A decreasing countywide assessed valuation is being cited as the reason for a 3.42 mill increase in the property tax levied by the Davis School District. The increase will support the district's 1988-89 budget, which will take effect July 1.

Officials say preliminary projections show the county's assessed valuation will drop by about 1.3 percent from last year, necessitating an increase in the maintenance and operations levy assigned by the state and in the district's debt service levy.Officials said those levies could change, however, if the final valuation is higher than the current projection. Reese Roberts, who prepared the preliminary budget for the district, said a projected figure supplied by the state Tax Commission was used to prepare the document because the official valuation has not been determined by the county assessor.

Roberts said the debt service levy must go up to ensure the district raises sufficient money to pay for its outstanding bonds.

The budget contains no provisions for a cost-of-living raise for teachers or support employees and will require a slight increase in average class size since the district will hire 35 fewer new teachers than growth would normally dictate. Also, fees will increase for junior high and high school students, and a number of programs are targeted to move towards a self-sufficient funding process to take financial pressure off the basic school program. While some fees will increase, no increase in school lunch prices is planned.

Issues still to be resolved include contract negotiations with teachers and support personnel and meeting a projected 22 percent increase in the health and accident insurance premium. Superintendent Richard Kendell said a committee is studying the insurance situation and should report to the board within a few weeks. He said contract talks are continuing but are not progressing at this point.

The Davis Education Association issued a statement calling the proposed budget an "incomplete document" because contract negotiations are not complete and the proposed budget does not contain money for a number of items being discussed in the negotiation process.

DEA Vice President Brian Ferguson said, "It is a sad commentary that even without those items being addressed, this budget already includes increases in class size and takes a major step by increasing student fees." Ferguson also added, "There is insufficient funding for educators to do the jobs we are asked to do. At a time when the state is experiencing a surplus, this points out how essential it is that priorities be reassessed and that a substantial portion of that money be transferred to the schools for this year."

Kendell also told the board he is working on a program hit list to be implemented should proposed tax initiatives be put on the November ballot and pass. He said that while the needed cuts will not affect this budget, the board and public need to be apprised of the impact the initiatives could have and what programs would likely be affected if the $17 million projected decrease for the district becomes reality.

Jack Olsen, director of the Utah Taxpayers Association, told the board that his "gut" feeling is that the initiatives will not make it to the ballot. He said there are too many names not being certified on the petitions being submitted to the state, and he also questions whether those supporting the measure will get sufficient support from the minimum 15 counties needed to get the measures on the ballot.

Olsen said his group is supporting the property tax limitation initiative but not the other two proposals. He said the good thing about the initiative is that the limitation can be modified by the Legislature, and his group is willing to work with the lawmakers to find a compromise level that is reasonable and will not unduly hurt the state's education program. He said tax limitation is needed, but it must be reasonable.

The final budget consideration will be June 14 at which time a public hearing will be held to get public comment. The tentative budget approved Tuesday night includes $113.7 million for maintenance and operations (he basic school program); $678,900 for the special transportation fund; $650,600 for the recreation fund (sed to maintain outdoor playground facilities); $5.8 million for capital projects; $11.3 million for debt service; $8.99 million for the school foods program; $210,000 for the vocational home building program; and $75,100 for the district foundation.

The board will meet at 7 p.m. in the central office auditorium in Farmington to consider final adoption of the budget.