Issue link: https://digital.copcomm.com/i/1297492
The 2021 General Session will convene on January 12th. The legislature will attempt to tackle the $1.5 billion biennium revenue shortfall and the $500 million shortfall for education. There has been widespread and very public recognition amongst legislators and the Governor's office that the state can neither cut nor tax its way out of the current fiscal crisis. Rather, a multifaceted approach will be needed to address the massive revenue shortfalls facing Wyoming. So far, Wyoming has seen a 10% budget cut that's already devastated essential services for vulnerable and at-risk populations of our citizens. The Governor has called on school districts to make voluntary cuts of 10% to district budgets as the state braces for another 20% budget cut in the coming months. Meanwhile, the legislature has taken no steps toward creating new revenue to support Wyoming citizens' essential services. Education has long been in the crosshairs. Given the current fiscal crisis, it is only fair to assume that education funding will once again be the target of deep and long-lasting cuts in the upcoming session. Over 80% of the budget for education in Wyoming is directly allocated to districts for salaries. As personnel accounts for the majority of the education budget, even a 10% cut to education will have substantial impacts on the number of educators, education support professionals, and administrators employed in Wyoming. The Wyoming Education Association has consistently advocated that these potential cuts be made as far away from students as possible. If the state of Wyoming is to continue to provide the high-quality education for which it has been recognized, it is imperative that students continue to be instructed by the high-quality educators and support staff to whom they have become accustomed. What Can be Done? The state of Wyoming has long depended on its extraction industries for substantial portions of the state revenue. Long before the oil price wars and the COVID-19 pandemic, many have urged the state and its governing officials to diversify the state's economy, which would have helped to insulate, to a degree, the state from the level of economic turmoil we're currently facing. There are currently options available to the state legislature and the Governor's office that would help generate revenue now and over the long haul. These increases in revenue streams would allow the state to reevaluate its economic priorities and to collaborate with various stakeholders— including education and our state's community colleges— to develop and implement a plan for economic diversification. First and foremost, the state would need to address and fix its currently regressive tax structure. As it is, Wyoming's tax structure disproportionately impacts low-income and middle- class families. The lowest wage earners in the state, those making less than $26,100 a year, pay the highest percentage of state and local taxes, 9.6%, compared to those who make over $207,400 a year and only pay 6.4% of state-local taxes. The state must first remedy its regressive tax structure and implement a progressive tax structure before economic diversification can prove truly beneficial. This very point was highlighted in a 2016 report by Regional Economic Models, Inc. (REMI). The report illustrates how attempts at diversifying our economy without first addressing the regressive nature of the state's tax structure would only further Wyoming's economic woes as the services and infrastructure used by those new positions would outpace any revenue generated by additional jobs. There are a variety of measures that the Legislative Service Office noted could raise much-needed revenue. One potential solution to our faulty tax structure is a state income tax on those grossing over $200,000 per year. According to a study conducted by Wyoming's Legislative Service Office (LSO), through a variety of tax increases, including a state income tax, Wyoming could generate $272,800,000 in 2022, $818,000,000 in 2023, and a staggering $836,300,000 in 2024. If the state were to implement a corporate tax, this measure could generate over $14 million per year starting in FY 2023. Other additional measures included the proposition of an increase in the state's already established sales and use tax as well as a proposed increase to the fuel tax rate. The proposed increase in sales and use tax at a median rate estimated from surrounding states would generate well over $200 million a year and the potential increase in the fuel tax rate utilizing the same method would generate over $40 million a year, both beginning in 2022. While adopting just one of these measures will not cover the entire shortfall, anything could be a step towards a comprehensive approach that will effectively address the current fiscal crisis. However, the Interim Revenue Committee has yet to move forward on any revenue-generating bills, and the likelihood that they will do so before the session seems very slim. The inability of the Revenue Committee to generate any revenue-generating bills carries with it the potential for severe and dire consequences for Wyoming citizens. Without generating new revenue, services across the state will continue to be cut. The reduction in services will have detrimental consequences for those individuals and families most in need, namely the elderly, disabled, the infirmed, veterans, and children. It is irresponsible of the Revenue Committee to move forward into a general session without generating any potential revenue bills. It's true that individual revenue bills may still be brought forward during the legislative session. However, the informal leadership process in place in the state legislature is that committee bills are heard. In contrast, individual bills are the last to be heard and, in some cases, never see the light of day. Recalibration and the Campbell Cases: A New Hope While the revenue committee has stalled, the impacts of the Governor's first round of cuts are beginning to be felt, UNDERSTANDING THE FUNDING CRISIS FACING EDUCATION By: Tate Mullen 10