Update from Representative Albert Sommers
House District 20 news
November 2, 2014
K-12 Wyoming Funding
I serve as a member of the Joint Education Committee (JEC) of the State Legislature, and we met on October 23 in Casper. The primary purpose of this meeting was to receive a report, "Monitoring the Cost-Basis of the K-12 Wyoming Funding Model," and then to provide a recommendation to the Joint Appropriations Committee (JAC) on whether the funding model of K12 education needs an External Cost Adjustment (ECA).
The funding model is designed to provide equitable and appropriate funding for K12 education in Wyoming. The funding model is equalized across the state utilizing the Regional Cost Adjustment (RCA), which is intended to ensure the costs in Pinedale or Big Piney are equalized to those in Casper or any other school district in the state of Wyoming.
The ECA was designed to account for inflationary pressures at a national and state level. Every 5 years the funding model is recalibrated to account for new information, and during 2010’s recalibration the ECA was crafted utilizing four inflationary indices to account for Professional Labor, Non-Professional Labor, Energy, and Materials.
The select committee in charge of the recalibration effort in 2010 eliminated an automatic yearly ECA in favor of a more rigorous methodology which evaluates regional and state pressures on teacher salaries, as well as the above indices. Prior to the 2010 recalibration, a single index was applied to the model annually to account for inflation.
The 2014 session was the first time since 2010 that the legislature has provided an inflationary adjustment to the funding model, and it was less than JEC recommended. Last year the JEC, with my support, recommended an increased ECA adjustment to JAC for the entire two years of the budget. JAC made the correct decision during last year’s interim work on the budget and applied the ECA for one year only, because the indices should be recalculated annually. However, during last year’s budget session the ECA increase was split over a two-year period, basically halving the ECA, though a teacher onetime bonus was added to the mix.
Many school districts, having seen an erosion of funding through inflationary pressures, have begun to cut programs and staff. Small districts are particularly hard hit, because they don’t have the money to move between programs like larger districts. A coalition of school districts, including Sublette #1, organized to advocate for a more permanent solution to the ECA issue.
At this last JEC meeting, the coalition came to present its case, and Sublette School District #1 Superintendent Jay Harnack was one of the presenters. I believe the districts made a good case for an inflationary adjustment for the 2015/2016 school year, and made a case for the ECA methodology to be revisited in the 2015 recalibration, which will occur during 2015 interim work. The districts believe in utilizing Wyoming based indices to calculate an ECA, but they believe that ECA should be applied every year. Theoretically, an ECA could be a negative number in an economic downturn, and the coalition accepted that concept.
At the October 23 meeting the JEC passed the following motion, which I supported;
"The Joint Education Committee recommends to maintain and reiterate our October 2013 recommendation for an external cost adjustment to account for inflation and ensure that purchasing power is not degraded from school year 2013-14 levels for the 2015-2016 biennium. LSO staff shall calculate the appropriate ECA levels for each category of the funding model such that school year 2015-16 has an equivalent purchasing power to school year 2013-14. Further, the Joint Education Committee recommends removing the second half of the $12.0 million one-time bonus for school year 2015-16."
This motion provides $21 million more for an ECA than the Legislature passed last session, but does not guarantee the $6 million teacher bonus. Remember, one of the four indices of the ECA is the Professional Labor Index, which is teachers and administrators. Teacher salary adjustments, between recalibrations, are designed in the model to occur through the ECA. The ECA increase would be provided as part of the districts’ block grant, and it will be up to individual school boards whether to pass that teacher bonus. If all districts were to provide the 1% teacher bonus, they would still share an additional $15 million for programs. It will now be up to the Joint Appropriations Committee to make a recommendation to the entire Legislature on the ECA issue.
Uranium, Solid Waste, Family Trusts, Business Incubators
On October 9 and 10, I attended the Joint Minerals, Business and Economic Development Interim Committee meeting in Laramie.
The first day, we revisited a discussion we have been having with the uranium industry for more than a year. Industry would like the state of Wyoming to authorize the governor to begin negotiations with the Nuclear Regulatory Commission to seek an agreement for the state to assume regulation of source materials from uranium mining and milling and the wastes associated with the recovery, mining and milling of those source materials. Currently industry goes through a dual permitting process, through both the state of Wyoming and the federal government, and the federal permitting process has become extremely slow and costly. The Nuclear Regulatory Commission allows states to apply for agreement state status, which basically allows states to act as the regulators of uranium mining, but under strict oversight. This would require the state to increase the staff of the Wyoming Department of Environmental Quality by 10 FTE (full time equivalents), and cost approximately $1.6 million annually. The industry has agreed to pay for this program through a fee structure. I have tentatively supported this proposed legislation because I believe Wyoming will have to assume more responsibilities to ensure our citizens and industries have timely access to resources, primarily because Washington has become increasingly dysfunctional. However, I do believe industry should fully fund this program, including the startup costs, and Wyoming Department of Environmental Quality should hire sufficient staff to ensure proper environmental oversight of this industry. This is potentially a win-win for Wyoming.
We considered four draft bills dealing with solid waste issues. Remember, the state has been creating a solid waste remediation program to deal with leaking solid waste facilities. These drafts are a fine tuning of that program. One of the bills would move money from the leaking underground fuel tank remediation program, which is paid for with federal fuel tax dollars, and put it to use in the landfill remediation program after the last of the leaking fuel tanks are fixed.
We heard updates on the plugging and reclamation of orphaned CBM wells in eastern Wyoming, and there appears to be good progress with that program. Well setbacks and flaring issues were discussed, and the Oil and Gas Commission is considering new regulations in this arena.
The Governor’s office provided an update on a legislative mandate in the Budget Bill from last session that required the Governor’s office to prepare a report on Wyoming value added energy, which would include the investigation of an industrial plan similar to the large scale industrial park in Alberta, Canada. This facility takes raw natural resources and converts them to more refined products with added value.
Albert Forkner, director of the Wyoming Banking Commission, presented a draft bill to the committee which would create the Wyoming Chartered Family Trust Company Act. These trust companies are utilized by the super-rich (we were told billionaires) to help manage their large estates. Wyoming has an attractive tax structure, and Wyoming estate planners would like to have this tool for their clients, and possibly attract additional clients from outside of Wyoming. Currently, a virtually unregulated type of family trust company can be created in Wyoming, which could put Wyoming at risk of exposure if one of these trusts were to go bankrupt. I do not understand the full extent of that exposure, but I will by the time I vote. I still have not decided whether I support these entities. Are these chartered family trust companies good for Wyoming? I have not decided, and I will be seeking advice from those more informed than me on this issue. I was placed on a subcommittee to look into this issue.
On the second day we heard from the University of Wyoming on business incubators and the Entrepreneurship Initiative in the College of Business. I did not realize how much UW is doing to support development of new businesses. We heard updates on coal-to-diesel and used-tire-to-fuel projects, and these are value-added enterprises which would be good for Wyoming. They also would be symbiotic, in that the fuels created by these two projects, when combined, would pass muster for the all-purpose fuel that the Department of Defense utilizes. Finally, we heard from the Wyoming Business Council on the need to change the interest rate in the Challenge Loan Program to make it more competitive.
This is a very quick rundown of what was a long, challenging two days of meeting.
For more information contact me at albert@albertsommers.com.
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