Wyoming’s House of Representatives saved the state’s public schools this year by blocking Senate proposals to slash school funding, according to Speaker of the House Steve Harshman. But just like last year, education advocates watched a roller-coaster legislative session end with a cut to their budgets and no clear long-term funding solution.
“There’s no doubt that the 60 members in this House have single-handedly saved K-12 education in this state,” Harshman (R-Casper) declared in a speech from the House chair March 15.
Senators had at one point proposed legislation that would have cut schools by up to $76.2 million over the next two years, according to the Legislative Service Office. Instead, the House held senators down to a $27-million reduction.
Speaker of the House Steve Harshman. (Andrew Graham/WyoFile)
Harshman’s claims may be bittersweet for education advocates and school district superintendents. While they avoided deeper cuts, they still feel pain from the reductions, particularly in the context of losing $77 million in 2017.
Nevertheless, Harshman said he is optimistic that the House plan to make use of Wyoming’s large trust funds represent progress. For two years, debate over education funding has been dominated by demands for cuts paired with refusals to raise taxes to maintain state services.
But this session the House started an “honest conversation … about having $12 billion in permanent trust funds,” Harshman said. In doing so they saved education and did it alone, he said.
The education cut is the only significant reduction to state government funding this session. It was also, several observers said, the last piece in a grand compromise between the House and the Senate that enabled House leadership to guarantee some future school funding through changes to the use of trust funds.
School boards begin processing cuts, again
School districts have little time to process the legislation and tighten their budgets.
“They’ll be passing their budgets in July so it’s now time for them to figure it out,” said Brian Farmer, executive director of the Wyoming School Boards Association. Within a month, Farmer said, school districts will have to begin contract negotiations with staff.
“They’ll do it,” Farmer said. “They’ll figure it out. But it’s going to look different across the state, district to district.”
Brian Farmer, director of the Wyoming School Boards Association. (courtesy photo)
The cuts break down to approximately $8 million statewide in fiscal year 2019, which starts in July, and then another $19.3 million in fiscal 2020, Farmer said.
A retooling of student enrollment calculations and a shift in how much money goes to groundskeeping in certain districts account for the cuts. The Senate also amended the bill to add a cap on state reimbursements for special education funding.
Some school districts will see larger cuts than others. Because it has a lot of school grounds, Laramie School District #1, one of the biggest in the state, will take a $4.9 million cut in the second year of the biennium, Farmer said. It’s a sizable portion of the $19.3 million in statewide cuts for that year.
The district’s superintendent, John Little, told WyoFile on Friday the groundskeeper cut would affect far more than the number of people riding lawnmowers. It could, he said, hurt the hiring of school resource officers — police officers assigned to schools — to protect students.
School districts receive a block grant from the state. Variables such as the appropriate number of groundskeepers help set the amount of the block grant, but once allocated, districts spend the money as they need. Money added to the block grant for one reason can, for example, be used to pay instead for student athletics, lunches for low-income students, or utility costs when the state’s formula falls short, according to testimony from school superintendents throughout the session.
Protesters from Laramie staged a faux funeral for Wyoming’s public education system. “Forgive the Wyoming Legislature that may gut you, public education,” the chief eulogist said. “If they do, they know not what they do.” The mock tombstone at the protester’s feet read: “Here lies Wyoming Education. Withered away through neglect.” The protesters said they did not belong to any organization. (Andrew Graham/WyoFile)
Harshman told House members that school districts spent their money as the funding formula directed around 97 percent of the time. The other three percent of district funds are used to cover costs not met by the Legislature, Harshman said.
In Little’s school district, money allotted for groundskeeping is also used to pay for school resource officers. The Legislature does not provide any funding for resource officers. The district spends around $500,000 on SROs, Little said. A reduction of $4.9 million from their 2020 block grant could hurt that effort, he said, although it’s still unclear where the local school board will choose to take the money from.
“I can tell you our community would not want us to eliminate our school resource officers, even though we’re not funded for that,” Little said.
The cuts came in the same week that students walked out of schools around Wyoming to show solidarity with Florida high school students victimized by a school shooting on Feb. 14 that claimed the lives of 17 people. Students in Little’s district were among those who walked out, according to a report from Wyoming Public Radio.
Officer Manny Fardella, the president of the Wyoming School Resource Officers Association, serves as an SRO at South High School in Cheyenne, part of Little’s district. SROs are funded differently throughout the state, he said. In Cheyenne, the district pays 75 percent of the officers’ salary, and the police department picks up the rest. In other parts of the state the school district pays all of the costs, or the police department does, Fardella said.
Districts have invested time and money training SROs to build relationships with students to prevent crime and school shootings, Fardella said. He hoped the Legislature’s cuts wouldn’t affect that investment, he said.
The Legislature also imposed a cap on the reimbursements districts receive for special education services. The cap takes effect in fiscal year 2020, when funding will be limited to the amount of the previous fiscal year, according to the LSO. Based on the assumption that statewide special education costs will rise by four percent, LSO estimated the cap will represent an $8 million cut.
The cap is statewide, but could affect districts differently depending on number of special education recipients and what level of service they need, educators say. It becomes a cut if a school district sees an increase in demand for nurses, specially trained teachers and other resources, Wyoming Education Association President Kathy Vetter said last week.
School districts have to pay those special education costs under federal law, Little said. So if their costs for special education exceed what they’re reimbursed by the state, such a measure again represents a cut from their block grant.
“Same situation — where do you take [money to cover special education] from?” said Little.
Democrats and budget hawks oppose cut
In the end, the House appeared to accept the $27 million in cuts in order to push through the overall budget compromise. As the House approached a final vote on House Bill 140, which lays out the education cuts, Senate Vice President Michael Von Flatern held up the capital construction bill, Rep. Charles Pelkey (D-Laramie) told reporters Thursday afternoon. With the bill unsigned, senators could vote to reconsider and kill it, likely extending the session further and putting the House leadership’s funding mechanism changes at risk, Pelkey said.
Harshman pushed his chamber to pass the bill. “I’m going to vote for this concurrence, not that I’m happy about it, and it’s certainly not perfect,” he said. With senators waiting in their own chamber down the long hall through the temporary Capitol at the Jonah building, the bill passed 34-22.
On the House floor, debate centered on damage to small districts as many lawmakers pushed back against the speaker’s compromise.
“I’ve also heard from the small schools and this is not fair,” said Rep. Tim Salazar (R-Dubois), referring to changes in how student enrollment will be calculated.
“I truly believe that good public policy is good politics,” Salazar said. “This is not good public policy. This is going to hurt students in these small schools.” Salazar asked lawmakers to consider the merits of the bill and not leadership’s compromise.
The final vote on HB-140 reflected an odd mix with the chamber’s nine Democrats aligning with members of the House’s informal conservative — and normally fiscally hawkish — caucus to oppose the conference committee compromise. The vote came after Harshman called Republican lawmakers into a party caucus. Republican caucuses are closed to the public, allowing a super majority of the House to meet in secret before major votes.
Members of the House leave their regular chambers where audio is recorded, archived and live streamed across the state to enter their break room for a closed-door caucus on March 10. (Andrew Graham)
Despite the $27 million in cuts, Farmer was somewhat optimistic about the session’s conclusion for education. It was the best available outcome, he said.
“I think the fact that it was such a battle in the House … is the House saying ‘look we’re not going to be cutting just to cut,’” Farmer said. “‘If we make more cuts, it’s going to be a deliberate, thoughtful thing.’”
Most senators disagreed, Farmer said. “The conversation down the hall I think is a different conversation,” he said. “They keep saying the situation isn’t going to be solved by cuts alone, but we really haven’t seen any ideas from there.”
From now until the 2019 general session, lawmakers and education advocates will likely continue to focus on education funding, with new topics assigned to legislative committees. Legislative leadership has not settled on those topics, but should do so at an April 19 meeting of the Management Council.
Last year the topic was most prominently pursued through school recalibration, a process where outside consultants evaluated the education funding model and reported back to the Select Committee on School Finance Recalibration. That committee won’t be formed again, Senate President Eli Bebout (R-Riverton) told reporters on March 9.
Regardless of where the Legislature goes next, Farmer warned that school districts were still dealing with the cuts passed last session, and that it is too early to say how the quality of a Wyoming education will be affected in the long term.
“I don’t think we know what the impact to districts is going to be,” Farmer said.
Senator says problem remains unsolved
On the Senate side, the state construction bill HB-194 — a key piece of the compromise between the chambers — nearly failed. Sen. Tara Nethercott (R-Cheyenne) switched her vote from no to aye after the first count was taken, giving the bill the 20 votes needed for passage Five senators, including Bebout, were absent.
If the bill had died, a wide array of construction projects — including state health facilities, community college campuses and the University of Wyoming’s Science Initiative — would not have moved forward this year. An effort pushed by House leaders to guarantee money for school construction and maintenance through investment earnings from trust funds would also have died.
But several senators, frustrated by the lack of cuts on education and general government, spoke against the bill.
Longtime Sen. Charles Scott (R-Casper) told his colleagues the state was staring down an imminent crisis. The state entered the mineral bust in 2014 with $2.1 billion in its chief savings account, known as the “rainy day fund,” Scott said.
The account will be down to $1.3 billion by July 1, the start of fiscal year 2019, according to the latest fiscal profile from the LSO, which incorporates the actions taken in the budget session.
“We could get by the next biennium probably,” Scott said, “and then we will face just a horrendous cliff unless everything goes perfectly right.”
Everything going right included the price of natural gas and oil both going up significantly, and a good stock market that generates a wealth of capital gains on the state’s trust fund, Scott said. Otherwise, he said, the question of tax increases and budget cuts will return with a vengeance.
“If all that doesn’t happen, we get a massive tax hike and a massacre at our state agencies,” he said.
Longtime lawmaker Sen. Charles Scott. (Andrew Graham/WyoFile)
But at least one senator viewed the House’s work to guarantee investment earnings for school construction positively.
Over the last decade, the Legislature has spent hundreds of millions of dollars in coal lease bonus money building new schools around Wyoming. If new buildings are not maintained, that investment is wasted, said Sen. Bill Landen (R-Casper). Coal lease bonus money — which comes from the sale of new coal leases — has largely dried up.
“We did not mark any funds that will take care of [maintenance of] our schools going forward but this will,” said Landen, the chairman of the Select Committee on School Facilities. “This takes care of the major maintenance of 400 buildings out across our state.”
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Scott’s worry about a tax hike and massive spending cuts was a contrast to the optimism on the House side. Citing the guaranteed funding for school construction and maintenance, Harshman said the Legislature had solved a significant portion of the state’s billion dollar structural deficit.
The deficit estimate was flawed anyways, the speaker said. The “billion dollar structural deficit” often cited by lawmakers did not include, for example, $185 million in biennial mineral severance tax revenues that for a decade had been deposited into the state’s inviolate Permanent Mineral Trust Fund. Two years ago, lawmakers diverted that stream of money into the state’s spending accounts, a policy that is continued for the next two years by the budget bill the Legislature just passed. Discounting that money when calculating the structural deficit is disingenuous, Harshman said, because the decision to put it into savings was a policy choice to begin with.
“You can’t just say we’ve got a billion dollar deficit,” Harshman said. “There’s more to this.”
It’s clear that while a compromise had been forged this session to stave off deeper cuts to education, the debate over more cuts will continue so long as different legislators hold widely varying viewpoints of the state’s fiscal situation.
For example, while Scott said reserves could be drawn down in just four years, Harshman argued that the changes made this session would help the “rainy day fund” last for 20.
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