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Quality education: Key to Wyoming’s society and economy

And the beat goes on! At least the Wyoming cycle of boom and bust goes on, and with it the recurring pains when mineral revenues tank. It’s an old story.  And, today, it’s a painful story because the “boom” seems to be disappearing from the “boom-bust” cycle. As University of Wyoming visiting lecturer, Trevor Houser, partner at the research firm Rhodium Group, pointed out recently, this time “it’s different.” The coal market may be in permanent decline and with it the revenues Wyoming has so thoroughly depended upon all these years to support state services and education.  To illustrate the mood, it got downright rough lately in Cheyenne when the management council, in a contentious session, changed language for consultants looking into the school funding model. Members of the interim education committee claimed overreach. And, tempers flared. As one wag noted, “It’s hard to be a happy camper when the well’s running dry.”

This week’s forum addresses the troubling challenge of funding education during a bust cycle. I’ve invited a former state senator, a current one, and a high school teacher to address the issue. Here, Mike Massie, former state senator and former member of University of Wyoming Board of Trustees, provides perspective and context through a look at the history of education in Wyoming and a review of its importance in Wyoming’s culture.

At bottom is the dilemma of how Wyoming meets its constitutional obligation to provide quality education equally for all its citizens in the face of an unprecedented $400 million shortfall in revenues needed to accomplish that end.  Nothing is more distasteful than talk of raising taxes, but, as Massie points out, we probably won’t be able to cut ourselves out of this dilemma either.  So, what’s your thinking?  In the words of Bob Dylan “the times, they are a changing” and we need citizen participation in this discussion as never before.  We’ll look forward to your comments. — Pete Simpson.

The schoolhouse had burned down. Parents and community leaders searched for a temporary location while the long, hard work of building a new one started. They decided to move into the town’s vacant 1870 jail, among the first ones built in the territory.

Like most of the town, the jail had been abandoned as a result of the mining bust. Since the back portion of the building with the four cells was unusable, they squeezed whatever benches and desks they could find into the front room and installed a stove for warmth during the fierce mountain winters. Someone painted the alphabet along the top of the front wall. Students and the teacher arrived; education continued.

Mike Massie

Education was a vital part of this frontier town, just as it has always been for our nation. The founders based the U.S. Constitution on the understanding that an educated populace was necessary to sustain self-rule. And that notion played out as the nation advanced westward throughout the 19th century: the most pressing matter for thousands of new settlements was the construction of schools. After Southern delegates walked out of Congress at the start of the Civil War, the remaining legislators immediately passed three bills critical to sustaining a nation — the Homestead Act, the Transcontinental Railway Act and the Morrill Act, which provided public lands to states to create universities. By the end of the century, the United States had become the first country on earth to provide free, universal public education through high school to all its citizens, an accomplishment that helped propel our nation to greatness in the next century.

Wyoming’s experiences with education have reflected those of our nation. This should not be surprising since the public education movement was maturing nationally when Wyoming was moving toward becoming a state. In preparing Wyoming’s application for statehood, the members of the 1889 Constitutional Convention borrowed heavily from the constitutions of the former territories that bordered it. After all, those places had successfully navigated the congressional process to become states, so why reinvent the wheel?

One provision the convention adopted stipulates that all children are guaranteed access to a quality education. Another specifies that instruction at the University of Wyoming be as nearly free as possible. It is important to note that Wyoming’s constitution does not ensure its residents access to any other governmental service other than public education. In fact, Article 1 lists education on equal footing with other individual rights such as freedom of speech and the press, freedom of religion, and due process in courts. As with our nation, relatively unfettered access to the highest quality public education possible is ingrained in Wyoming’s DNA.

Boom and bust

Like its boom-and-bust economy, Wyoming has had its ups and downs in fulfilling the educational promises in its constitution. Disparities among school districts in wealth, wages, instruction and facilities have plagued the K-12 system for much of the state’s history. Sometimes at the urgings of the courts, state legislators would periodically address these disparities by offering additional money to compensate for the significant differences in local wealth, but the efforts were usually ephemeral, dissipating when the next bust came along.

Then a blockbuster Wyoming Supreme Court decision arrived in 1995. After carefully examining the provisions in the state’s constitution and the disparities in educational opportunities among the 48 school districts, the court unanimously declared that Wyoming’s systems of school finance and instruction were unconstitutional and directed the Legislature to fix them. The 50-page ruling is worth reading; it is clear, well-written and an insightful examination of the importance of education to the state, as defined in the constitution. It was the most far-reaching state court ruling in the nation at that time.

In describing what the Legislature must do to meet constitutional muster, the court noted that the constitution places quality above money. It emphasized that lawmakers must first define what constitutes a quality education, then fund it. The second step was to ensure that every student has an equal opportunity to that education. The ruling included instruction as well as facilities.

While there was a great deal of grumbling about how the justices had overreached their authority, the Legislature nevertheless reformed its system of public education over the next several years to meet the court’s decisions. Legislators defined in statute the various elements of a quality education and directed the Wyoming State Board of Education to issue rules and regulations to provide further details.

These elements are usually referred to as the “educational basket of goods and services.”  Most of them are courses of study and services that must be conveyed to all students, regardless of where they live in the state. In many instances, school districts can determine the details, such as what foreign language, physical education, social science and optional classes to offer. After all, the court ruled that the constitution ensures each student an equal opportunity to a quality education, not the exact same set of courses in each district.

After determining the content of the “basket,” the Legislature figured out the costs of providing it. The price tag was substantially higher than pre-1995 funding levels, resulting in large increases to school districts and more than doubling the state’s K-12 education budget. State appropriations are provided to each district through a block grant, giving them some flexibility in determining how the basket is delivered.

During this period of school reform, one of the most contentious issues involved school capital construction and major maintenance. After years of legislative debates and additional court rulings, the Legislature eventually decided to fund school facilities through the state rather than through the passage of local bond issues.

It was a mixed blessing for local communities. For over 100 years, school districts had determined how to build school facilities and had funded them through voter-approved bonds. Now, the state would make most of these decisions, in consultation with the school districts. Local property owners received a big tax break, particularly the energy industry, for the state would now pay for major maintenance and new or renovated buildings rather than local property owners. This was essentially a tax break of about four mills on average statewide. Relying primarily on coal bonus money for the past 20 years, the state has spent approximately $3 billion on school construction and maintenance with little assistance from local taxes. Wyoming now is a national leader in the quality of its school facilities.

The bottom line is that the 1995 court ruling resulted in a more equitable and better quality K-12 system. But, it is important to note that it was beyond the purview of the court to determine if the mechanisms the Legislature had defined to fund this reformed system were sustainable. Despite several attempts by some legislators to diversify the stream of money that funded K-12 education, the Legislature decided to rely heavily upon revenue from energy development. It was predictable that when these industries encountered the next bust, educational funding would become a big financial problem.

Historical emphasis on budget cutting

Each bust in the state’s history has posed the same question to legislators and governors — should they raise taxes to maintain a relatively constant flow of revenue and services, or slice state budgets. The answer should be a balance of the two, but in fact it has almost always been a heavy emphasis on budget cutting. For the current bust, the 1995 court decision threw a wrench into this traditional approach. The court determined that an equal opportunity to a quality education is a constitutional right in Wyoming, and not having enough revenue to support it is not a sufficient reason to ignore this fact.

This reality has perplexed the Legislature for the past two years. The state is faced with a $400 million deficit in funding K-12 education, and this figure doesn’t include ongoing needs for facility maintenance and construction. Yet, there is no plan to address the problem. This quickly became evident during the recently-completed legislative session when the House and Senate disagreed on how to deal with the deficit, finally concurring at the last minute to cut approximately $35 million. The roughly $2 billion in general government savings accounts remained untouched for now. This reduction comes after several years of not adjusting current school appropriations for inflation.

The Legislature’s decision kicks the can down the road while a special legislative committee thinks about a plan to present for the 2018 session.  The question on just about everyone’s mind is how much can the Legislature reduce the current basket of educational goods and services without coming into conflict with the constitution. It’s difficult to imagine slicing $400 million out of K-12 education and still have a model that is constitutional. As a handful of legislators have pointed out, the state can’t cut its way out of this predicament. New sources of revenue and diversions from the state’s rainy day fund appear to be a necessary part of whatever plan is developed.

One of the challenges lawmakers face is that it is a citizen legislature. While it has an outstanding staff to support its work, lawmakers can devote only so much time to their legislative duties outside of the annual session because most of them work full-time jobs to support themselves and their families. Further, since the 1995 decision, the executive branch through the Wyoming Department of Education and the State Board of Education has not been a major player in shaping educational reform, instead focusing on its administrative duties.

Given the seriousness of this fiscal crisis, Wyoming needs all hands on deck. The Legislature, Department, Board, school districts, educational organizations and the public must be involved in shaping the plan for the 2018 session. No one should want to sit back and re-litigate K-12 education, if for no other reason than the judges serving on the current State Supreme Court may not take the same approach to the issue that their 1995 counterparts did.

As the 1995 decision made clear, the buck stops with the Legislature when it comes to fulfilling the constitutional mandate for quality education. Is our citizen legislature up to the task?  If not, another round of court cases will likely be inevitable even though few want to go down this road again.

All state agencies are warily watching how the Legislature resolves this issue, for the outcome will likely determine how much money remains available to support their work after the schools are funded. This includes higher education. The constitutional guarantees of a quality education apply only to Wyoming’s elementary and secondary schools. Consequently, the community colleges and the University of Wyoming have already taken a bigger financial hit during this bust than the K-12 schools, and there is concern it may get worse.

For instance, UW will reduce its current biennial budget by approximately $42 million. This is in addition to moving more than $10 million away from the academic enterprise to administration to cover the increasing costs of utilities and a critical revamping of the budgetary system. The University will lose breadth and depth with the eventual loss of 300-400 positions, reduction in some student-support services and research opportunities, elimination of a handful of degrees, and increases in instructional loads for some faculty. This comes at a time when UW employees have received only two modest pay raises in the past nine years while experiencing increases in what they must contribute to their state retirement.

Despite the tough economic times, the Legislature has identified some one-time money to fund new structures for science, engineering, energy and athletics, with help from private donors. On the one hand, these further the university’s mission, while on the other, UW is struggling to find the internal resources to maintain the hundreds of thousands of additional square feet of space at a time when the staff is facing the brunt of the position reductions.

The community colleges are having similar budget shortfalls, with the seven colleges taking somewhat different approaches to reducing academic and student support expenses. These budget reductions are placing our institutions of higher education in difficult situations. State financial support and the cost of tuition are directly related. Historically, Wyoming has been a national leader in the amount of state funding it provides to its colleges and only public university, which in turn has permitted them to charge tuition that is among the lowest in the nation. When state funding shrinks, the colleges and UW feel pressure to make up the deficit with higher tuition and fees while recognizing the constitutional charge to provide instruction as nearly free as possible.

The Great Recession

During the nation’s 2008/09 recession, colleges and universities in most other states experienced large state budget cuts in higher education, and they responded by substantially increasing tuition and fees. This resulted in one of the largest redistributions of wealth in the nation’s history as students with little or no access to income assumed more responsibility for the costs of higher education while state governments decreased their support.

Many low-income students could no longer afford to go to college, and just about all students experienced sharp increases in debt. The amount of student debt shot upwards, creating an economic and generational problem that has become one of our nation’s pressing issues. Not only is it a substantial drag on economic development as graduates pay off loans rather than buy houses and cars, student debt is adversely affecting citizens of all ages primarily because lenders convinced Congress to exempt what students owe from bankruptcy proceedings. Over the past decade, those who are 60 and older have experienced the largest increase in paying off student loans, for seniors are having to assume payment of their children’s and grandchildren’s cosigned student loans. Social security checks are being garnished to pay the debt, forcing many retirees below the poverty line.

The overall student debt at UW is below the average of other Western universities, due in large part to the traditionally high level of state financial support. While UW charges the lowest tuition of any public doctoral-granting university in the nation, other universities have lower fees and several offer more affordable and modern housing. As a result, it’s important to look at the level of student debt and not focus solely on the cost of tuition. Among 31 Western universities in 2014, 10 had lower average debt than UW among students who graduated with loans. Arizona, Nevada, New Mexico and Utah had less average student debt collectively among its public universities than the Cowboy State did, even though Wyoming has the Hathaway Scholarship Fund, one of the nation’s largest student scholarship endowments.

To help compensate for the substantial drop in state revenue, Wyoming’s colleges and University are increasing tuition. For instance, a few years ago, UW adopted a policy of annual 4 percent tuition increases, which raise about $2 million at a time. On top of this, a committee of faculty recently recommended a nearly 325 percent increase in student fees, which is analogous to another 12 percent increase in tuition. The Board of Trustees didn’t approve this proposal, preferring to scrutinize it further. Will UW go down the path that other universities took during the 2008-09 recession, or will the spirit of the state constitutional provision prevail?

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During the 2017 legislative session, the governor and lawmakers created an initiative, ENDOW (Economically Needed Diversity Options for Wyoming), to explore how to diversify the state’s economy. Previous efforts in this regard have produced little, but much of Wyoming’s future depends upon not giving up on this worthy goal. History has demonstrated that a quality system of education is one of the fundamental building blocks of economic development and community stability. It doesn’t produce economic diversity by itself, but an effective system of education is an indispensable part of the solution. If the Legislature decides to cut its way out of this downturn with more and steeper reductions in educational funding, economic diversification will be an even bigger pipe dream in a 21st century world that prizes education.

Wyoming’s challenges with education reflect those of the nation. Throughout most of the 20th century, America benefited from a large gap in educational achievement between it and the rest of the world. This permitted our nation to become an economic, military and cultural superpower, but that winning edge is all but gone today. Many other nations have duplicated the U.S. approach to extending accessible public education to most or all its residents, including higher education. At the same time, our nation’s academic achievement has slowed due to decreased support for public schools (both financially and intellectually) and financial barriers to higher education.

The architects of the American constitution believed that education would be the great equalizer. It would prevent the growth of an aristocracy and provide all citizens with an equal opportunity for success regardless of their circumstances at birth. This fundamental notion of democracy is being tested today. The slowing of academic achievement is creating several problems for our nation but perhaps the most significant one is the stagnation of productivity and real wages and an increase in economic inequality that hasn’t been seen for a century.

We need to get our edge back. Education has played a pivotal role in sustaining self-government and propelling our nation toward greatness. Our constitutions recognize the practical importance of a solid education to the life, liberty and happiness of its citizens. During the good times, Wyoming’s elected officials have readily acknowledged this reality through appropriations of significant financial support to K-12 schools and higher education. It’s the difficult financial times that test our resolve. Wyoming must develop a realistic plan in how it will preserve the quality and essence of education during this bust, and continue to provide opportunity for its children and young adults. As the old saying goes, when the going gets tough…

On a final note, the old jail that served as a makeshift school in a frontier town is part of the South Pass City State Historic Site, 35 miles south of Lander in the foothills of the Wind River Mountains. Visit any day during the summer to see for yourself the alphabet on the jail house wall, the schoolhouse the town built in response to the fire, and the never-say-die attitude of our ancestors when it came to education.

Mike Massie is a former state senator and former member of University of Wyoming Board of Trustees — Ed.

 

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8 Responses to Quality education: Key to Wyoming’s society and economy

  1. Mary Ellen McWilliams July 5, 2017 at 8:51 am #

    It was so interesting, and informative, to read Mike Massie’s history of Wyoming education. He is certainly one of Wyoming’s most outstanding historians.

    Last night on WY PBS I heard a Charlie Rose interview with David McCullough in which he said “A sense of history is essential for competent leadership,” and also “We need to get history back into our education”. That emphasis, and understanding of the need, seems to have slipped a bit. I’d like to see Mike Massie and Pete Simpson get their heads together to come up their recommendations on how to accomplish that.

    It is great to see Gail Symons back in Wyoming, and working hard, after a distinguished career.

    Sheridan, Wyoming

  2. Gary Reynolds May 30, 2017 at 5:04 pm #

    Since 2006, the Wyoming Legislature has moved approximately $2.7 B from the School Foundation Program to other programs beyond the expressed purpose of this fund. The purpose of the School Foundation Program is to pay for education’ daily operations NOT to put money into the state retirement fund, finance school construction, etc. There is a 43 mill levy assessed statewide to fund the daily operation of K-12 public schools. Why did the legislature determine it was within their purview to make these transfers and bankrupt education?
    Gary Reynolds

    Dayton, Wyoming

    • Mike Massie June 3, 2017 at 2:56 pm #

      Gary:

      Sorry for the delay in responding. I have been out of the state and returned last night. The various sources of taxation for the state’s public schools, including local mill levies, make up a large portion of the school foundation account (SFA), but they don’t comprise all of it. Since one of the key findings in the 1995 Wyoming Supreme Court decision was that the current system of school funding was insufficient, additional sources of money has to be found. Consequently, in 1997, the legislature diverted a large chunk of the state’s share of federal mineral royalties away from local governments (among others) to the school foundation account to support K-12 schools.

      The intent when the SFA was created in 1997 was to use it solely to support school operations. Later, the legislature decided to divert surplus SFA funds to school capital construction and major maintenance. In essence, this kicked the can down the road in delaying any decision about having to identify a permanent source of state funding for maintaining and building schools. If I am remembering correctly, there was also a one-time diversion to help bail out the state retirement fund in the wake of the 2008 Great Recession. Of course, many beneficiaries of this fund are educators and other K-12 employees. The legislature also used general fund money for this purpose but diverted some SFA funds as well. The alternative would have likely been to convert the state retirement fund from a defined benefit fund to a defined contribution fund, to the determinant of educators and others.

      Also, during the mineral boom in the first years of the 2000s, several of us in the legislature took the windfall in mineral royalties to create the Hathaway Scholarship Fund, which has benefited thousands of Wyoming high school graduates over the past decade or so.

      You raise a good point given the current debate about how to deal with a large deficit in the SFA. You and others can certainly decide whether these diversions from the fund during the last decade were worth it.

      Mike

      Laramie, Wyoming

  3. Nate Breen May 23, 2017 at 4:22 pm #

    Well written and words which need to be read, and reflected upon. What particularly is of importance to me is Mr. Massie’s linking education to self-governance … to paraphrase Thomas Jefferson, for those to believe that a free republic can exist without a highly educated populace is to imagine something which has never existed.

    Cheyenne, Wyoming

  4. Ken Banister May 23, 2017 at 3:20 pm #

    Very well done, Mike!

    torrington, Wyoming

  5. Denise Greller May 23, 2017 at 1:27 pm #

    Thank you Mike Massie! I was in your Wyoming History Class back in the 1990s and loved every minute of it! Your article demonstrates your knowledge of Wyoming’s history and government as well as your analysis of education and education financing. Now if the interim committee responsible for making some decisions to ensure the quality education for the children of Wyoming would get busy to consider an income tax (yes I said the dirty word no one wants to hear) we might be able to solve the education crisis as well as fund othe government agencies.

    Laramie, Wyoming

  6. S. D. Smith May 23, 2017 at 10:50 am #

    Brilliant and well-written synopsis of our state’s situation…nice job, Mike! Education is definitely the key to our economic future, and we can’t cut our way out of this mess. Are we really paying our fair share? Until voters start to feel like they have a stake in this state’s future and agree to pay a small tax of some kind in order to invest in our growth, we will decline like a 3rd-world country. I hope more people will read this and think critically about our situation and avoid a knee-jerk no-new-taxes mentality that will keep us in a downward spiral.

    Laramie, Wyoming

  7. Lewis Bagby May 23, 2017 at 9:13 am #

    This is a wonderfully written, concise summary of Wyoming’s dilemma. It’s also a subtle call for visionary leadership in the state, from citizens to the state legislature and the governor’s office. Drama: will folks respond sensibly? Bravely? Not yet, it’s clear.

    Lewis Bagby, Wyoming

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