NEWS RELEASE
Majority of the Wyoming House of Representatives
Wyoming House Advances Legislation to Address
Education Deficit
House Bill 173 Includes Reductions, Diversion, Federal Funding and Back-Up Half-Penny ‘Insurance Policy’ to Correct Structural Revenue Shortfall
(Cheyenne, WY) — The Wyoming
House of Representatives advanced legislation on Tuesday that takes a full-picture
approach to solving the state’s K-12 Education funding deficit. House Bill 173
would leverage spending reductions, revenue diversions, federal stimulus
funding and a potential half-percent sales tax for education, triggered if
state reserves were to fall below a critical level, to close structural revenue
shortfalls.
The Wyoming Constitution requires
the Legislature to fund an equitable education “adequate to the proper
instruction of all youth in the state.” Declining energy production and prices,
which have also caused property taxes to fall, have reduced state and school
districts’ education revenues. Without legislative action, Wyoming’s schools
will require an annual $331 million transfer from the Legislative Stabilization
Reserve Account (LSRA), the state’s “rainy day” fund, to maintain operations.
“House Bill 173 addresses the
education deficit from every angle. This creates a multi-pronged solution,
because we cannot close the systemic funding problem by cuts or taxes alone,”
said Speaker of the House Eric Barlow (R-HD3).
“The bill was thoroughly debated
and amended to meet our education system’s needs. It was passed by the House
with bipartisan support and an overwhelming majority, because it puts good
policy ahead of politics,” said Majority Floor Leader Albert Sommers (R-HD20).
HB 173 would reduce spending by providing
health benefits only to those enrolled. The current model requires the state to
pay block funding based on a calculated number of educators and administrators,
even though there are fewer employees than the model projects and about a
quarter do not opt-in to benefits. The reduction, which would be phased in over
three years, will reduce K-12 funding by more than $80.5 million cumulatively over
the first three years.
The bill would also redirect
revenue from existing sources, including severance taxes and investment income
from state savings. This use of existing revenue streams will provide up to $70
million annually.
The American Rescue Plan, which
was approved by Congress this month, provides significant funding to the state.
HB 173 would allocate up to $243 million of the ARP funding to K-12 Education
over the next three years, reducing the use of savings in the near term and
providing time for the state’s new and historic revenue drivers to close the
gap. However, the State must be careful
not to reduce funding to education in a manner that jeopardizes these federal
funds. Wyoming must comply with a
maintenance of effort or lose the funding.
Finally, HB 173 includes a
half-penny sales tax that would be directed solely to our schools, which would
be triggered only if the rainy day fund is drawn down to a $650 million
balance. The sales tax, which was amended down from a full percent, provides an
“insurance policy” that the state will be able to appropriately fund education
in the event that the rainy day fund approaches its statutory minimum balance
($500 million), at which time it would no longer be able to backfill revenue
shortfalls.
“The potential sales tax increase
is a necessary measure to ensure that if our revenues do not improve, we will
still be able to provide a high-quality education to our young people. And it
applies only if income from existing revenue streams does not improve enough to
close the gap,” said House Revenue Committee Chairman Steve Harshman (R-HD37).
“Wyoming has the third-lowest sales tax in the country. No one wants to raise
those unnecessarily. This option would only be implemented if necessary to
provide one of the most critical services, education. I think all Wyomingites
generally agree that our kids and our schools are worth half a penny.”
HB 173 was passed by the Wyoming
House of Representatives, 41-19. Thirty-eight amendments were proposed,
including 23 in the third reading. It will now proceed to the Senate for
consideration.
“This bill has been meticulously
vetted and fine-tuned to ensure it creates a sustainable solution to fund our
schools,” said Representative Evan Simpson (R-HD21). “These are difficult
decisions, but it is the right policy to ensure we can provide a good education
for future generations. We look forward to working with our colleagues in the
Senate to get this bill past the finish line.”
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Contact:
Representative Albert Sommers, House Majority Floor Leader
Albert.sommers@wyoleg.gov
