CHEYENNE - Five of Wyoming's wealthiest school districts are refusing to comply with a constitutional mandate to relinquish millions of excess property tax dollars to the state.

The districts in Campbell, Fremont, Lincoln and Sublette counties insist that the money is legally theirs, and they've asked for a formal dispute resolution hearing with the Department of Education, which the department says it will honor.

Superintendent of Public Instruction Jim McBride Monday chided the districts for snubbing the voter-approved constitutional amendment, and for withholding the more than $44 million while the dispute is being resolved.

"The districts have a right to contest the constitution, but they should not withhold funds from the school foundation program while the issue is decided," McBride said in a written statement to the news media.

Lawyers for the school districts argue that constitutional Amendment B, which voters adopted last November in an attempt to level the school funding playing ground, cannot be enforced because lawmakers failed to set a date for it to take effect.

They also argue that the amendment essentially forces a change in the school funding model in the middle of the fiscal year, which they said is illegal.

The school funding cycle runs from July 1 to June 30, but the Department of Education concluded that schools were to begin turning over excess tax revenue shortly after voters ratified Amendment B.

"The law is that a government entity has the right to govern itself, and you can't come in and change the game," said Vern McAdams, director of business and finance for Sublette County School District 1 in Pinedale. "When we adopted our budget the third week in July (2006), there was no amendment."

McBride, in his statement, said the districts are not only contesting the voter-approved amendment, but also "withholding funds rightfully due the students of this state."

McBride said he is fearful that the districts will spend the money, thereby "leaving Wyoming school children without access to more than $44 million as designated by the voters."

Under Amendment B, the money is earmarked for the state's school foundation program, a fund used to collect revenue for the public school system. There is no guarantee that the money will be used to benefit students in poorer districts.

Flush with cash

School districts in the state's energy-rich regions have benefited tremendously from property taxes paid by energy companies.

The result has been massive spending increases, most notably in the Sublette County districts, where a new $17 million aquatic center and $7 million middle school renovation are under way in Pinedale.

So flush with cash was the Pinedale school district last year that it earmarked $1 million for grants to less fortunate schools and bought its students laptops. Some schools outside the boom areas, meanwhile, had to rely on help from state education accounts to cover expenses.

Seeking to end the funding inequality, Wyoming voters approved Amendment B, which requiring districts to hand over property tax revenue in excess of the average for a school based on the state funding model.

Sublette County was by far to be the biggest loser under Amendment B. District 1 has received $22.63 million so far in this fiscal year above the allowable level, and Sublette County School District 9 in Big Piney $10.43 million, according to estimates by the state Department of Education.

The other districts with excess funds range from Campbell County School District 1 in Gillette, with $9.56 million, to Carbon County School District 1 in Rawlins, with about $40,000.

The only district to comply with Amendment B was the Rawlins district, and it did so grudgingly, said School Board Chairwoman Kristi Groshart.

Groshart said her district paid the $40,000 because it didn't want to join a potentially protracted legal battle over such a small sum.

But she said the money would have greatly helped the district cope with rapid expansion and overwhelming demand caused by an infusion of students linked to the boom in Carbon County.

"We are getting an increase valuation because of the mineral industry, but we also have increased needs," Groshart said. "We have children that arrive at the beginning of the school year, and we have no place to put them."

The remaining districts are handling the disputed funds in different ways.

Campbell County School District 1 has created an account for the roughly $9.56 million the state says it owes. The money will remain in the bank until the matter is settled, said Don Dihle, the district's supervisor of information systems and fiscal services.

Sublette County School District 1 has already spent its $22.63 million on the aquatic center, middle school expansion and other projects.

"My board wanted to move ahead with this stuff, and keep going with this stuff. It was in the budget, and we planned for it," McAdams said.

'Irritated'

Sen. Hank Coe, R-Cody, chairman of the Senate Education Committee, sponsored the resolution that put Amendment B on the ballot in 2006, and said Monday that he is "irritated" by the unwillingness of the five districts to share the money.

"The people have spoken. They voted to change the constitution, to equalize funding for opportunity for all the kids in the state, not just Pinedale and Gillette and a few others that want to have more money," Coe said. "I'm very, very irritated by it all, and I think that Superintendent McBride is very right on with this."

Rep. Del McOmie, R-Lander, chairman of the House Education Committee, said he believes the case will end up in court.

He also said it was unwise for the Pinedale district to spend the disputed funds.

"It's kind of like these disputed claims on the valuation of minerals," he said. "If somebody starts to dispute it and take it to court, you better not include it in your budget."

School districts outside the state's mineral boom areas also will be watching the case with interest, even though they can't count on receiving the disputed funds.

Bill Templar, business manager for Platte County School District 1 in Wheatland, Chugwater and Glendo, said all districts should be treated the same.

"I think if you are going to have an equitable system for the whole state, then I think their resources should be basically on the same level as all the rest of the districts," Templar said.

Reach capital bureau reporter Jared Miller at (307) 632-1244 or at jared.miller@casperstartribune.net.