Tue 23 Feb 2010
School Construction & the State Employee Retirement Fund
Posted by Geoff O'Gara under Legislature
A question, Wyoming: have you put up a new school in your town recently? Chances are you have – the education building binge has been revving in high gear for years now, and many school districts have some nice new bricks and mortar. Whether they’ve produced smarter, better-prepared students is a matter of heated debate.
The building spree was driven by the Wyoming Supreme Court’s dictates to equalize education statewide – that apparently means everyone gets a new basketball court. And it has been funded largely by the huge severance tax revenues collected during the state’s decade-long energy boom.
But last night, as the Senate began work on the massive biennium budget bill, Sens. Phil Nicholas (R-Laramie) and Mike Massie (D-Laramie) posed some difficult questions about what it means if we continue. Nicholas, presenting a budget that would cut four elementary school building projects off a still lengthy building priority list, explained the complex way that the state prioritizes and phases such school construction – and what it can lead to. For instance, Natrona County high school projects that take a $14 million bite out of this budget are only phase 1 of three phases – each of which will have substantial price tags (and there’s talk of building a new $40 million high school in Casper down the road). There are planning funds for an alternative high school in Gillette, an elementary school in Lander, two elementary schools in Cheyenne…with, one would think, expensive building to follow. And much more.
More daunting, though, was the issue Sen. Massie brought up: though school construction comes out of a School Capital Construction Account, that money is interlaced with the School Foundation Program Account – which pays for education itself. And as Massie told his colleagues: if we spend and spend every dollar we can on school construction, “we may not have any dollars to put inside the buildings.”
Recalibration is the rather quiet gorilla in the room. Next year, the state will begin ‘recalibrating’ the model that delivers education services to students. The complex formula (developed by outside consultants – there’s $1.5 million in this budget for them) determines how much the state will invest in each student, factoring elements like the size of classes, teacher salaries, what goes into the educational ‘basket of goods’, and more. In recent years, that investment has rapidly risen. (Test scores haven’t - but that’s another story.)
If the massive investment in new schools is eating away funds that might go toward actual education services, as Massie suggested, and if the “stand-alone” phases of school construction in fact suggest much bigger obligations down the road, there may be trouble ahead.
The exhausted senators, working late into the night, didn’t have much to say about this assessment. Maybe they’re hoping, as in so many other areas, that in year or two the boom will be back, and all will be taken care of.
Hoping the boom will return and bail us out: That appears to be the attitude of several legislators who want to delay a contribution by state employees to their own retirement.
The Joint Appropriations Committee notes that the state retirement system needs a bit more revenue to keep up with retiree payments – nobody argues with that – and the JAC wants to up the amount of income contributed by state employees by 1.43 percent of whatever they earn. My creaky math suggests that a lower-end employee earning $35,000 a year would pay about $500 a year toward his or her retirement.
That would be a new experience for recent state employees – though employees and the state are supposed to split the current 11 percent contribution 50-50, the state has generously been picking up the whole tab in recent years.
Sen. Kathryn Sessions (D-Cheyenne) and some other solons want the state to kick in its extra bit (also1.43 percent) but leave the employees alone for now. “Give them one year to get their budget adjusted,” she told the Senate today.
(I happen to be technically a state employee – sorry, my wage is none of your business – but I’ve stayed outside the state retirement system. I have to say, though, that never in my entire life have I had a year’s budget mapped out to the last $500.)
On second reading of the budget, the Senate refused to let employees off the hook for that 1.43 percent. But it’s not over.