A proposed education funding bill that cuts $100 million a year could prompt layoffs around Wyoming, House lawmakers say as they prepare for another round of the education debate that has for years divided the Legislature.
The proposed cuts will force lawmakers from Wyoming’s cities and small towns to ponder the stark impacts of a dispute that has so far manifested in smaller, more manageable cuts to school districts, House Revenue Committee Chairman, longtime education advocate and high school football coach Steve Harshman (R-Casper) said.
Under this year’s proposed bill, “it’s going to be layoffs in every town in Wyoming,” he said.
A leading senator disagreed, arguing that school districts have built up “slush funds” and can use those reserves to get through the cuts. Lawmakers should trim back what the state gives to school districts, and re-examine the results and components of a Wyoming education, Senate Education Committee Chairman Charles Scott said.
Lawmakers on the Select Committee on School Finance Recalibration advanced a bill to the 66th Wyoming Legislature that includes both the cuts and the framework for a future sales tax increase to fund public schools down the road. Members of both the House and the Senate called the bill a vehicle for a possible compromise, though both sides expressed doubts that such a resolution could be reached.
“Some days I think so, some days not,” Harshman said when asked if this year’s bill would advance the state toward a long term arrangement for sustainable education funding.
Meanwhile, advocates for the state’s school boards and school districts said the Legislature’s proposed cuts might be deep enough to bring the state well afoul of its constitutional requirements for a free, equitable and complete education. While school districts do have some reserves as Scott suggested, those accounts are limited to 15% of a district’s budget by statute, Brian Farmer, the executive director of the Wyoming School Board Association, said. They are not sufficient to maintain current staff and programming if the proposed cuts go into effect, he said.
For years, public-education officials and advocates have warned the state could find itself back in court over school funding. Lawmakers are already funding education below the levels several different education consultants the Legislature has hired say are necessary to keep up with education requirements in statute.
“We’re at the place where we’re going to find a straw that breaks the camel’s back,” Farmer said.
Senators who have pushed for spending reductions for years believe the Legislature has both the right and obligation to cut school budgets in response to the state’s fiscal crisis, however.
“That’s the job of the Legislature because if we get it wrong the people can replace us in the next election,” Scott said. Still, he hopes for a more detailed debate on education requirements, one with more precision and nuance than the current bill structure, which would simply cut a percentage of each school districts’ budget.
“We have the constitutional right to do an across-the-board cut if we choose to,” Scott said. “But I don’t know if the courts will agree with that. It’s better policy all around to cut specific features.”
Under the proposed bill, school districts would take a cut based on a formula that uses school enrollment. Districts will likely take anywhere from 5-7% cuts, Farmer said, though some impact numbers remain to be crunched. The cuts will likely stay below 10% per district, Farmer said. That means in most cases the cuts will be below the levels Gov. Mark Gordon has proposed and enacted on state agencies.
In general, recent governors and lawmakers have made steeper cuts to state agencies than the state’s public education system since mineral revenues first began to dip in 2016 — a fact that is not lost on those calling for cutting down what Wyoming spends on educating its young people.
Debate set for March
Debate on school funding will likely not occur in the 8-day session that begins on Jan. 27, according to House Majority Leader Albert Sommers. Lawmakers hope to receive further public comment on the sweeping bill that in theory sets education funding levels for years. The measure will instead be debated in House and Senate education committees and by the full Legislature in its March session, Sommers said.
The March session is proposed to be an in-person gathering in the Capitol, depending on the state of the pandemic in Wyoming.
Schedules aside, in many ways the contours of the debate haven’t changed over the last four years. The Legislature has not significantly altered what it requires the state’s schools to teach, though it has added computer science requirements.
Many of the leading lawmakers on both sides of the debate remain in office, though the absences of former Senate President Eli Bebout (R-Riverton) and Senator Hank Coe (R-Cody) may be impactful, according to several legislative observers. Bebout and Coe both retired from the Legislature in 2020. Coe, a longtime chair of the senate education committee, passed away last week.
The debate will occur in a more urgent context, however, as mineral revenues that plunged in the wake of the pandemic and a recent oil price war are only beginning to stabilize. Education funding is propped up by the state’s savings accounts, lawmakers note, but if a resolution isn’t found soon, the state faces a “fiscal cliff” for school funding. Under current law and revenue projects, education will need around $298 million from savings to pay for schools in the current biennium, and close to $546 million for the next two-year budgeting cycle — 2023-2024. After that, there is no plan to cover for education’s shortfall.
“This is groundhog day, but we only get to do it so many more times,” Farmer said.
The majority of the state’s school boards — the elected officials closest to Wyoming communities — support a 1% increase in the state’s sales tax that would be devoted to education, according to a memo the Wyoming School Boards Association provided the recalibration committee in December.
Around 85% of school board members voted in favor of a resolution for a 1% sales tax increase. Such an increase, if dedicated wholly to education, would raise an estimated $164 million for schools in its first year. Notably, Farmer said, school board members from both small rural school districts and the state’s larger urban ones support the measure.
Such a tax’s onset could be triggered if the Legislature’s chief saving fund drops below $500 million, Harshman said. Education funding has slowly been draining down the Legislative Reserve Stabilization Account, after Harshman and other House members tied the account to school budgets in 2017.
According to the most recent revenue projections, Wyoming’s public school system is operating at deficits in the hundreds of millions of dollars. Those levels could drain the LSRA, or “rainy day fund,” down to around $543 million by 2025. The fund held $1.2 billion going into the current 2021-2022 budget cycle.
Once the LSRA reaches $500 million, the automatic transfers to support education cease. In the 2025-26 biennium, if nothing changes in revenues, spending or law, public schools would need to find $649 million, according to a Legislative Service Office fiscal profile. There is nowhere for education to find that staggering sum in law today.
Funding school programming is just one piece of the problem. The Legislature has built and maintained schools for years using money from new coal mining leases, and that revenue source has dried up with coal’s decline. Considering projected construction and maintenance projects, the budget for school construction will run a $146 million deficit in 2023-24, and a $314 million deficit the biennium after that.
Like Harshman, both Sommers and Scott are far from certain the two chambers and the different legislative points of view might be reconciled this year.
The Legislature may have to discuss taxation and school funding cuts in separate bills, Scott said, despite the link House leaders seek to establish between them. “Each method of dealing with the schools is going to have its supporters and detractors and each method of taxation is going to have its supporters and detractors,” Scott said.
Sommers hopes the Legislature has a more comprehensive debate on what the state will provide its schoolchildren in the future, and to what extent lawmakers are willing to pay for a good education in Wyoming. Until revenues from coal, gas and oil started dropping, neither voters nor lawmakers gave sufficient thought to what public education cost, since fossil fuel companies were paying the bills, he said.
“It’s this continuing education process of the public and the [legislative] bodies,” Sommers said. “If you want to cut your way out of it, what does that look like? How many teachers are you going to lay off?”
School districts are ready for a firmer resolution on the funding question that has plagued them for years now, Farmer said. That desire drove the widespread support for the sales tax among school board members, Farmer said.
“They weren’t interested in a half of a solution, they were interested in ‘how do we solve this going forward?’” he said.
Farmer worries senators will continue to call for more budget cuts before looking for new revenue streams. “The Senate still is likely to say this is a two-part game and we have to finish part one before we can move to part two, and that’s unfortunate,” he said.