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Education funding fight heads to Round 3

Wyoming’s Legislature will convene Monday with no clear solution to education funding and its House and Senate deeply divided over the issue, a situation mirroring the close of last year’s session, education advocates say.

Today, estimates of the shortfall in education funding vary, but the Legislative Service Office puts the figure at $661 million — $484 million for K-12 funding, and another $177 million for school construction and maintenance. LSO made its estimate using the governor’s recommended budget and the most recent revenue projections.

For the months between the sessions, lawmakers approached education funding from three directions. The Joint Education Committee looked for cuts. The Joint Revenue Committee searched for new funding sources. The Select Committee on School Finance Recalibration examined the funding model.

Senate President Eli Bebout (R-Riverton)

They made no breakthroughs. The recalibration committee received an in-depth study of education spending but rejected its consultants recommendations. Nor are there cuts or tax reforms substantial enough to erase the funding hole left from the minerals slump of the last two years. While many paths forward exist, no consensus emerged on which one to take to sustainably fund education at the levels demanded by Wyoming’s Constitution and court system.

Meanwhile, education advocates see a House and Senate that remain at loggerheads.

During the 2017 session, the House advanced an education compromise that included some conditional tax increases and some cuts. The Senate, led by Senate President Eli Bebout (R-Riverton), stripped the tax increases and increased the number of cuts. Negotiations between the bodies nearly broke down in the last days of the session. The resulting bill, passed late on the last day, imposed more than $78 million in cuts over the next two years with no tax increases. None involved thought the compromise was a durable solution.

The differences between the chambers has not diminished over the last 11 months. Two school superintendents worry it has hardened to a point that will make negotiations difficult.

Education advocates, once nervous, now bolstered by recalibration

The Senate called for the recalibration effort during those last negotiations. Some lawmakers in the House thought it misguided from the beginning.

Speaker of the House Rep. Steve Harshman (R, HD37, Casper)

“I wasn’t a guy who wanted to recalibrate,” Speaker of the House Steve Harshman (R-Casper) told WyoFile this week. “Be careful what you ask for,” he described his thinking at the time, “I don’t think it will come in $200 million less.”

A set of education consultants new to the state analyzed recalibrating the model. But the fresh eyes of consultants Augenblick, Palaich and Associates did not find hundreds of millions of dollars in waste. To the contrary, the consultants found the current model underspends by about $70 million compared to what’s needed to provide an equitable and quality education to Wyoming students.

To prepare their report, APA consultants compared Wyoming’s curriculum to other states. They conducted interviews and listening sessions with education stakeholders including teachers, Gov. Matt Mead, his staff, and Superintendent of Schools Jillian Balow and her staff at the Wyoming Department of Education, according to the report. They also conducted an equity study — to see if educational opportunities are provided equally across the least-populated state as the Constitution demands. Eight panels of educators judged what it would cost to serve students. The consultants studied how the Wyoming schools that outperformed their peers used their resources. The consultants will be paid just under $460,000 for their work, according to their contract.

The Select Committee on School Finance Recalibration meets in Riverton. From left to right: House Education Chairman David Northrup, House Recalibration Chairman Albert Sommers, House Revenue Chairman Mike Madden, Senate Revenue Chairman Ray Peterson, Senate Education Chairman Hank Coe, Senate Minority Leader Chris Rothfuss, Sen. Bill Landen

The recalibration process moved more quickly than in the past, Campbell County School District Superintendent Body Brown said. “Usually we start in April and get it done barely in time,” he said. This year, the consultants didn’t truly begin their work until July, Brown said.

Part of the delay came from disagreement between House and Senate committee members over what the consultants should be asked to examine.

Some observers felt the Senate wanted to use the recalibration process to justify cuts for spending. “I think that’s what they were hoping for,” said Donna Little-Kaumo, superintendent of Sweetwater County School District #2. If so, it backfired, which didn’t surprise education workers like Little-Kaumo.  

“Because we live and breathe it, I knew that if the consultants knew their stuff … they would come back and say we’re not overfunded and in fact we’re underfunded,” she said.

The study will make it more difficult for lawmakers to justify making cuts, said Ken Decaria, a lobbyist for the Wyoming School Board’s Association. Though unadopted, the new recalibration report is the second in three years that has produced a price tag above what the Legislature is actually paying.

“They’ve already gone past the point of any defensible position” with cuts thus far, Decaria said, “if they’re really looking at it in the manner of what does it take to provide a constitutionally mandated education to Wyoming students.”

On Jan. 29, Special Assistant Attorney General Michael O’Donnell spoke to the recalibration committee. O’Donnell’s job partially focuses on maintaining the constitutionality of the state’s school finance system. A series of Wyoming Supreme Court decisions created an obligation for lawmakers to fund education based upon the costs of a high quality education, as set through the state’s assessment mechanism. Outside consultants define what must be included in a complete education “appropriate for the times” — as mandated in the state’s Constitution. Figuring out how to pay for it is the Legislature’s job.

Three out of the four largest school districts have already threatened to sue the Legislature if it cuts education too deeply, according to an April report in the Casper Star-Tribune.

O’Donnell has told lawmakers they should seek to do what they think best serves education and the state. But, he told them on Jan. 29, the reasons they take action could matter in court.

“Your priorities may shift, that’s, I think, quite expected and perfectly constitutional,” O’Donnell said. “As long as you do it rationally, with a basis … and I’ll finish with this statement: And not just to save money.”

Loggerheads

One way around a lawsuit would be to change Wyoming’s Constitution so it doesn’t place such a high priority on education. Doing so would take an amendment passed by two-thirds of both legislative chambers, followed by a majority vote in favor of the change in November’s statewide election.

One constitutional amendment dealing with education has already been filed for consideration by the 2018 Legislature. Brought by Sen. Ogden Driskill (R-Devils Tower) and four House members not in leadership roles, the amendment would cut cost-based funding from the Constitution. Instead, Wyoming would calculate the five-year average of the cost of public education in five states — Colorado, Idaho, Montana, Nebraska, South Dakota and Utah — and tie Wyoming’s funding to that amount.

Senate President Eli Bebout (R-Riverton) addresses the Joint Revenue Committee in Thermopolis in August. (Andrew Graham/WyoFile)

Changing the Constitution is a route the Senate president has suggested. At a June 12 meeting of both the recalibration and the revenue committees, Bebout suggested the Legislature should “let the people decide” who gets to set education costs.

“If we come back from recalibration and the [deficit] amount is $300-400 million a year, that’s substantial,” he told the lawmakers. “At that point, I would ask you to consider what’s wrong with letting the people decide?”

He then mentioned an amendment proposed last year by Sen. Dave Kinskey (R-Sheridan), which Bebout cosponsored. Kinskey’s constitutional amendment would have specified that the Legislature sets education funding levels, and prohibited the courts from demanding more funding. It passed the Senate 26-4.

Harshman assigned it to the House Education Committee, where it was killed by a unanimous vote.

But for Bebout, the idea remains a valuable one. Last week, he alluded to the idea during an interview on Wyoming PBS. As Senate president, he takes “a bigger, broader perspective in terms of what we can afford, rather than just what the courts tell us to do,” Bebout said.

“I’m a proponent of maybe the Legislature should be the ones who decide how much we spend, rather than the courts dictating that,” he said. “Of course that’s not the situation we have.”

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The discussion exemplifies the divisions observers see between the House and Senate over education funding. Last year, that debate led to the late compromise, which did not establish a long-term solution to the education funding problem.

Brown, Little-Kaumo, Decaria and others who have observed the recalibration committee across the months between sessions see no signs that the dispute between the two chambers has thawed.

“I think it’s even more exacerbated now,” Little-Kaumo said.

Brown hopes the two chambers will find some common ground as the session begins. “Anytime you’re at loggerheads and you’re too entrenched in where your position is to listen to where the other side is, it gets difficult,” he said. “I would hope that the discussion doesn’t start out with everybody dug in already.”

If the two chambers are divided, it stems from their leaders, said Nate Martin. Martin is director of Better Wyoming, a progressive advocacy organization that has turned heads with its fiery rhetoric, according to a profile in the Casper Star-Tribune.

Bebout, an oil and gas businessman, and Harshman, a high-school football coach, bring different priorities to the debate, Martin wrote in an email to WyoFile. To him, Harshman has emerged as the clear champion for education.

“Harshman understands and prioritizes education,” Martin wrote. “He gets that it’s an investment that pays dividends. He knows you can’t slash teacher salaries and expect to employ good educators. You can’t close small-town schools and expect rural communities to thrive. And you can’t develop a prosperous economy without an educated workforce.”

Not so down the hall in the Senate, Martin said.

“Nothing Bebout says or does indicates that education is a priority for him,” Martin said. “It’s just another fiscal burden—like road maintenance.”

Superintendents, lobbyists and others take notes and listen to lawmakers at a June meeting of the Select Committee on School Finance Recalibration in Riverton. (Andrew Graham/WyoFile)

At the last Revenue Committee meeting on Jan. 31, Bebout and other Senate leaders pushed back on notions that they are anti-education. “No one is in favor of shutting down small-town Wyoming,” Bebout said. “The speaker and I, we both want the same thing. We want to do the best we can but I just want to make sure we get the bang for our buck.”

The recalibration process did not explain why Wyoming pays more for education than the states around it, Bebout said. “The answers I’ve heard don’t satisfy me.” Bebout and other senators have frequently expressed the view that Wyoming’s educational performance does not align with the money being spent on it, in comparison to other states.

At the Jan. 31 revenue committee meeting, House Revenue Committee Chairman Mike Madden asked if the consultants had been asked to compare Wyoming’s education costs to its neighbors. They hadn’t, LSO staff told him. “But it turns out now it’s a significant question mark in people’s minds, it seems like,” Madden said.  

House leadership largely reject the view that Wyoming’s education system isn’t living up to its costs. They say the education system has performed well to very well, given the challenges of a rural state.

“If we cut education, do we expect our outcomes are going to increase?” asked Rep. Albert Sommers (R-Pinedale), the House chairman of the recalibration committee.

The Legislature is a 90-member deliberative body, and the path for a bill to become law is long and full of checkpoints, particularly during a shortened budget session. But the views of leadership matters, said Marguerite Herman a lobbyist with the League of Women’s Voters.

Herman has followed the Legislature since the 1980s, as a journalist and then a lobbyist. She has rarely seen the two chambers this divided, she said.

“One might naively think that all competition is good,” she said. “Unfortunately whenever I’ve seen the chamber competition come through … relationships can fray by the end of the session.

“I have seen a lot of good ideas go down in flames because of wounded feelings,” Herman said.

Slow down, House leaders say

Harshman has said the five-part compromise the House proposed last year would have put education funding on a sustainable track. The Legislature can find that kind of compromise again, and debate is part of the process, he said. Referencing what he called a legislative maxim, Harshman joked that it takes three sessions to produce a good bill.

Perhaps the biggest change from the end of the last session to today is the state’s economic outlook, which has improved over two consecutive reports. In January, state fiscal experts adjusted their projections of revenues to the School Foundation Program upward by nearly $42.2 million compared to their October forecast. The change means that $236.6 million will be taken from savings to cover school costs, according to the Consensus Revenue Estimating Group. The infusion will come from the state’s “rainy day fund,” officially known as the Legislative Stabilization Reserve Account.

While that improvement helped put an end to the discussion over taxes, it also has given the Legislature time to avoid making drastic decisions now, Harshman said. “Some of this stuff we can slow down a little bit and back off,” he said.

Harshman and Sommers both told WyoFile they believe a solution can come from breaking open Wyoming’s complicated stream of revenues and savings accounts and reorganizing them.

Sommers, who also sits on the Joint Appropriations Committee, said that work had already begun. The JAC balanced its budget without major cuts, largely through rearranging revenue streams and preventing hundreds of millions of dollars from flowing into permanent savings accounts.  

“There’s some policy shifts happening that over time can have a significant impact on our shortfall,” Sommers said.

He rejected the idea that differences between the House and the Senate are insurmountable.

“Time will tell, but there’s no reason to think we can’t work through our differences,” he said. “We have to.”

Students listen to teacher Natalie Lyon in her third grade classroom at John Colter Elementary School in Jackson earlier this year. (Angus M. Thuermer Jr./WyoFile)

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Andrew Graham is reporting for WyoFile from Laramie. He covers state government, energy and the economy. Reach him at 443-848-8756 or at [email protected], follow him @AndrewGraham88

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