Panel Approves Changing Counties’ Role in Allocating School Money (WY)

December 20, 2010

Lawmakers approved a bill Friday that would change how money is collected from counties and distributed to school districts.

Currently, county treasurers collect and distribute local tax revenue to all school districts within the county. The bill would require county treasurers to send that local tax money to the state for distribution to the school districts.

The bill would end the process of "recapture and entitlement." Recapture districts collect more revenue from a special property tax for education than they’re entitled to receive under state law and pay that excess to the state for redistribution to other districts. Entitlement districts collect less revenue than the guaranteed state funding, and the state pays the difference.

Members of the Legislature’s Select Committee on School Finance Recalibration approved the bill 7-5 during their last meeting Friday in Casper. Wyoming’s 48 school districts receive funding from the state in a "block grant," a sum calculated by cost of resources per student multiplied by student population. The Legislature must re-evaluate or "recalibrate" the funding model every five years, a mandate from the Wyoming Supreme Court intended to adequately fund education for all Wyoming students.<br /&gt ;

When facing a shortfall, districts borrow from the state school land fund and pay interest. Several districts borrowed funds last year while others collected interest on their allocations. Money paid for interest should be spent on education, said Rep. Steve Harshman, R-Casper.

"We’re looking at $12.6 million in interest payments this year, and I’m thinking that’s one elementary school," Harshman said.

The bill would take the state one step further toward equitable funding, said Sen. Phil Nicholas, R-Laramie.

"This is one of the last vestiges that sits out there where you have some districts that benefit because of their wealth," Nicholas said. "And sometimes that wealth comes as a burden because of the way the money comes and they have to manage their funds."

Opponents of the bill said the shift would hurt local banks that often hold excess revenue before it goes to the state. Local communities lose opportunities if the money moves to Cheyenne, said Dave Johnson, executive director of the Wyoming Bankers Association.

"Taking that away from local communities limits things banks can do for people who are working, for businesses who are engaged in local communities," Johnson said.

The state has money, so to take money away from local banks to save "a few dollars in interest" is not worth it, said Sen. Michael Von Flatern, R-Gillette.

"Inequalities will always exist in some manner in K-12 education somewhere for somebody, and there’s no way this group or this Legislature will take out all inequality," Von Flatern said.

Next, the Joint Appropriations Committee will work on the bill’s language.

The bill is the latest in a long history of battles over inequality in education funding due to some counties collecting more taxes. In 2006 voters said all income should be redistributed among all districts. The Wyoming Supreme Court then upheld wealthy districts’ right to increased revenues. A bill that would have consolidated all revenues in one account failed in 2007.