NEWS RELEASE
Majority of the Wyoming House of Representatives
Majority of the Wyoming House of Representatives
Structural Deficits Present a Challenging Outlook for Wyoming’s K-12 Education Funding
Falling Mineral, Energy Production and Prices Have Created Unsustainable Revenue Shortfalls that Will Require Increased Revenue, Spending Reductions or a Combination to Solve
(Cheyenne, WY) – Wyoming’s K-12
Education (School Foundation Program (SFP) and School Capital Construction
Account (SCCA)) are facing a $300 million annual structural deficit. This
shortfall owes to rapidly declining coal and natural gas production and prices,
which have reduced the State’s funding sources and diminished school district
property tax collections.
Wyoming funds its schools like most
states—with property taxes. Wyoming is blessed in that minerals pay 50% of our
property taxes, allowing Wyoming residents, old and new, to enjoy the fifth-lowest
property taxes in the country.
Local school property taxes from
minerals have declined dramatically. Our state’s mineral severance tax and
Federal Mineral Royalties have dropped to the lowest levels in decades, and Wyoming
has lost over 200 million tons of coal production per year in the last few
years. That is a 50% drop. The result is a one-two punch making it difficult
for the Legislature to fulfill our Constitutional duty to fund an “equitable”
public education for Wyoming’s children. This is a double whammy, as our school
funding is the most mineral-dependent service of our state government.
Without further legislative action,
our schools will use $331 million of the Legislative Stabilization Reserve
Account (LSRA), the state’s “rainy day” fund in next school year and the coming
years.
K-12 Education Budget
Size
Wyoming’s K-12 Education budget
obligations are virtually equal to its General Fund obligations. In FY 2021,
General Fund appropriations were approximately $1.312 billion, compared to $1.534
billion for K-12 Education (including operations; excluding capital
construction).
School funding is provided by
local school districts and then the State. As property taxes have declined because
of falling mineral and energy values, a greater share of K-12 funding has been
shifted onto the State. But State revenues to meet those responsibilities are also
falling.
To close the gap, the State
must either create new revenues (taxes), redirect current funding streams, reduce
spending (cuts) or a combination of these. Moderation in all these areas
can produce a long-term permanent solution.
The Legislature is required by law to
meet every five years and review the State’s K-12 education funding to ensure
it remains adequate and equitable, or put more simply, that it is
constitutional. This process is called Recalibration and it requires the
Legislature to examine education funding based upon current information.
This Legislative recalibration process
started in 1995 and has continued to the present. The most recent study, which
was completed this past year, resulted in a funding model recommendation that is
$19 million more than our current legislative model, which is relatively close
to what the Legislature is currently funding.
The House of Representatives is once again
proposing a balanced approach that is important to Wyoming’s future. We propose
to reduce spending, shift revenue streams and spend down our savings. We are confident
that rebounding oil prices will support this approach. We also have proposed a
contingent increase in the sales tax—“a penny for education.” This is the last
resort and would only be instituted if the other three options can’t meet this
challenge and our savings reach minimum balances.
Every problem has a solution. We think
it is important to solve problems and that now is the time to do so, rather
than putting off the structural challenges to our education system any longer.
The Legislature has its eye on the horizon and on our state’s future, our
youngest citizens, our school children.
# # #
Contacts:
Representative Steve Harshman, Chairman of the House Revenue Committee
Steve.harshman@wyoleg.gov
Representative Jerry Paxton, Chairman of the House Education Committee
Jerry.paxton@wyoleg.gov
Representative Steve Harshman, Chairman of the House Revenue Committee
Steve.harshman@wyoleg.gov
Representative Jerry Paxton, Chairman of the House Education Committee
Jerry.paxton@wyoleg.gov
