Wyoming lawmakers hesitate to increase major school maintenance funding ahead of projected revenue shortfalls

CHEYENNE — In the face of projected revenue shortfalls, some Wyoming lawmakers are hesitant to change the state’s major maintenance formula that would increase funding for school facilities projects.

Sen. Larry Hicks, R-Baggs, voted against a bill draft Wednesday, during the Legislature’s Select Committee on School Facilities meeting in Cheyenne, that changes how the state calculates its major maintenance funding for schools.

The bill, as written, increases the allowable square footage in the formula from 115% to 135%, which would make 18 out of 48 school districts eligible for total coverage. However, this still leaves 1.9 million square feet unfunded, according to Legislative Service Office senior school finance analyst Matthew Willmarth. To fund all 48 school districts, the percentage needs to be raised to 235%, he said.

The bill also increases the replacement cost value multiplier from 2% to 2.5% and comes with a $43.6 million appropriation from the Public School Foundation Program (SFP) account.

The SFP is largely funded through Wyoming’s federal mineral royalties (FMRs). A Consensus Revenue Estimating Group (CREG) report in January projected a decline in FMR distributions to the SFP over the next two bienniums.

The projected $559.1 million in FMR distributions to the SFP for the 2023-24 biennium is expected to decrease by $144.5 million in the 2025-26 biennium, and decrease again by $23.9 million for the 2027-28 biennium.

“When I look at this long-term fiscal profile, when I look at the SFP and the school capital construction this biennium, it’s $2.55 billion,” Hicks said. “We get out to the 27-28 biennium, it’s $2.44 billion. My point being is revenues are going down, not up.”

The Legislature is also still exploring property tax relief for Wyomingites, which is another source of local funding for school districts. Hicks said he didn’t want to lock the state into a new, more expensive major maintenance formula if it’s not certain the funds will be there.

“The reality is, when I look out two bienniums, there’s not enough money to fund this,” Hicks said.

Hicks proposed making the bill a one-time appropriation. The Legislature is scheduled to recalibrate its major maintenance formula in 2025, and the senator recommended visiting this topic afterward.

Sen. Bo Biteman, R-Ranchester, who shared Hicks’ concerns, said the proposed 2.5% multiplier “seems to be the biggest driver of the price tag.”

“Maybe we can find a compromise with the (legislative) body, maybe keep it at 135% and keep it at 2%,” Biteman said. “I do like Sen. Hicks’ idea of not baking this in the long term, because of all the uncertainties we have.”

However, Sen. Chris Rothfuss, D-Laramie, pushed back on these arguments. He recognized that the state’s projected shortfall in revenue is a legitimate concern, but also said this bill is “the most cost-effective path for the Legislature.”

“That’s the reason we’re recommending this,” Rothfuss said. “According to the analysis we’ve done, if we preserve the fleet (of schools), we need fewer replacements in the long run.”

State Construction Department Director Del McOmie said the higher dollar investment would likely result in fewer component project requests in the future. Component-level project funding is used for schools on the brink of shutdown due to major maintenance issues.

McOmie said component project funding requests, which are around $30 million a year, may “ratchet down over time” if major maintenance is fully funded.

“As we take better long-term care of buildings with the higher number of the higher dollars, I would predict we’re going to see less of those bigger projects, component projects, happening,” McOmie said.

Sweetwater County School District 1 facilities director Dan Selleroli said new school buildings require more maintenance funding. Most of the chillers in these new systems have four compressors, he said.

“When you live in Evanston, you live in cooler climates, you don’t even know that two of the four compressors are out until the third one goes down,” Selleroli said. “Now, instead of looking at a $100,000 compressor change, you’re looking at a $300,000 or $400,000 system change. So the system’s complexity really drives the cost.”

The bill draft was forwarded to the Joint Appropriations Committee by the select committee on a 7-2 vote, with nay votes from Hicks and Sen. Troy McKeown, R-Gillette. Rep. Ember Oakley, R-Riverton, was absent from the meeting.

This story was published Oct. 17, 2024.