Committee adds sales tax increase to school funding bill

CHEYENNE — Funding for the state’s K-12 education system took center stage Monday as the House Education Committee continued to work on a school funding recalibration bill and agreed to add a conditional sales tax increase to the proposal.

With the state’s School Foundation Program projected to have a roughly $300 million revenue deficit by the end of the current biennium, K-12 education funding will likely be a major topic of debate during the Legislature’s month-long session, with nearly every lawmaker gathered for proceedings at the Capitol.

House Bill 61, which outlines the components of the state’s K-12 education funding model, has been described as a vehicle to start a conversation about Wyoming’s public school system and how it’s funded. While the bill adopted by the Select Committee on School Finance Recalibration late last year included a $100 million cut to the funding model, as amended Monday, that cut has been reduced to an estimated $22 million.

The House Education Committee ultimately took no vote on the bill during its meeting Monday, instead opting to wait until an upcoming meeting once the bill’s amendments have been added in.

But amendments adopted by the committee signal what the bill will likely look like in its final form. House Majority Leader Albert Sommers, R-Pinedale, introduced an amendment that would increase the statewide sales and use tax from 4 percent to 5 percent once the state’s “rainy-day” fund falls below $650 million. All revenue from that additional 1-percent sales tax would go to the state’s K-12 education fund, to the tune of roughly $164 million a year.

The proposal drew mixed reactions from the nine-member House Education Committee. House Minority Leader Cathy Connolly, D-Laramie, was supportive of the amendment, noting the declines in mineral revenues that have typically supported K-12 education will continue in coming years.

However, others on the committee had concerns about the K-12 funding process, arguing it wouldn’t be fair to institute a tax increase with money still being set aside for the state’s Legislative Stabilization Reserve Account, or “rainy-day” fund. While much of that set-aside money is eventually used to fund K-12 education, state Rep. Jerry Obermueller, R-Casper, said the distribution seemed backward to him.

“We need to prioritize education above savings, and when you save first and then pull out of that, it sends this message that we're more interested in saving money than we are funding opportunities for students, so I just do not like the way the structure works on this,” Obermueller said. “I'm not necessarily against the tax, if it comes to that, that we need to have a one-cent sales tax that goes to education. But we need to explore the power of our trust fund to fund education first and fund it directly.”

The sales tax amendment was ultimately adopted by a 5-4 vote, with Connolly, Sommers and a trio of other representatives, including committee chair Rep. Jerry Paxton, R-Encampment, voting in favor.

Obermueller also brought an amendment that would eliminate all cuts to the model proposed under the bill, arguing state lawmakers should continue to grapple with Wyoming’s finances before deciding on reductions to the K-12 education system.

“Ethically, it's impossible for me to vote for cuts knowing we're promoting savings,” Obermueller said.

While many on the committee were understanding of the proposal, the majority did not support it. Sommers, who chaired the Select Committee on School Finance Recalibration last year, said it was incumbent on lawmakers to “engage some efficiencies” while also seeking new revenue streams.

“I’ve never supported cuts to education, but … we have to face the bear that’s in the room, or the elephant or whatever it is,” Sommers said. “He can be in the room for a while before he tears us up, but ... we’ve got to start solving this, and we’re going to have to have these hard conversations.”

Lawmakers also approved a slew of bill amendments, including one that incorporates school nurses into the funding model, during the meeting Monday. Sommers estimated the amended bill brings the total level of cuts to $22 million, down from the across-the-board $100 million cut approved during the interim session, though those figures could vary slightly.

After being tabled at the meeting Monday, House Bill 61 could be voted on by the House Education Committee as soon as later this week.