12LSO-0141.C1 and the Regional Cost Adjustment Sublette County School District #1

Purpose of the Regional Cost Adjustment The emphasis of the Wyoming Constitution and the Wyoming Supreme Court decisions regarding school finance is on the quality of education. The funding of a quality education must be cost- based. The Regional Cost Adjustment (RCA) is used to adjust the distribution of funding for regional differences and provide additional resources to school districts with higher labor costs.

Current RCA Model The current RCA model. School districts are allowed to choose one of the following: Wyoming Cost of Living Index Hedonic Wage Index Base 100 This model is equitable and effective. It is not broken! The State of Wyoming is a vast region that has considerable variance in the population, labor costs, costs of living. Many of the factors that drive these costs are specific to Wyoming.

Current RCA Model The WCLI accurately reflects the cost of living in Wyoming. The WCLI is Wyoming specific data updated quarterly and adjusted in the RCA annually. It has been vetted and endorsed as a cost-based index. WCLI is constructed as a weighted average of the prices for food, utilities, housing, apparel, transportation, medical services, and personal care. The Campbell II court decision upholds the validity of the WCLI, “...because the WCLI has been developed for the purpose of administering the State’s property tax system, it cannot be subject to any suspicion that its use for purposes of education equalization is biased.

The Proposed Hedonic Wage Index (HWI) The legislature is proposing that the HWI be adopted as the sole calculation for the RCA. The HWI proposed by the legislative consultant from Texas is not cost-based. It relies on variables that are arbitrarily chosen and are purely subjective. Research conducted by Teton CSD #1 shows that only Texas uses the HWI as the sole calculation for RCA. The Texas consultant stated that the WCLI overstates the cost of living in places like Jackson and Pinedale because the “attractive amenities that are related to being adjacent to Yellowstone.”

Effects of Using the HWI as the Sole Calculation This proposal creates winners and losers among Wyoming school districts. A loss of over $1.1M to Sublette County schools. Sublette 1 - $656,112 Sublette 9 - $468,045 A loss of jobs and programs at Sublette County schools. The Cheyenne and Casper school districts would gain over $4.5M.

Effects of Using the HWI as the Sole Calculation Programs at Sublette 1 that are funded “outside the model” that would be considered for reduction to meet the $656,112 reduction in funding: Pinedale Elementary School: Elementary Science Gifted and Talented Pinedale Middle School Gifted and Talented Sports/Extracurricular Activities Pinedale High School Specialist Teachers/Programs (Ag, Art, Vocational, Music, PE, ELL, Technology). Sports/Extracurricular Activities

The Formula Dilemma Prior to the school year, Wyoming teacher salaries ranked 42 nd nationally. To their credit, the legislators decided to do something about it. They significantly increased funding to schools and directed schools to address salaries. As a result many school districts have done that. Especially those in remote locations or with high housing costs. Wyoming is now in the top five in the nation depending on which index is used, meeting the goal set by the legislature. Many of the districts who made the salary adjustments currently do not meet FTE staffing expectations in the model because their salaries are above the state average, i.e. you can only staff 0.75 of a position using our salary schedule that could be staffed at 1.0 using the state average. We all know that the cost of living in Sublette County is significantly higher than living elsewhere. Without those salaries, our teachers could not afford the high cost of living in Sublette County and our ability to recruit and retain high quality teachers would be significantly reduced.

Legislative Talking Points The current Regional Cost Adjustment (RCA) model is equitable and effective. It is not broken! The WCLI accurately reflects the higher cost of living in Wyoming. The WCLI is updated quarterly and adjusted in the RCA annually. It has been vetted and endorsed as a cost-based index. The HWI proposed by the legislative consultant from Texas in not cost-based and it significantly reduces the weight of housing in the calculation. The Wyoming Supreme Court Decisions Campbell II and Campbell IV state that a Districts “amenity value” cannot be accurately quantified and that housing costs are a significant component of the cost of living.

Legislative Talking Points There is a high degree of probability that this legislation will result in a legal challenge based on equity, resulting in unnecessary legal fees for both Wyoming School districts and the State. This proposal creates winners and losers among Wyoming school districts. Using the HWI as the sole indicator will reduce funding to Sublette County Schools by over $1.1M. This will result in lost jobs and program cuts. The Cheyenne and Casper school districts would gain over $4.5M. This change will significantly reduce the ability of schools in high cost areas to recruit and retain quality teachers and administrators.