Hawaii-2018-SB2261-Amended

SECTION 1. The legislature finds that public schools in Hawaii are not adequately funded to meet all student needs. In comparison to school districts of similar size in other states, Hawaii ranks two hundred twenty-seventh in per-pupil funding before adjusting for cost of living. Private education expenditures per-pupil averages $15,173 while public education expenditures per-pupil trails behind at $12,855. Hawaii is also ranked last nationally in capital improvement expenditures for public schools, appropriating about $300 per pupil, which lacks compared to other states that average $1,200 to $1,500.

The United States Department of Education considers over seventy per cent of Hawaii's public schools to be Title I schools. A large portion of Hawaii's student population consist of "high-needs" students, those who qualify for free or reduced price lunch, and of those students most are either an English language learner or a special education student. In addition to the dilapidating school facilities that average sixty-one years in age, the issue of funding for public education continues to grow.

Hawaii ranks last out of fifty states and the District of Colombia in starting and median teacher salaries adjusted for cost of living, according to a 2017 study performed by WalletHub.com. Mid-career teachers in Hawaii are currently paid $15,000 to $25,000 less than their mainland counterparts. This puts Hawaii students at risk due to the lack of qualified teachers. Currently, there are three hundred twenty-eight newly employed teachers who were hired without education degrees and two hundred newly emergency hires without a college degree. Without having the expertise in the fields that they are teaching, students are not getting quality education.

The legislature further finds that article X, section 1, of the Constitution of the State of Hawaii requires the State to provide a system of public education. The jurisdiction over public schools lie within the State and as a result, funding for public education in Hawaii is primarily sourced from the general fund of the State.

Insufficient education funding results in delayed repairs to school facilities, overheated classrooms, higher class sizes, a lack of adequate classroom supplies, elimination of arts and career and technical educations courses, budget cuts for special education and English language learner programs, and an increasing number of vacant teacher positions statewide. It is necessary to develop a new means of funding Hawaii's public education system to ensure that the State will be able to prepare children to meet the social and economics demands of the twenty first century.

The purpose of this Act is establish the education special fund and to allocate twenty-five per cent of the general excise tax revenue collected in addition to other sources of educational funding to be deposited into the education special fund for the purpose of funding public education.

SECTION 2. Chapter 302A, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§302A- Education special fund established. (a) There is established within the state treasury a special fund to be known as the education special fund to be administered by the department of education and into which shall be deposited twenty-five per cent of the general excise tax revenue for the purpose of funding public education.

(b) The education special fund shall not be subject to sections 36-27, 36-30, and 37-53. Expenditures from the special fund shall be subject to sections 37-31 and 37-33 through 37-40.

(c) All amounts in the education fund shall be exempt from all taxes and surcharges imposed by the State or the counties."

SECTION 3. Section 237-31, Hawaii Revised Statutes, is amended to read as follows:

"§237-31 Remittances. All remittances of taxes imposed by this chapter shall be made by money, bank draft, check, cashier's check, money order, or certificate of deposit to the office of the department of taxation to which the return was transmitted. The department shall issue its receipts therefor to the taxpayer and shall pay the moneys into the state treasury as a state realization, to be kept and accounted for as provided by law; provided that:

(1) A sum, not to exceed $5,000,000, from all general excise tax revenues realized by the State shall be deposited in the state treasury in each fiscal year to the credit of the compound interest bond reserve fund;

(2) A sum from all general excise tax revenues realized by the State that is equal to one-half of the total amount of funds appropriated or transferred out of the hurricane reserve trust fund under sections 4 and 5 of Act 62, Session Laws of Hawaii 2011, shall be deposited into the hurricane reserve trust fund in fiscal year 2013-2014 and in fiscal year 2014-2015; provided that the deposit required in each fiscal year shall be made by October 1 of that fiscal year; [~~and~~

[](3)[]]Commencing with fiscal year 2018-2019, a sum from all general excise tax revenues realized by the State that represents the difference between the state public employer's annual required contribution for the separate trust fund established under section 87A-42 and the amount of the state public employer's contributions into that trust fund shall be deposited to the credit of the State's annual required contribution into that trust fund in each fiscal year, as provided in section 87A-42[.]; and

(4) A sum from all general excise tax revenues realized by the State that is equal to twenty-five per cent of the total amount of the revenues shall be deposited into the education special fund in each fiscal year for the purpose of funding public education."

SECTION 4. There is appropriated out of the education special fund the sum of $ or so much thereof as may be necessary for fiscal year 2018-2019 for the purpose of funding public education.

The sum appropriated shall be expended by the department of education for the purposes of this Act.

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect on July 1, 2018.

THE SENATE	S.B. NO.	2261
TWENTY-NINTH LEGISLATURE, 2018		S.D. 1
STATE OF HAWAII