By Hannah Shields
Wyoming Tribune Eagle
Via- Wyoming News Exchange

CHEYENNE — Wyoming’s education spending is expected to outpace its revenue by more than half a billion dollars by the 2029-30 biennium, according to a long-term revenue forecast generated by the Legislative Service Office.

Former Wyoming Freedom Caucus Chairman and Joint Appropriations Committee co-Chairman Rep. John Bear, R-Gillette, brought attention to this issue during a JAC meeting last week. Bear and three other lawmakers donned bright red suits Monday to symbolize the predicted deficits in the School Foundation Program and general fund accounts.

A bobblehead of each lawmaker (also wearing red) sat on the dais in front of committee members, a gift from Rep. Bill Allemand, R-Midwest.

“We need to be aware of it as we’re making decisions in the JAC,” Bear told the Wyoming Tribune Eagle on Thursday.

“It’s just a matter of making priorities so that we ensure that we’re financially sound.”

The School Foundation Program account is the state’s main spending account for K-12 public education. Money for the state’s education funding model — which is being recalibrated this year — is pulled out of the SFP.

This account has a balance of $765 million as of July 1, the start of the 2025-26 fiscal year. The long-term revenue forecast predicts this balance to go down to $100 million by July 1, 2028. The state’s Legislative Stabilization Reserve Account (or the state’s “rainy day fund”) provides a backstop to the SFP once it dips below $100 million.

The deficit in the SFP is a result of predicted expenditures exceeding anticipated revenues. In the 2027-28 biennium, there is a predicted deficit of $104.4 million in the SFP. By the 2029-30 biennium, that deficit is predicted to reach $686 million.

Bear described this deficit as “significant.” The state is not allowed to deficit spend, per the Wyoming Constitution, he said. The state’s multiple savings accounts keep Wyoming from running into a constitutional conflict.

The “more significant picture” is the increase from $184 million to $686 million, Bear added.

“That rate of increase is what’s most concerning, and it has to do with the behavior of the Legislature,” Bear said. “We have to take that into account going into the next session, so that we can start turning that in a different direction.”

A deficit is also predicted in state spending for the general fund, Wyoming’s main spending account. That deficit is predicted to be $17 million in the 2027-28 biennium and $10 million in the 2029-30 biennium.

The revenue forecast does not account for realized capital gains — or profits on state investments — which are expected to be pronounced in later years. A revenue update from April shows the state is on pace to generate substantial realized capital gains for the 2025 fiscal year.

A top priority for the Wyoming Freedom Caucus, a group of hardline Republicans, is to “DOGE Wyoming’s budget,” according to an April news release. 

The term is coined from the federal Department of Government Efficiency, a newly created but unofficial department under the Trump administration to cut out wasteful federal spending.

Bear said a provision in the “One Big Beautiful Bill Act” — currently being debated on Capitol Hill — reduces federal mineral royalties on coal production. This reduction would cost Wyoming around $50 million a year, according to Bear. In addition, Wyoming lawmakers are concerned about state revenues from a volatile oil market.

“There’s pressure down on our revenues, and so we want to keep that in mind as we work on budgets,” Bear said. The next legislative session in 2026 is a budget session, where the Legislature will pass a bill to fund the state for the 2027-28 biennium.

However, Bear noted that the committee’s study topics, which include wildfire funding, sales and use tax distribution, and developmentally disabled waivers, are “extremely important.”

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Recalibrating school funding

In the 1990s and 2000s, the Wyoming Supreme Court ordered the Legislature during the Campbell County cases to recalibrate its school funding model once every five years. While the state has successfully completed the required recalibration process, a new funding model has not been adopted since 2010.

This year is a recalibration year, and the Select Committee on School Finance Recalibration held its first meeting last month. Looming over the recalibration process is a court order from a district court judge to include multiple new elements in the state’s funding model.

These elements include funding for elementary mental health counselors, school resource officers, nutrition programs and a computer for every student. The state has appealed the judge’s decision, which dropped in late February, to the Wyoming Supreme Court.

Bear, who is not a member of the recalibration committee, said the judge’s order could “exacerbate” the deficit. However, recalibration committee co-chairman Rep. Scott Heiner, R-Green River, told the WTE the committee is taking the court order “under advisement” but does not currently see it as a requirement. 

“At this point, to say we have to do that, I don’t think I would say that, because that ruling is being appealed as we speak. So it’s not finalized,” Heiner said.

He added that the predicted SFP deficit over the next two bienniums shouldn’t impact this year’s recalibration process.

“That has not entered into our discussions at all at this point,” Heiner said.

 

Prepping next year’s budget session

Gov. Mark Gordon told the WTE in an emailed statement that he “anticipates a lean budget for the upcoming biennium.” 

Similar to concerns echoed by appropriators last week, the governor highlighted “significant uncertainty surrounding federal funding and federal policy decisions” to agency directors.

Federal funds make up approximately 20% of the state’s total budget, which makes “federal unpredictability a critical consideration,” he said.

“As the federal government further develops and refines their budget, the State of Wyoming will need to be prepared to navigate those decisions and adjust our state budget if we receive less federal funds than we have in past years,” Gordon said in the email.

However, it’s also important to note Wyoming does not currently face a budget shortfall, Gordon said. Fiscal pressures on the state’s spending accounts are “largely” a result of recent legislative action that reduced local revenue streams and increased the state’s financial obligations, he said.

There are several sources of revenue that funnel into the SFP, the largest source being ad valorem taxes, more commonly known as property taxes. The second-largest source of revenue is federal mineral royalties.

The Wyoming Legislature has passed several forms of property tax relief over the last two legislative sessions. Possibly the largest was passed in the recent general session through Senate File 169, which provides a 25% tax exemption on primary residential structures up to the first $100 million of the structure’s fair market value.

Bear said the property tax relief does have an impact on education funds, but added the state could make up for this lost revenue in other ways, such as increasing industrial and commercial property taxes.

“If you look at residential property taxes, they’re actually a small portion of all property taxes,” Bear said. “You allow people who pay those property taxes to have more of that money, that will be injected into the economy, and that will help those other property taxes, as well, which goes directly back to the SFP.”