CHEYENNE – Wyoming’s legislative session wrapped up amid unexpected panic over the spread of COVID-19.
And one of the outcomes of the session – the failure to pass House Bill 46, which would have lifted a cap on special education funding – signals a dilemma Wyoming will continue to face long after the virus peaks.
“It’s part of a bigger problem,” said Rep. David Northrup, R-Powell, who chaired the House Education Committee and voted for HB 46, which later died in the Senate. “We’re entering into an unprecedented time in Wyoming where it’s been many decades since we’ve been short on money like we’re projected to be.”
Unlike most states, which get the majority of school funding from local property taxes, the majority of Wyoming’s K-12 funding comes from state mineral taxes. As that industry grows more and more unstable, legislators are looking for ways to slash the budget.
A couple of years ago, special education funding, which supports school services like occupational therapy, was one such target of those austerity measures.
In the past, the state has reimbursed districts for 100% of the costs to provide special education services. But, in 2018, the Legislature approved a three-year spending cap that kept the state’s reimbursements tied to the amount districts spent during the 2017-18 school year.
“There are a number of districts who spent more in special education expenditures than we could reimburse,” said Trent Carroll, chief operations officer for the Wyoming Department of Education, which supported removing the cap early. “We’ve heard concerns from many school districts related to special education funding.”
That’s largely because even though the Legislative Service Office estimates inflation raises special education costs by 1% to 4% each year, the cap leaves school districts on the hook to make up the difference.
“It was a way to implement budget cuts by avoiding increased special education costs,” said Jed Cicarelli, finance director for Laramie County School District 1.
Cicarelli estimates that the district, which is Wyoming’s largest, spends between $32 million and $33 million a year to serve the approximately 1,869 students who qualify for special education services.
Total expenses can fluctuate drastically from year to year based on districts’ ever-evolving student needs.
“The first year under the cap, we actually came under the limit for our district and didn’t receive a reduction in our revenue,” Cicarelli said. “However, three years in, costs have changed significantly. At this point in time, we’re expecting $1.5 million in deficits.”
Another attempt at finding more money to pay for special education services – House Bill 119 – is awaiting Gov. Mark Gordon’s signature.
If enacted into law, the legislation will allow Wyoming to join the other 49 states in tapping federal Medicaid money to match half of its special education costs. If the federal government approved the changes to the state’s Medicaid plan, the plan would take effect in fiscal year 2021.
Earlier this year, LCSD1 said it would be interested in piloting the Medicaid program. But with the funding cap still in place, “it’s unclear” if it’ll be able to pay for the added administrative costs.
“We are not experts, so there would be costs that we’d incur in order to start up the program,” Cicarelli said. “It’s important that we try to be a part of the solution and assist in leveraging additional funds for the state. But we’re not going to do that by diverting funds from other programs within our district.”
For Cicarelli, who previously worked for the state Department of Education, both the spending cap and Medicaid funding are part of this bigger question confronting the state: “What will the examination of special education funding look like during recalibration work?”
During the recent legislative session, lawmakers also passed a framework for recalibrating Wyoming’s K-12 finance model, which is legally required every five years.
Brian Farmer, executive director of the Wyoming School Boards Association, said he thinks a $6.2 million amendment is what ultimately kept the special education spending cap in place this year.
But he anticipates that with the cap already set to expire next year, the issue “will become part of the discussion of recalibration,” which will take place between now and the 2021 legislative session.
“I think people are realizing that this is not a place to really mess around much in terms of education funding,” Farmer said. “Federal law doesn’t allow you to skimp when it comes to providing special education services.”
Northrup, who chairs the House Education Committee, described the upcoming challenge of recalibration more bluntly: “At some point, we have to decide not to fund education at the level it is or raise taxes.”