Wyoming Liberty Group
Accountability Deficit Drove Construction Blowout
- Revenue shortfall highlights danger of one group paying for the benefits of another.
In its latest meeting, Wyoming’s legislative Revenue Committee discussed how to close the gap between state spending and state revenue for school capital construction. The bonanza funding the building blowout fizzled away, so what to do? Hike taxes to continue spending as usual or look for ways to spend less? As no one on the committee wanted to appear to be in favor of tax hikes, the discussion turned to the only viable option—spending reform. Too bad it took a crisis for legislators to focus on responsible spending.
The state has been blowing cash out the door on a K-12 school building boom. Since 1998, the Wyoming Legislature appropriated more than $2.6 billion for both building and modernizing schools, and nearly $700 million for major maintenance. Local districts chipped in another $85 million for boondoggles such as swimming pools. All together nearly $3.4 billion tax dollars have been appropriated for public school facilities over the past 18 years.
Wow – that’s an average of about $189 million per year for a state with a K-12 population hovering between 84,000 and 94,000, or about $2,100 per child per year. The revenue windfall is now over and remaining taxpayers in Wyoming cannot afford to fund this construction blowout.
Luckily, it seems most current committee members understand how tax hikes could send the rest of the economy into a tailspin. But remember, after the next election the composition of the committee could change and have a quite a different attitude towards your wallet.
Did a tax hike get a toehold? You bet.
Wyoming is the only state in the nation to tax wind farm production. This tax, at $1 per megawatt hour generated $3.8 million last year. But wait! Wind companies get a federal production handout of $23 per megawatt hour. Senator Ogden Driskill proposed a bill to capture part of that subsidy, which seemed to have enthusiastic support. But two wrongs don’t make a right—instead of grabbing at a federal handout, we must fight those just as we fight all tax increases.
The committee quickly discarded other taxing options such as increasing the property tax and imposing an income tax.
So what to do? How about what school districts did before the building blowout?
The main source of school capital construction funding came from school district bonds that were paid for by local mill levies. After some Wyoming Supreme Court cases (the Campbell Cases), school capital construction became a state responsibility. But even today, school districts can still raise revenues through the sale of local bonds.
This is a great way to understand what the people of Wyoming truly value and are willing to pay for. For example, Natrona County voters defeated a $33 million bond that would have paid for a new planetarium and new or remodeled swimming pools at Natrona County, Kelly Walsh and Midwest schools.
As you can imagine, if people have to pay for new schools, pools and jewels in their local districts themselves, they are likely to pay a lot more attention to what the school district is up to.
The committee also found two other options to eliminate the need for tax hikes.
The legislature itself augmented the capacity problem by fixing class size in K-3 to 16 students per classroom. But without enough capacity, 17 out of 48 school districts in the state have a waiver from this rule.
Senator Bill Landon, who is on both the Revenue and Education Committees said with a 20:1 ratio, it “would pretty much wipe out the capacity problem and significantly decrease need for new schools.”
Representative Tom Reeder said they should look at how to deal better with construction. He said government need to look at a standard on schools as a way to save money. Committee members agreed.
If voters don’t pay for the benefits they receive, we are unlikely to hold politicians accountable for spending blowouts. To bring accountability back to school capital construction, the best options for both taxpayers and local communities is to return to local bonding, look for savings in construction and increase class sizes.