 (1960).
But, of course, the initiative was not adopted by the people as a constitutional amendment and, under the provisions of the constitution which relate to the initiative and referendum, it could not have been so adopted. For, as we explained in our opinion of February 20, 1970, to the Secretary of State (copy enclosed), the people of this state5/ do not have the power to propose amendments to the state constitution through the initiative process. Accordingly, just as in the case of any other initiative measure, the provisions of Initiative 62‑-including § 6(1), supra‑-are not of such stature as to preclude the legislature from, in effect, violating them.
This is not to say, however, that the legislature may do so with impunity. Clearly, even though it is not a part of the constitution, the reimbursement requirement of § 6(1),supra, is still a "law." And, as such, it may be said to establish the underlying legal basis for a claim on the part of any affected taxing district for reimbursement by the state whenever any legislation coming within its purview is enacted. Therefore, in direct answer to your third question, we believe that the legal effect of enacting such legislation as you have described would be the incurrence of a potential state liability for reimbursement to the extent, and in the manner, thus required.
[[Orig. Op. Page 12]]
This completes our consideration of your questions. We trust that the foregoing will be of assistance to you.
Very truly yours,
KENNETH O. EIKENBERRY
PHILIP H. AUSTIN
Deputy Attorney General
TIMOTHY R. MALONE
Assistant Attorney General
*** FOOTNOTES ***
1/Accord, Wash. Const., Art. II, § 1 (Amendment 7).
2/Such as the establishment of additional superior court judgeships with which we were concerned in AGO 1980 No. 3, a copy of which is also enclosed herewith.
3/Accord, AGO 63-64 No. 97, copy enclosed, in which we first dealt with the constitutionality of such a sick leave "cash out" program for municipal employees.
4/Indeed, the legislature has in effect so stated in RCW 28A.41.130, which reads in pertinent part:
". . .
"Basic education shall be considered to be fully funded by those amounts of dollars appropriated by the legislature pursuant to RCW 28A.41.130 and 28A.41.140, each as now or hereafter amended, to fund those program requirements identified in RCW 28A.58.754, as now or hereafter amended, in accordance with the formula and ratios provided in RCW 28A.41.140, as now or hereafter amended.
". . ."
One can, of course, imagine situations in which the formula itself might be subject to constitutional challenge. For example, if it utilized 1970 district average salaries and a certificated staff-student ratio of one to 50, we would doubt that it would pass constitutional muster. Legislative flexibility in defining basic education, in short, is not unlimited.
5/Unlike those of certain other states such as, for example, California.