The Revenue Committee, chaired by Representative Daniel Zwontizer and Senator Cale Case, met for a two-day interim topics session on May 26th and 27th. The Revenue Committee is tasked with determining what to do in response to the COVID outbreak and the shortfall of revenue associated with the substantial drop in oil prices, the closure of businesses, and the cancellation of revenue-generating events, including Frontier Days and the state’s six largest rodeos.
Because education makes up a substantial part of the state’s budget, it will be highly susceptible to cuts, as a consequence of revenue shortfalls. As it stands now, the funding that was directed towards education at the end of the 2020 budget session is still appropriated to education.
The danger in terms of education funding lies in the legislature or the Governor’s office enacting funding cuts to the 2020-2021 biennium education budget, and/or the decline in property tax revenue in the 2022-2023 biennium. The revenue from property taxes is collected from the previous year, so the budget for districts is funded in 2020 by the property tax revenue generated and collected from the 2019 tax year. If the economic projections regarding the state of the nation’s economy are correct, those revenues will be in short supply for the 2022-2023 biennium. The other threat to education funding in the state of Wyoming is the potential for cuts to current education funding from the Governor or the state Legislature.
The Governor has asked agencies to examine their budgets for areas that may be redundant, or that would be of low impact if cuts were enacted for those agencies. The Governor has not yet publicly addressed the potential for cuts to education funding, but it must be fairly assumed that there are at least preliminary discussions around this potential.
On the other hand, the Legislature, especially the Senate, has had a propensity to push for cuts to the education budget. This held true for certain members of the Revenue Committee, and proposals of cuts to education were a part of the conversation over the past two days. It is important to note that cuts to other general fund state expenditures would result in the number of potential layoffs as would cuts to education.
The education budget is largely dictated by the number of FTE’s. Almost 80% of educations budget goes towards salary costs for teachers, administrators, and education support professionals. Roughly a third of other general fund state expenditures go towards salaries. It goes to reason that during a potential economic crisis of the magnitude that the U.S. and the state of Wyoming are preparing to face, that ensuring residents maintain their employment would be beneficial for the individual, the school district, students, and the state overall.
The Wyoming Education Association lobbying team has been in contact with members of the Revenue Committee and others in the Senate and House in an attempt to share this narrative.
In terms of revenue, the committee discussed a few options as means to address revenue shortfalls. These options include cuts to expenditures, increases in revenue via taxes, bonding to cover shortfalls, or a mix of all of these. The first day of discussions in the Revenue Committee seemed to demonstrate that members of the committee were aware that new revenue was needed. While it will take time to diversify Wyoming’s economy, one of the mechanisms that could be used to shore up revenues is a variety of taxes, including a state income tax, corporate tax, gas tax, wind tax, food tax, and property tax. However, these ideas were met with the typical resistance to raising taxes in the state on the second day of discussions. A proposition was put forward to look at a graduated property tax increase over a two-year period culminating in a 2% increase.
This measure was not a bill that was to be passed, but merely a proposition that the legislature looks at this type of measure in an attempt to craft a bill for future legislation. This was resoundingly defeated by the majority of the Revenue Committee. The blockade by certain members of the Revenue Committee was not a responsible approach to addressing these issues, and Senator Cale Case was not hesitant to state as much. Case noted, “I wish that coal would come back, but the reality is that it just isn’t.” He alluded to the irresponsibility of the committee’s unwillingness to explore every option during one of the most economic dire times that the state has seen.
What followed is demonstrative of the lack of sound policy ideas in the face of adversity when Senator Bo Biteman put forward his proposition following his swift condemnation of any tax increases. Senator Biteman not only voted against looking at the possibility of property tax increases but then put forward a proposal to cut taxes for oil and gas in the state of Wyoming, while potentially increasing sales tax to offset the revenue loss. These types of policies benefit a select few and not the citizens of this state that have helped drive its economic and education engine for years. This approach is not only the wrong policy approach; it is a dangerous policy approach. While the state is greatly appreciative of the revenue that has been generated from the state’s extraction industries, the reality is that the state must diversify its revenue streams. This can only be accomplished through an increase in taxes and/or bringing new types of business and industry to the state. While currently not a cause for the economic downturn, the state’s reliance on these industries has crippled its ability to prepare for economic downturns effectively and has effectively turned the state’s economy into one of the most volatile economies in the United States.
Slated for the end of the second day of discussions was the issue of Medicaid Expansion. The Wyoming Education Association supports Medicaid Expansion as a policy response to the COVID pandemic. Medicaid expansion is supported by the majority of Wyoming citizens and provides a competitive edge for businesses and schools when attempting to attract and retain high-quality employees. Medicaid expansion bolsters access to health care in rural areas that are quickly losing medical service providers. By expanding access to health care and health insurance decreases the number of sick days taken by employees, educators, and students each year. Healthier students and educators directly correlate to higher student performance. As thousands of Wyoming citizens have already experienced furloughs and layoffs due to the economic downturn, and thousands more are uncertain of their future employment, the reality has become starkly clear; access to insurance and health care should not be tied to a job. The proposal was met with staunch resistance, and the future of Medicaid expansion as a policy response to the outbreak is uncertain at this moment.
The Wyoming Education Association strongly supports comprehensive tax reform and the diversification of Wyoming’s economy. WEA will continue to lobby on behalf of educators and students across the state in the hopes that we can continue the legacy of high-quality education provided by some of the nation’s best. The Wyoming Education Association also recognizes the importance of continued Federal packages to bolster the state’s loss of revenue as well as education budget shortfalls.
Please join WEA in contacting your federal delegation in asking them to move forward with a response geared towards meeting these ends. NEA makes it easy to advocate for stable education funding. Visit nea.org/covidaction to contact lawmakers, today!