5. The proceeds of all property granted to the State, when the purpose of the grant is not specified or is uncertain. 6. Funds accumulated in the treasury of the State for the disbursement of which provision has not been made by law. 7. The proceeds of the sale of timber, stone, minerals, or other property from school and State lands other than those granted for specific purposes. 8. All moneys other than rental recovered from persons trespassing on said lands. 9. Five percent of the proceeds of the sale of public lands lying within the State. 10. The principal of all funds arising from the sale of land and other property granted to the State for the support of the common schools. 11. Such funds as may be provided by legislative enactment." The principal of the permanent school fund has grown until at the present time it amounts to more than $24,000,000. During the course of our history, legislation has been enacted from time to time pertaining to the investment of the funds. State Supt. C. W. Bean, in his report of 1894, called attention to the fact that in that year the smallest quarterly balance of the fund was $131,712.15, and that it was impossible to get good investments, so advocated the buying of State warrants. Again State Supt. Frank J. Browne in 1898, reported that $230,000 remained uninvested, and recommended investment in warrants of State normal and capitol lands, the State to guarantee the annual interest.3 A law was passed in 1899 authorizing the investment of the permanent school fund in State warrants. The authority to do this was questioned later, and was held unconstitutional by the State Supreme Court. It was repealed January 26, 1927. The statutes of 1899 provided that whenever there was $5,000 or more in the school fund and the State had an outstanding warrant indebtedness of a greater sum than $5,000, it was the duty of the State auditor and the governor to issue 20-year, 3%1⁄2 percent, bonds which were to be credited to the account of the permanent school fund.4 During the territorial years and throughout the early State period the funds were invested in high-grade bonds. The legislation of 1897 as amended in 1903 shows very clearly the general policy in protecting the principal. "Whenever there shall be in the perma nent school fund of the State $1,000 or more, available for investment, the board of State land commissioners may invest the same in national, State, county, municipal, or school district bonds bearing not less 2 Ibid, p. 373. Report, Superintendent of Public Instruction, 1898, p. 289. than 3% percent interest per annum, paying therefor not more than the par value thereof." The investment of the funds was placed in the hands of a newly created board composed of the governor, State treasurer, and State auditor, known as the State board of finance in 1907. Since that year the investment of the fund has been handled by this board. At the present time the money is practically all invested in school district bonds. Safeguards have ever been placed around the school money to insure its perpetuation for future generations. In 1923 the law provided that "None of the permanent school fund of this State shall ever be loaned to private persons or corporations, but it may be invested in national, State, county, municipal, or school district bonds." The law also provided that when $5,000 accumulated in this fund and could not be invested as provided by law it must be invested in State of Washington bonds. One very wise provision was written into the law of 1907 which furnished a market for school bonds. School district bonds were given preference in the investment of the permanent fund.8 Revenues from school lands.-The control of the common-school grants has gone through four different types of administrative organization. During the territorial period they were administered by the county commissioners; upon admission to statehood in 1890 they were placed in the hands of the State land commission, composed of the State land commissioner, the secretary of state, and the superintend ent of public instruction. In 1893 the personnel of the board was changed, to consist of three members appointed by the governor in addition to the State land commissioner. The duties of the State board of land commissioners are multitudinous and of much importance to the educational interests of the State of Washington. The amount of land of which the State came into possession origi nally was more than 2,000,000 acres. Of this amount approximately three-fourths remains unsold. The following tabulation indicates the status of the common-school grants in 1928. Laws of Washington, 1903, ch. 95, p. 143. 'Laws of Washington, sec. 1, p. 17. "Code of Public Instruction, 1923, p. 26. Ibid., p. 111. 'Twentieth Biennial Report, Commissioner of Public Lands, 1928, Olympia. TABLE 15.-Status of common-school grants and indemnity lieu lands, 1928 The ultimate value of the endowment cannot be ascertained. From the foregoing it is seen that much wealth will accrue to the educational permanent fund when the lands are finally disposed of. The value of the various permanent funds is shown in the following table. On September 30, 1930, the cash balance and investment stood at $23,919,514.32, an increase of $5,420,000 in 2 years.' 10 Permanent educational funds in Washington Permanent common school.. Agricultural college permanent... Charitable, educational, penal, and reformatory institutions. Normal school permanent. Scientific school permanent. Total.... $23,919,584.32 1,197,325.95 1,232,146.15 829,976.59 1,880,231.88 294,065.71 29,353,330.60 Land exchange.-When the Federal Government set aside the national forest reserves, subsequent to the admission of Washington as a State, it enclosed within them nearly a half million acres of unsurveyed common-school lands. The Federal Government maintained that the forming of the forest reserves extinguished the claim of the State to the land. The State maintained the opposite view. In June 1913 Commissioner of Public Lands Clark V. Savidge, and Attorney General W. Vaughan Tanner went to Washington and spent several weeks in conference with officials there, in order to save this endowment for the children of the State. The Federal Government finally recognized the claim of the State of Washington by entering into an agreement known as the land exchange agreement, which provided that the State's timber should be cruised and that the State should receive therefor solid blocks in exchange for its scattered sections, these blocks to be located on the edge of the forests, the exchange to be as nearly as possible of equal area and equal value.11 Much of the indemnity land has been selected. It is the plan of officials to hold permanently for the income which may be derived from the sale of the timber. It is estimated that ultimately one-half million dollars yearly income may accrue from this source alone. 10 Twenty-first Biennial Report of the State Auditor, 1930, p. 255. The accumulation of this portion of the permanent fund from the four sources, (1) land sales, leases, condemnations, and fines; (2) 5 percent of the proceeds from the sale of United States Government lands; (3) miscellaneous; and (4) escheated lands or property, is given in the following table: TABLE 16.-Growth of permanent fund from land endowment 1 McArdle, L. D., Financial History of Washington, 1923, p. 679. District revenues.- -The legislature of 1889-90 authorized the district to levy a tax of not to exceed 10 mills on all the taxable property of the district. The rate of the district tax was to be determined by the voters of the district at a regularly called meeting of the electors.12 Certain fines were diverted to swell the district fund. For example, a fine of not less than $50 might be imposed upon one willfully disturbing school or a school meeting; abuse of a teacher drew a fine of from $10 to $100; parents who did not send their children to school at least 3 months during the year were subject to a penalty of from $10 to $25.13 There was some special legislation applying to districts having cities of more than 10,000 inhabitants. This will be treated in another place. We shall follow here the legislation applying to other districts. There was no change in the limit of the millage levy by directors of this class of districts for a number of years. In 1901 directors still retained power to levy 5 mills, and an additional 5 mills might be voted 12 Laws of Washington, 1889-90, sec. 52, p. 374. 1 Ibid., p. 382. by the district. The boards of directors of union districts might levy a tax of 3 mills in that year. The levying of such tax by union school district boards did not prevent the electors of any district within such union district from levying a tax of 10 mills.14 In 1907 the law was changed allowing directors of union districts to levy 5 mills in addition to the 10 mills allowable in inclusive districts. 15 In 1909 the school law was recodified through the work of a commission appointed by the Legislature of 1907 for that purpose. The legislation of 1909 first defined the three classes of districts and the union high school district. First-class districts embraced cities of the first and second class; second-class districts embraced cities of the third and fourth class; all other districts were classed as third-class districts. While there were some powers granted to directors of second and third-class districts, the law made no distinction in the powers of levying taxes. This new law gave directors the authority to levy a tax of 1 percent of the assessed valuation of the district, while up to 2 percent might be levied by a majority vote of the district.16 Directors were required to submit an itemized estimate of expenses to the board of county commissioners, who were required to make a levy in accordance with the estimate. There has been no legislation since that date which affects the power of district directors, except that in 1923 directors were empowered to levy a tax not to exceed 1 mill above the limit otherwise provided for departments or classes of vocational nature such as agriculture, home economics, trade or industrial subjects. 17 City districts.-The legislation of 1889-90 provided that districts of more than 10,000 inhabitants should be exempt from a county tax for school purposes, and should not be entitled to receive any portion of the common-school fund raised by county tax.18 The aggregate tax could not exceed 10 mills, of which 5 could be levied by the directors without a special election. The directors were empowered to levy a tax to produce $25,000 for purchasing sites and schoolhouse construction without a vote of the people. In 1899 this amount was increased to $50,000.19 In 1903 it was provided that the aggregate tax should not exceed 1 percent of the taxable property, but that the board of directors "by 14 Laws of Washington, 1901, ch. CLXXVII, sec. 17, p. 381. 15 Laws of Washington, 1907, ch. 163, sec. 5, p. 374. 16 Laws of Washington, 1909, ch. 97, pp. 297-303. 17 Laws of Washington, 1919, sec. 7, p. 458. 18 Laws of Washington, 1889-90, ch. XII, sec. 32, p. 395. 19 Laws of Washington, 1899, sec. 14, p. 319. |