- Associated Press - Wednesday, January 11, 2017

CHEYENNE, Wyo. (AP) - Fixing a looming school-funding shortfall amid a prolonged downturn in energy markets will require difficult choices but Wyoming should have a long-term plan in place by early next year, Gov. Matt Mead told state lawmakers Wednesday in his annual State of the State address.

He called on legislators to keep involving the public in possible solutions to the projected shortfall of $360 million a year after emergency K-12 education funding runs out next year.

“At a minimum, we should be planning for reductions. But there is the broader discussion that we should continue to have about funding and revenue,” Mead told a joint session of the Wyoming House and Senate, which began a two-month legislative session Tuesday.

Mead also asked legislators to develop rules for when and how to tap the state’s more than $1.5 billion emergency-spending account while the state faces enormous shortfalls due to declining revenue from coal, oil and natural gas production.

He previously asked lawmakers for the ability to allocate $140 million from the rainy-day fund for critical state programs if necessary.

“It appears without a diversion that I’ve asked for from all of you, the rainy-day fund will grow this session. It’s a hard message for the people of Wyoming, as we’ve made in excess of $300 million in cuts since last session and we will continue to grow the rainy day fund,” Mead said.

“It goes again to the question, what is that money for, and what are we going to use it for?”

Despite the shortfalls, Mead asked lawmakers for a plan for the Wyoming State Penitentiary in Rawlins, which is suffering severe structural problems after just 15 years in operation. Repairs would cost $80 million, a bill so large officials are considering building a new prison instead.

For years, flush accounts allowed Wyoming to avoid borrowing money to build schools and other facilities. Now, bonding might be the best way to address the prison, the governor said.

“Whether it is a fix or a rebuild, we need to have that addressed this session, including where the funding would come from,” Mead said.

Wyoming’s credit ratings remain top-notch but bonding is a word rarely heard in Wyoming in recent years. The state should consider a return to bonding to pay for school construction and other projects during the downturn, Senate Minority Floor Leader Chris Rothfuss said in a leadership news conference after Mead’s speech.

Up-front payments that mining companies pay for federal coal leases - Wyoming is the top coal-mining state and splits the payments evenly with the federal government - paid for a statewide school-construction boom starting in the early 2000s, he pointed out.

“The last decade-plus has basically been a $2.4 billion tax holiday for the people of Wyoming,” said Rothfuss. “But we need to put $150 million a year for school capital construction to meet major maintenance and replacement needs. We don’t have many options available.”

The bonding idea faces slim chances, at least for now. Republicans outnumber Democrats 51-9 in the Wyoming House and 27-3 in the Wyoming Senate, the highest ratio of Republican dominance of any statehouse in the country. Senate President Eli Bebout expressed deep reservations.

“It just would be my last resort,” he said.

Bebout ruled out any tax increases this legislative session to pay for education.

After a legislative subcommittee in late December recommended several options for education savings and new revenue, lawmakers now look to convene a supercommittee of legislators from both chambers and Mead staffers to tackle the education funding problem over the next year.

The process would include a series of meetings around the state. Already, almost 600 people wrote to comment on the subcommittee’s recommendations. Ideas include consolidating school districts and raising sales and property taxes.

“I’ve read every one of them,” House Speaker Steve Harshman said of the public comments. “Those will not be the last opportunity for public input. That was the start of the beginning.”

Approval of four new water storage projects and $2.5 million for a project to diversify Wyoming’s economy round out Mead’s other priorities in the weeks ahead.


Follow Mead Gruver at https://twitter.com/meadgruver

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