Eleventh-hour negotiations on two key bills fall short

Negotiators failed to complete two key bills on Saturday night, meaning lawmakers will return to Cheyenne on Wednesday to seal compromises on education cuts and state construction.

Final versions of two pieces of legislation — including House Bill 194, which decides what state construction projects advance and House Bill 140, which cuts education spending — still have to be voted on and sent to Gov. Matt Mead.

Both bills are part of a grand compromise that also included the successfully-passed budget bill, key lawmakers say. As such, resolution could be relatively easy when lawmakers return this week. But contentious negotiations late into Saturday night showed that agreement between the two chamber leaders — Speaker of the House Steve Harshman and Senate President Eli Bebout — is tenuous.

Harshman told reporters Friday morning the bills would be handled in a predetermined order — once the budget bill was resolved, the construction bill would go next, then education cuts.

House Bill 140 cuts an estimated $27 million from education. The Senate amended the bill to add a cap on state reimbursements for special education funding. The cap represents an additional $8 million cut, but will not take effect until fiscal year 2020, according to the Legislative Service Office.

The Senate also amended the bill to strip out a reshuffling of revenue pushed by Harshman. Putting all those changes in a bill on education could run afoul of Wyoming’s Constitution and its rules on a bill’s content aligning with its title, said both Senate Education Committee Chairman Hank Coe (R-Cody) and Sen. Affie Ellis (R-Cheyenne). Harshman’s revenue diversions remain in the budget, as part of a complicated compromise that will put them into place only for the 2019 fiscal year.

Meanwhile, House Bill 140 has become Harshman’s insurance card. Senate leaders wanted deeper education cuts, but efforts to enact them through either a separate bill or through the Senate’s version of the budget have failed. With those efforts dead, HB-140 represents the last opportunity for any new education cuts. If either side balks, the bill dies and education funding will remain at the levels set last year. It’s a position preferable to House leaders, not to senators who say education is overfunded.

Each chamber’s stance became clear on Saturday as Bebout and two of his top lieutenants — Senate Vice President Michael Von Flatern (R-Gillette) and Senate Majority Leader Drew Perkins (R-Casper) — negotiated with House members of a conference committee on the state construction bill.

Coming after a vote on the budget bill, where several senators expressed dissatisfaction with the lack of cuts in state spending, particularly to education, Bebout told the House negotiators the Senate was not interested in spending much money on state construction projects. Nor was the Senate interested in a Harshman-backed proposal to guarantee investment earnings from the Permanent Mineral Trust Fund for expenditure on state construction.

“Given what’s going on, we’re not interested in that,” Bebout told Rep. Bob Nicholas (R-Cheyenne), the House Appropriations Committee chairman who served as  chairman of the conference committee on the construction bill.

“What will happen, is if [the investment earnings guarantee] doesn’t go here, it will go in House Bill 140,” Nicholas responded. “And in order to get the cuts to education that you want … we’re agreeable to all the cuts that are in House Bill 140 for education and the good Speaker will be the first to get up to vote for it to make those cuts.”

But not without guaranteeing the investment earnings. That’s a “deal breaker,” Nicholas said.     

The guarantee was included in the committee’s final compromise on the state construction bill. Though the conference committee agreed to the deal, it did not do so until 10 p.m. on Saturday night. It was not enough time for LSO attorneys to prepare a new draft of the bill spelling out all the details before midnight so that both chambers could vote on it. The Wyoming Constitution prevents the Legislature from working on Sundays.

The two chambers will have to vote on the compromise this week.

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Though steeper cuts were avoided, the public schools will not easily absorb HB-140’s reductions if it passes, said Wyoming Education Association President Kathy Vetter on Monday. The bill makes cuts by retooling how student enrollment is calculated and how much money goes to school groundskeeping in certain districts. Vetter pushed back on assurances made by Harshman that the cuts will not affect what goes on in the state’s classrooms.

“It’s still very disturbing because we’ve been taking cuts year after year,” Vetter said. During the 2017 general session, the education funding model was cut by around $77 million. “Every time you do cuts now, it’s affecting staffing and programming for students,” she said.

Some of those cuts have yet to be implemented, Vetter said.

Education funding critics say that as a percentage of total budgets, education has taken a much lower cut than state agencies.

“Anything going forward on the agencies is going to be god-dang painful,” Sen. Bill Landen (R-Casper) said on the Senate floor Saturday. He charged that senators were unable to bring the education community to the table to consider more cuts.

But Vetter said lawmakers need to do more than argue over how many cuts are the right number. Efforts to raise new revenue all failed in the House this session. Even with the revenue diversions pushed by Harshman, Vetter worries that when the Legislature returns next year, cuts will again be the only option put on the table to address a structural deficit for funding education.

“I worry the conversation hasn’t changed. We haven’t taken a true look at our fiscal needs in our state. We give lip service to diversifying our economy and our funding structure,” she said, but have not made changes the WEA believes necessary to ensure that the state’s children get the quality of education required by the Wyoming Constitution.

Construction negotiations dragged on behind closed doors

A Saturday conclusion on state construction and education funding appeared likely after a compromise was reached on the state’s budget earlier in the day. But the hours ticked away Saturday as House and Senate leaders again disagreed, this time over how much money the state should put into building projects.

The conference committee on HB-194, the construction bill, first met at 3:30 p.m. Bebout told House members then that given the lack of significant reductions to state spending in the budget bill, senators were reluctant to pay for any state construction projects other than repairing roads impacted by coal mining and limited state projects like renovations at two state health facilities.

“Those are the only things we’re interested in,” Bebout said.

“Well then we don’t need to meet,” Nicholas responded.

“OK. We’re done,” Bebout said.

The Senate’s demands would have halted projects like the UW Science Initiative and construction of new dormitories at several community colleges. The first meeting ended at that point and the lawmakers quickly left the meeting room.

At 5:30 p.m., the two chambers took a two-hour recess. The conference committee was scheduled to try for a compromise again at 8:30. But at that time, only Perkins and Von Flatern showed up at the committee room. While reporters and those lobbyists whose interests remained unresolved waited and wondered, negotiations moved behind closed doors. On the chamber floors, those lawmakers not involved in the negotiations milled and chatted, waiting to vote.

At or before 9 p.m., the governor was meeting with Harshman in the speaker’s office, on the House side of the Jonah building, the state’s temporary Capitol.

Sometime after 9:20, Bebout entered the speaker’s office.

Bebout emerged from the meeting at 9:45 p.m. Five minutes later, the LSO’s chief fiscal officer, Don Richards, entered the speaker’s office. At around 9:53, Bebout returned.

Just before 10 p.m., Mead left the speaker’s office.  

Bebout left the office as well. “Hey, we signed up for public service,” he joked with the lobbyists and reporters gathered outside the House office.

The second meeting of the conference committee on HB-194 occurred just after 10 p.m. It was brief, and the Senate agreed to many of the House positions. The community college dormitory loans were approved. The House conceded to Senate demands that it accept $85 million of the $100 million previously appropriated for the UW Science Initiative.

At around 10:20, LSO Director Matt Obrecht told Bebout that the lawmakers needed to agree quickly if their attorneys were going to have time to draft the legislation by midnight.

“Well let’s do it,” Bebout said. He interrupted the negotiating and got Nicholas’ attention.

“Mr. Chairman, let’s get this wrapped up,” Bebout said.

But it was too late for the LSO attorneys. They were not able to draft a new bill in time for lawmakers to vote on it by midnight given the number of changes made in the course of compromising, Richards said.

The decision was made to adjourn the House until Wednesday, and the Senate until Thursday. Upon their return, lawmakers will have to vote whether or not to agree with the construction bill compromise.

The House will then vote whether or not to concur with the Senate’s elimination of revenue diversions and addition of a special education funding cap in HB-140. If House members choose not to concur, that bill will go to conference committee as well.