BUFFALO — Facing a $530 million school funding deficit, the Wyoming Legislature has been scrambling to avoid massive cuts to education ahead of their winter session. So far, most of the proposals have centered on cutting costs in a way that won’t hurt students and finding new sources of revenue.
But with a recent poll showing most state residents oppose education cuts, and because legislators loathe to raise revenue, one lawmaker has a new idea: divert money intended for a modest education endowment fund and spend the cash on schools.
Right now, mineral royalties from mining on state-owned land are split between the state fund that pays for school construction and what’s called the common school account. Two-thirds of the royalties go into the common school account to create an endowment. Then, the interest from that account is transferred to the main school fund.
But Rep. Timothy Hallinan, R-Gillette, wants to hold off on growing that endowment for the next six years, and send 100 percent of new mineral royalties from state lands to pay directly for education.
Hallinan said that an average of $158 million is paid into the common school account each year, while the account itself pays just 1 to 2 percent of its $3 billion toward actually funding schools. Hallinan’s plan wouldn’t take out any money that’s currently in the fund. But it would divert the $158 million added to the fund each year and direct it toward the main school fund.
“I think this is a good way to address at least $300 million of that … deficit,” Hallinan told his fellow joint interim revenue committee members meeting here Wednesday. “I think it’s the most palatable to the state.”
That’s because it wouldn’t require raising taxes and could help avoid deep cuts to education. Lawmakers are currently in the midst of a full review of the state’s education system and have discussed everything from raising the sales tax to completely overhauling how schools are funded.
There’s been some appetite for diverting dollars and revenue streams. Speaker Steve Harshman, a Casper Republican, proposed a comprehensive approach to addressing the funding crisis. It included the use of savings, conditional tax increases and revenue diversions. Though it passed the House largely intact, it was heavily amended by the Senate before it was ultimately passed at the 11th hour.
Hallinan faces an uphill battle. Because the allocation of state mineral royalties is stipulated in the Wyoming constitution, two-thirds of legislators would be required to vote for the bill, and then members of the public would need to approve the measure in a referendum in 2018.
A pair of constitutional amendments — one to change how school construction is funded and the other to give the Legislature the power to determine what constitutes an adequate education — died in the legislative session earlier this year.
But Hallinan said he thought this measure could succeed.
“I think the people of the state would vote yes if they knew what the options were,” Hallinan said.
If it passes, the constitutional amendment would stand for six years at which point both the Legislature and voters would decide whether or not to continue diverting funds from the common school account or whether to start increasing the endowment once again.
Revenue committee members, who have been tasked by the Legislature’s leaders with coming up with plans to raise revenue by $100 million to $300 million to pay for education, were open to the idea but skeptical about some details.
Committee co-chair Rep. Mike Madden, R-Buffalo, worried that by diverting all state mineral royalties to pay directly for education, the Legislature would stunt the common school account’s growth as an endowment.
Madden said the public might view it as: “You rob it from future generations for your own selfish benefit.”
Sen. Affie Ellis, a Cheyenne Republican who sits on the Senate’s education committee, did not speak in opposition to Hallinan’s plan. But earlier in the meeting, she had expressed concern about raising taxes on the energy industry, noting that the education funding crisis was related to the boom-and-bust nature of the energy industry, and by paying for the current deficit with more energy dollars, the state might be increasing — not decreasing — its reliance on the industry.
But both Madden and Rep. Jerry Obermueller, R-Casper, said it was important that the revenue committee consider ways to raise new revenue as well as redirect existing funds to help pay for education.
“I would like … (to) address the money that’s coming out of these funds,” Obermueller said. “The different coffee cans that are out there.”
Rep. David Northrup, who chairs the House Education Committee but is not on the revenue committee, said Wednesday that he supported the proposal but would want it to last two years instead of six.
He said the idea should be put in front of voters to decide but said it wasn’t an immediate fix, given the vote wouldn’t take place until fall 2018. Still, he said he wasn’t sure the measure would pass because of resistance to diverting the money among lawmakers.
“When somebody gets their hands on money, they tend to think it’s theirs,” he said.
Generally, Northrup expects the House to propose constitutional amendments related to education, but said he didn’t think they would last long in the cut-minded Senate.
Hallinan’s measure will be discussed at a future revenue committee before the Legislature meets in February.