Select Committee on School Facilities

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Approval Pending

of SUMMARY

P ROCEEDINGS SELECT COMMITTEE ON SCHOOL FINANCE RECALIBRATION

COMM ITTEE M EETING I NFORMATION June 29-30, 2015 Buffalo Bill Center of the West Cody, Wyoming

COMM ITTEE M EM BERS PRESENT Senator Hank Coe, Co-Chairman Representative David Northrup, Co-Chairman Senator Phil Nicholas Senator Tony Ross Senator Chris Rothfuss Senator Jeff Wasserburger Representative Rosie Berger Representative Cathy Connolly Representative Steve Harshman Representative Albert Sommers

LEGISLATIVE SERVICE OFFICE STAFF Tania Hytrek, School Finance Manager Matt Willmarth, School Finance Analyst Matt Sackett, Research Manager John Roth, Staff Attorney

ADDI TIO N AL LEGISLATORS PRESENT Senator Stephan Pappas Senator Bill Landen Representative Michael Madden Representative Garry Piiparinen

Please refer to Appendix 1 to review the Committee Sign-in Sheet for a list of other individuals who attended the meeting.

The Committee Meeting Summary of Proceedings (meeting minutes) is prepared by the Legislative Service Office (LSO) and is the official record of the proceedings of a legislative committee meeting. This document does not represent a transcript of the meeting; it is a digest of the meeting and provides a record of official actions taken by the Committee. All meeting materials and handouts provided to the Committee by the Legislative Service Office, public officials, lobbyists, and the public are on file at the Legislative Service Office and are part of the official record of the meeting. An index of these materials is provided at the end of this document and these materials are on file at the Legislative Service Office. For more information or to review meeting materials, please contact the Legislative Service Office at (307) 777-7881 or by e-mail at [email protected]. The Summary of Proceedings for each legislative committee meeting can be found on the Wyoming Legislature’s website at www.wyoleg.gov. PAGE 2 OF 13

EXECUTIVE SUMMARY The Select Committee on School Finance Recalibration (Committee) met for two days at the Buffalo Bill Center of the West in Cody, Wyoming to receive information regarding K-12 education funding and projections for future revenues for state education accounts. In addition, the Committee received information related to the 2015 recalibration of the education resource block grant model, including the salary and regional cost adjustment elements. The Committee also discussed a schedule for presentation of the remaining elements over the course of the upcoming interim.

CALL TO ORDER (JUNE 29, 2015) Cochairman Coe called the meeting to order at 8:40 a.m. The following sections summarize the Committee proceedings by topic. Please refer to Appendix 2 to review the Committee Meeting Agenda.

APPROVAL OF MINUTES Minutes from the May 21 and 22, 2015 meeting were approved without revision.

REVIEW OF K-12 FUNDING Matt Willmarth, School Finance Analyst for the Legislative Service Office (LSO), spoke to the Committee about the seven accounts that support educational operations and maintenance and construction of facilities for Wyoming’s K-12 public education. See Appendices 3 and 4. Mr. Willmarth discussed each account’s history, purpose and balance. He described the lands allocated to Wyoming by the federal Act of Admission, including lands allocated to the State as school lands. He stated the revenues flowing into the Permanent Land Fund (PLF) may be realized from the sale or lease of the lands, the production or sale of minerals or any depleatable resource from the land and are held by the State for the exclusive benefit of public K-12 education. Mr. Willmarth listed the multiple accounts within the PLF and further discussed the operation of the Common School Account (CSA) within the PLF. He stated the income from the CSA flows into the Common School Land Income Account (CSLIA), which then flows into the School Foundation Program Account (SFP) and is utilized to fund public K-12 operational expenses. Mr. Willmarth also briefed the Committee on the spending policy amounts as amended by the 2015 Legislature for these accounts. He described the operation of the School Foundation Program Reserve Account, as established by the Legislature during the 2014 Budget Session, noting the funds initially deposited into the account were from the Strategic Investments and Projects Account and the General Fund and that the funds will continue to increase in accordance with the spending policy amount and the income realized from the CSLIA. Mr. Willmarth moved on to discussion of the Common School Permanent Land Fund Spending Policy Reserve Account (CSPLF RA) as created by statute and the spending policy amounts as amended during the 2015 General Session related to the operation of this account. He further described the SFP and the appropriations from this account to the Foundation Program for the operation of public schools in Wyoming. Mr. Willmarth discussed the operation of the Wyoming education resource block grant funding model (Model) and described the process for determining a school’s “guarantee”. He explained the difference between an entitlement district (receiving payment from the State) and a recapture district (requiring payment from the district to the State for redistribution). He described the multiple revenue sources for the SFP, including the state school tax (12 mill statewide levy), federal mineral royalties, school district recapture payments, CSLIA income and automobile taxes. Mr. Willmarth emphasized the dependence of the SFP on revenue realized from the mineral industry. He discussed the assessed valuations projected by the January 2015 CREG and the substantial decline that is forecasted, approximately 28.4% less for 2015 than the assessed values for oil and gas in 2014 and 23.6% less for 2016. Mr. Willmarth stated the reduction in commodity prices beginning in late 2014 will reduce assessed values, resulting in a decline in the revenue for SFP account

SELECT COMMITTEE ON SCHOOL FINANCE RECALIBRATION Summary of Proceedings

WYOMING LEGISLATIVE SERVICE OFFICE • 213 State Capitol • Cheyenne, Wyoming 82002 TELEPHONE (307) 777-7881 • FAX 307-777-5466 • E-MAIL [email protected] • WEB SITE www.wyoleg.gov PAGE 3 OF 13

and the funds contributed by local taxes for the operation of public schools in Wyoming. He briefed the Committee on the historical balances of the SFP and the correlating appropriations for the operation of K- 12 public schools in Wyoming.

Mr. Willmarth moved on to discussion of revenues and accounts related to the capital construction and maintenance of K-12 public education facilities. He described the School Capital Construction Account (SCCA) and the historical appropriations from the account. Mr. Willmarth stated funds transferred from the SFP and federal coal lease bonus payments make up the majority of the funds available in the SCCA. He also noted the lack of successful federal coal lease sales since January of 2012 will significantly impact the balance of the account and funds available for expenditure for public K-12 capital construction.

Mr. Willmarth concluded his presentation with discussion of projected education revenues and expenses for future biennia. He listed the assumptions he made in performing the analysis, including that the Model continues to operate under current law and without any modifications made in relation to the current recalibration efforts. Mr. Willmarth also assumed enrollment would continue to increase by 1% each year and there would be no external cost adjustment to the Model beyond those adopted in the 2015 General Session. He also accommodated a 4% increase in special education and transportation costs, based on prior year trend data and utilized the January 2015 CREG estimates. Mr. Willmarth stated realized capital gains for 2015, to date, are not considered in the analysis and he assumed there would be no transfers from the PLF holding Account into the CSA corpus. He discussed significant potential shortfalls for the SPA and SCCA, which may not be fully made up by balances in the PLF Holding Account for the 2017- 18 and 2019-20 biennia. See Appendix 3, Attachment C.

The Committee discussed the task of recalibration of the Model in light of the revenue projections. Members discussed the various mechanisms that could be considered to increase revenues in light of the potential deficit. The Committee also discussed recalibration and consideration of elements not within the cost-based recommendations, including those elements currently funded by the Legislative Model. Members commented on the importance of considering the potential revenues that will be available in undertaking recalibration and in consideration of elements that will increase spending.

REGIONAL COST ADJUSTMENT Dr. Lori Taylor, Associate Professor for the Bush School of Government and Public Service and Adjunct Associate Professor, Department of Economics, Texas A&M University, briefed the Committee on the regional cost adjustment (RCA) element of the Model. See Appendix 5. Dr. Taylor stated the purpose of the RCA is to equalize the purchasing power of school districts to recruit and retain equivalent school personnel. She explained three strategies that can be utilized to operationalize a RCA, including a cost-of- living index, a hedonic wage index, also known as a teacher cost index, and a comparable wage index.

Dr. Taylor discussed utilizing the cost-of-living index strategy for purposes of a RCA, noting a cost-of- living index reflects the costs of purchasing a “market basket” of goods and services in each location. She stated such an index is constructed by utilizing a weighted average of the prices for food, housing, apparel, transportation, medical services and various other consumer elements. Dr. Taylor explained the advantages of utilizing this approach for a RCA, including that it is straight-forward and easy to explain and is clearly outside of the control of school districts. She also listed the disadvantages of a cost-of- living index, including that it overstates the cost of hiring in locations with attractive local amenities, requires regional data on prices and is biased if weights do not reflect local purchasing patterns for teachers. She also noted it cannot reflect cost differences at a district level.

SELECT COMMITTEE ON SCHOOL FINANCE RECALIBRATION Summary of Proceedings

Dr. Taylor moved on to discussion of the hedonic wage index and use of this strategy for implementing a RCA. She stated researchers use data on actual teacher salaries and a regression analysis to isolate the part of teacher salaries that is explained by uncontrollable factors. She further explained the index is constructed by predicting the salary in each school district, assuming there are no differences across districts in the controllable factors and then dividing the predicted salary amount by a reference salary, such as the statewide average. Dr. Taylor summarized the advantages of a hedonic wage index, including it can be constructed from existing data, is clearly relevant to local schools districts and can pick up differences in cost at the district level. She stated disadvantages to the index include it relies on statistical models and professional judgment to separate controllable from uncontrollable costs, meaning it may misidentify high-spending districts as high-cost. Further, the index can be subject to school district manipulation.

Dr. Taylor discussed the operation of a comparable wage index (CWI), which is constructed by estimating the prevailing wage for non-educators in each labor market, and then dividing that local estimate by a reference wage. She stated the advantages of this approach include it is clearly outside of school district control and is more complete than a cost-of-living index, accounting for the fact that teachers are not the only workers sensitive to cost-of-living or local amenities. Dr. Taylor stated the index can be constructed from existing data. She stated a potential weakness of this approach is it is only unbiased if teachers and the non-teachers analyzed have similar tastes and spending patterns, it also cannot reflect cost difference at the district level.

Dr. Taylor briefed the Committee on the approach of various states in utilizing or creating a RCA. She described Colorado’s cost-of-living factor, constructed to reflect differences in costs specifically related to the education market. Dr. Taylor discussed Wyoming’s current approach for the RCA in providing the greater of Wyoming Cost-of-Living Index (WCLI), the 2005 Hedonic Wage Index or the minimum of the statewide average to adjust the salary component of the Model. Members discussed the political compromises resulting in the current approach. Dr. Taylor described the construction of the WCLI, modeled after the U.S. Bureau of Labor Statistics’ Consumer Price Index (CPI-U), with the weights of the items reflecting purchasing patterns of the typical urban consumer in the U.S., such as Washington D.C., San Francisco or New York City. She stated the WCLI is constructed bi-annually by the Wyoming Department of Administration and Information and the statewide average is equal to 100 on the index. She expressed significant concern in the State’s use of the WCLI for the RCA, stating the WCLI overstates the cost-of-living in Wyoming counties with relatively high housing cost. Dr. Taylor stated the WCLI is constructed assuming housing represents 32% of household expenditures, the national average for urban areas, but in reality Wyoming residents spend a significantly smaller portion of their household budgets on housing. She also noted the WCLI was not constructed to serve as a RCA, but instead was constructed an inflationary index.

Dr. Taylor also discussed the 2005 Hedonic Wage Index (HWI) utilized by Wyoming in application of a RCA. She stated the 2005 HWI is a regression-weighted average of the uncontrollable cost factors as they were in 2003-04 and 2004-05, utilizing 100 as the statewide average on the index. Dr. Taylor listed the uncontrollable factors in the 2005 HWI, including the WCLI, geographic indicators such as population density and the distance to Yellowstone National Park, to a city with a population of at least 15,000 and a city with a population of at least 50,000. She stated student demographics, such as the unduplicated “at- risk” count and the percentage of special education and mobile students, are also uncontrollable cost factors in the 2005 HWI. She summarized concerns related to the continued use of the 2005 HWI, including that the data is more than 10 years old, the statistical method utilized to construct the index does not adequately control for differences in teacher quality and the index should reflect total salary, not the base salary.

SELECT COMMITTEE ON SCHOOL FINANCE RECALIBRATION Summary of Proceedings

She provided the Committee potential options to update and improve a RCA for the Model. The options include: developing a new WCLI with local weights, including a housing weight more reflective of Wyoming spending patterns; estimating a new HWI, and creating a CWI modeled after the New York CWI, utilizing the comparable occupations within the Occupational Employment Survey or modeled after the National Center for Education Statistic’s CWI. She also discussed the HWI she constructed in 2011 for the Wyoming Legislature, noting it was not implemented, but is superior to the 2005 HWI in that it contains more precise estimates, the index values better reflect labor costs and it better supports that the HWI is based on costs outside of school district control. She suggested if the Committee does not support creation of a new HWI, the 2011 HWI be utilized for that portion of the RCA.

Dr. Taylor discussed the statewide impact of the RCA on the Foundation Program guarantees. She noted her analysis of this portion of the presentation was assisted by information provided by Matt Willmarth, LSO, including a memo he prepared for the Committee on the issue. See Appendix 6. She discussed the marginal cost of the RCA over the course of the last 10 years on a statewide and district-by-district basis. Dr. Taylor also discussed the equity implications in the use of three indices, noting the purpose of an RCA is to equalize school district purchasing power, and utilizing three separate indices arguably does not do this in the most defensible manner. She suggested a single index be utilized and at the very least, the indices be updated to reflect a more accurate depiction of the cost differences, if the State is going to continue the three prong approach.

Regional Cost Adjustment: Public Comment Janine Bay-Teske, Board of Trustees Member, Teton County School District #1 and President of the Wyoming School Boards Association, spoke about the current approach to the RCA and the utilization of the WCLI, the 2005 HWI and the minimum of the statewide average. She stated the current approach captures the diversity among the school districts in Wyoming. Ms. Bay-Teske discussed the problem of affordable housing in Teton County and encouraged the Committee to take into consideration the importance of being able to equally attract teachers through the RCA. She expressed concern regarding the use of a single index for the RCA, stating one index is unable to reflect the cost differences between school districts.

Don Dihle, Business Manager, Campbell County School District #1 , presented the Committee with information relative to the impact of the RCA on the district’s guarantee. See Appendix 7. He stated the 2011 HWI would have imposed significant hardship on the school district and would have put the school district at a hiring disadvantage. He further, stated an index utilizing county level data would not accurately reflect the substantial variation in costs between school districts that may be located in the same county. In response to inquiry from the Committee, Staff stated the proposed HWI in 2011 would have resulted in an increase of funding for Campbell County School District #1. Mr. Dihle stated he believed the increase for Campbell County School District #1 was disproportionate to the increase received by other districts under the 2011 HWI and Campbell County School District #1 should have benefited more greatly.

Continued Discussion by the Committee of the Regional Cost Adjustment (This discussion occurred on June 30th). Senator Wasserburger moved, seconded by Senator Nicholas, the 2015 recalibration include work by Dr. Taylor to update the 2011 HWI, utilizing her professional judgement. It was further moved, Dr. Taylor examine the WCLI and provide recommendations for reweighting to more accurately reflect the consumer practices in Wyoming and provide recommendations relative to the creation of a Wyoming CWI modeled after the National Center for Education Statistic’s CWI and use the newly computed CWI

SELECT COMMITTEE ON SCHOOL FINANCE RECALIBRATION Summary of Proceedings

as one variable in the updated HWI. The motion also included a request of Dr. Taylor to provide recommendations relative to rebasing to a minimum of one for any index presented. Lastly, the motion included a directive to request the Department of Workforce Services, Division of Research and Planning, Department of Education and Department of Administration and Information Economic and Analysis Division provide data to Dr. Taylor in the necessary format to perform the work required by the motion.

Representative Harshman moved, seconded by Senator Nicholas, to amend the motion and after the charge related to the CWI, insert “This new CWI should also reflect energy impacting jobs across the state.” The motion to amend the initial motion passed. Representative Connolly further moved, seconded by Senator Wasserburger, after the language added by Representative Harshman to add “county by county where relevant and possible.” The motion to amend the prior motion passed. The motion as amended passed.

SALARIES Dr. Christina Stoddard, Associate Professor, Department of Agriculture Economics and Economics, Montana State University, presented the Committee with a labor market analysis of teaching and non- teaching staff, comparing salaries in Wyoming to the nation and other states in the region. See Appendix 8. Dr. Stoddard discussed the factors utilized to conduct the labor market comparisons, including the use of adjusted versus unadjusted salaries and Model salaries versus actual salaries. She summarized salary trends over time and explained if average salaries were equal to those in the Model, as compared to those actually paid, Wyoming would still rank first in the region, but lower nationally. Dr. Stoddard also stated salaries have trended up sharply after 2005.

She compared teacher salaries in Wyoming to those of other professionals and described what factors make a profession comparable to teaching. Dr. Stoddard identified three types of comparable professionals: (1) college graduates; (2) professional and technical workers, as defined by the Bureau of Labor Statistics; and (3) comparable professions identified by the Economic Policy Institute.

MEETING RECESS The Committee recessed at 4:55 pm.

CALL TO ORDER (JUNE 30, 2015) Co-Chairman Coe called the meeting to order at 8:35 am.

CONTINUATION OF REVIEW AND DISCUSSION OF SALARIES

Teacher Salaries Dr. Stoddard resumed her discussion with the Committee and compared teachers' salaries to the salaries of other college graduates when adjusted to match the characteristics of Wyoming teachers and annual weeks worked, concluding Wyoming teachers make approximately 120% when compared to the salary of other college graduates, noting regionally teachers make just under 100% when compared to other college graduates and nationally, it is approximately 90%. Dr. Stoddard also compared the average annual wage of teachers to other professions and comparable occupations, utilizing the Occupational Employment Statistics data, noting Wyoming teachers earn slightly less than all other professional/technical occupations. Dr. Stoddard stated, however, when comparing the ratio of teacher salaries to comparable professions, Wyoming is significantly higher than neighboring states and the United States.

SELECT COMMITTEE ON SCHOOL FINANCE RECALIBRATION Summary of Proceedings

Dr. Stoddard next discussed the effects of the salaries on recruitment and retention of teachers in Wyoming. She described the indicators used for examining recruitment and retention, including: turnover rates, exit rates of new teachers and retirees and recruitment from Wyoming and other states for teachers who are recent graduates. Individual members encouraged the Committee to investigate means to recruit qualified personnel to rural school districts. Dr. Stoddard concluded exit rates of teachers remain low and relatively constant at approximately 10% annually. She further stated approximately half of the teachers employed by Wyoming school districts graduate from out of state education programs, noting there is a growing proportion from online education programs. Senator Nicholas asked about actual salaries versus the Model salaries and whether the increase in salaries has improved the quality of hires over time. Dr. Stoddard replied she believes the districts’ actual salaries increase competition between Wyoming districts more than between Wyoming and surroundings states. She stated this is largely due to Wyoming's salaries being significantly higher than surrounding states, noting the Model salaries are also the highest in the region.

Non-Teaching Salaries Dr. Stoddard next spoke about salaries for non-teaching occupations such as school administrators, professional staff (e.g., librarians, counselors psychologists, social workers, etc.), secretary/clerical staff, other classified staff and supervisory aides. She reviewed the indicators typically utilized to analyze the labor market for non-teaching occupations, including relative salaries in comparable professions and the turnover rates by occupation group. Dr. Stoddard began this portion of the presentation by discussing the salaries of education administrators, including superintendents, assistant superintendents, business managers, principals and assistant principals. She compared the salaries paid in Wyoming, the Model salaries and the Occupational Employment Statistics data for similar positions. She concluded the actual salaries of administrators in Wyoming are 15 to 30% above the Model salary and in line with the market salary. Dr. Stoddard provided similar information for professional staff. She stated the actual salaries of counselors, social workers and librarians are above the market salary, salaries of psychologists align with the market and nurses are paid below the market salary.

Dr. Stoddard also discussed the salaries of maintenance workers, janitors, bus drivers and supervisory aides. She stated the salary of secretary and clerical staff is nearly equal to the Model salary and is in line with the market salary. In reference to custodians, she stated the salary actually paid is similar to the Model salary and is above the market salary. Dr. Stoddard remarked the actual salary of instructional aides is 13% higher than the Model and is below the market for similar positions.

In conclusion of the discussion of salaries for non-teaching personnel, Dr. Stoddard stated the actual average salaries tend to be higher than Model salaries and are generally more in line with market averages. She cautioned, however, the hours and weeks worked tend to be lower in schools and salaries adjusted for hours and weeks tend to be above market.

Dr. Stoddard explained turnover statistics for these positions as well, utilizing the statewide average exit rate for comparison purposes. She stated school administrators are exiting at a rate of 10 to 15%. Dr. Stoddard remarked, over time, educational professional staff exit at about 15%, increasing about 1% each year since 2002. Dr. Stoddard reported aides and professional staff have experienced rising turnover rates, especially since 2008, noting this is particularly true for new aides.

Representative Sommers moved, seconded by Senator Wasserburger, the 2015 recalibration include additional analysis by Dr. Stoddard on the labor market for non-teaching personnel utilizing data from the Department of Workforce Services and that Dr. Stoddard report back to the Committee on this subject at a later date. The motion passed.

SELECT COMMITTEE ON SCHOOL FINANCE RECALIBRATION Summary of Proceedings

Salaries: Public Comment Marty Kobza, Superintendent of Sheridan County School District #1, described the exit interviews his district conducts with exiting teachers. Superintendent Kobza stated the interviews frequently show teachers leave for higher paying salaries, marriage and family, retirement and because teachers are unhappy with the accountability system the State is implementing. He also spoke about recruitment efforts conducted by his district and stated Black Hills State University has an exceptional teacher program that attracts many students from Wyoming. He noted applicants for high school teaching positions have significantly declined in recent years. Superintendent Kobza stated salaries are becoming more competitive regionally, particularly for University of Wyoming graduates. Mr. Kobza discussed the partnership between Sheridan Community College and Chadron State College, allowing high school students to start classes at Sheridan Community College and then transfer to Chadron State University to obtain a teaching degree. He also spoke about the RCA and the external cost adjustment (ECA), encouraging the Committee to implement an ECA tied to a specific index that is automatically adjusted annually. He stated an automatic adjustment will allow districts to better prepare their budgets.

Teresa Chaulk, Superintendent, Lincoln County School District # 1, commented about salaries in her district and described recruitment efforts the district has used to address the low number of applicants her district receives for open positions. Superintendent Chaulk described the challenges for hiring new teachers because her district is not a “destination location.”

Ms. Chaulk also commented as a member of the Wyoming Association of School Business Officials’ Recalibration and Benefit Workgroup (Workgroup), stating she is supportive of the block grant nature of the Model and requested it remain a block grant. Superintendent Chaulk also encouraged the Committee to update elements that have not been reviewed since the 2005 recalibration. Don Dihle, Business Manager, Campbell County School District #1, spoke on behalf of the Workgroup, and presented the Committee with a handout containing salary and benefit recommendations. See Appendix 9. Mr. Dihle summarized the recommendations of the Workgroup, including increasing the percentage provided for substitute teachers to 7.5% to accommodate the significant expenditure by districts on this element. He stated participation of teachers in coaching and school activities results in additional teacher absences. Mr. Dihle also requested the substitute teacher component be adjusted by the RCA. He also stated the Workgroup recommends Wyoming retirement benefits be funded at the full employee and employer contribution rates, 16.62% as of July 1, and be updated as necessary. Eliminate the reimbursement of the Wyoming retirement contributions provided outside of the Model and include all funds for this component within the Model. He stated the Workgroup recommends increasing the funding for workers compensation to 0.8% from 0.7% and increasing the funds provided for unemployment to 0.09% from 0.06%.

Sally Wells, Business Manager, Carbon County School District #2, commented on teacher salaries, stating her district pays 100% of the health insurance premiums for the employees, but does require the employee to pay their share of the retirement benefits. She requested the Model be increased to include the cost to pay 100% of the employee and employer contributions for retirement. Ms. Wells also addressed teacher absences and stated her district switched to a modified four-day work week to minimize teacher absences on Fridays due to participation in school activities. Ms. Wells stated approximately half of the teacher absences are still related to student activities. In response to inquiry, she stated the funds are taken from the general instruction budget for all substitutes, regardless of the reason for the absence.

Cody Sinclair, Human Resource Coordinator, Sheridan Country School District #2, expressed gratitude regarding the funds appropriated by the Legislature for the operation of schools. He stated he believes the

SELECT COMMITTEE ON SCHOOL FINANCE RECALIBRATION Summary of Proceedings

salaries paid by districts are generally competitive and they are able to retain and recruit qualified personnel. Mr. Sinclair caveated his comments by requesting the data as presented to the Committee on teacher salaries be broken down more granularly to address the difficulty in recruiting and retaining teachers for specific positions, including math, science and various other positions. He also encouraged the Committee to strive to provide salaries that are competitive nationally, as opposed to regionally, particularly for those states that are increasing student performance. Mr. Sinclair stated schools report recruitment and retention data to the Wyoming Department of Education (WDE) and encouraged Dr. Stoddard to look at this information. He also addressed exit interviews and stated many teachers leave to retire or due to underperformance. Mr. Sinclair commented Wyoming's teacher salaries are getting more competitive with neighboring states and the Model salaries for principal positions are insufficient to attract candidates because of the high housing costs in Sheridan.

Representative Michael Madden provided several comments to the Committee related to the 2015 recalibration effort. He recommended the Committee use accountability information to determine what the market “basket of goods" is in Wyoming by examining how high performing school districts are spending the block grant. Representative Madden encouraged the Committee to isolate successful practices to encourage underperforming districts to expend the funds in a similar fashion. He also recommended the Committee investigate the possibility that seniors are not taking a full academic load the last year of attendance by analyzing senior class enrollment in relation to FTEs for those students and attempt to remedy the issue by requiring seniors to attend to receive 100% of the funding from the State for these students or reduce the funds for those student in accordance with the actual attendance. Representative Madden recommended the Committee address the 100% reimbursement of transportation costs and stated if districts had to pay for a portion of their transportation costs, it may help lower these expenses. Representative Madden next suggested the Committee encourage districts to shift their focus towards academics and place less emphasis on activities. He stated this would cut down on teacher absences for activities and affect the amount of substitute days the Model would need to fund. Finally, Representative Madden encouraged the Committee to address how the Model may fund fractions of professional positions for small schools and districts.

Kirby Eisenhauer, Associate Superintendent for Instructional Support, Campbell County School District #1, discussed salary trends. He requested the Committee consider requesting a trend analysis be prepared based on past data to predict the convergence of the salaries paid in Wyoming to those paid regionally. Mr. Eisenhauer stated he believes if Wyoming's salaries are held constant, Wyoming will continue to fall nationally in the salary rankings and competitiveness will increase regionally.

Lu Beecham, Business Manager, Fremont County School District #2, commented about the challenges of teachers leaving for higher salaries in areas with lower housing costs, particularly for technical and certified staff. She requested the Committee update the salaries in the Model to those paid by school districts in the most recent school year and provide for an automatic annual ECA. Ms. Beecham stated she is working with other small school districts, with average daily memberships less than 147 students, to synthesize comments related to unique challenges they face and stated the group will present comments related to that subject at the appropriate time.

Janine Bay-Teske, Board Member for Teton County, responded to a question by the Committee related to the comparison of teacher and superintendent salaries. She stated this is due to the variation in contractual arrangements, noting superintendents are contracted to work 260 days, principals are required to work 221 days and teachers have 190 day contract. Mr. Bay-Teske stated this variation was not accounted for in the data presented by Dr. Stoddard. Members commented on the regional comparison for these positions, noting a similar phenomenon exists within this data set as well.

SELECT COMMITTEE ON SCHOOL FINANCE RECALIBRATION Summary of Proceedings

MODEL S ALARY SCHEDULE AND WEIGHTED MODEL S ALARIES Matt Willmarth, LSO, and Jed Cicarelli, School Foundation Program Supervisor, WDE, presented a memorandum regarding Model teacher salary schedules and weighted Model average salaries in response to inquiries made during the May meeting by the Committee. See Appendix 10. Mr. Willmarth stated the Model provides salaries for each personnel category and adjusts the salaries by individual school district characteristics. He stated the WDE updates the data annually to reflect the actual characteristics of the staff employed by the school district for education obtainment, experience and responsibility. He also indicated the salary component is adjusted by any ECA approved by the Legislature and is also adjusted by the appropriate RCA for the specific district. Mr. Willmarth further discussed the operation of the Model salary schedule and the practice of adjusting the base salary for a particular staffing category by the Model amount provided for education and years of experience. In response to Committee inquiry, Dr. Stoddard stated in estimating experience premiums, the degrees were combined (bachelor, masters, doctorate degrees). Members encouraged Dr. Stoddard to further explore this issue and utilize a larger data set than Wyoming teachers if necessary. Mr. Cicarelli described the weighted Model average salary and stated the amount provided by the Model fluctuates in response to changes in staffing characteristics or changes in the RCA for a particular district. He added the Model resources each school district at different levels of staff based upon variables and to reflect differences in student population. Thus, a Model weighted average salary is necessary, in part, to make meaningful comparisons on a statewide basis. He stated any decrease in the weighted average teacher salary is largely due to changes in teacher experience and the RCA.

The Committee discussed the operation of the salary element as included in the Model currently, which calculates this portion of a district's guarantee by adjusting upward or downward based on the district's staffing characteristics compared to the average Model salary. Members inquired about the difficultly to modify the operation of this element to begin with a base salary amount and then adjust this amount by the appropriate dollar figure for education and years of experience. Mr. Willmarth responded this is his preference in building the new Model and it will allow for increased transparency for the school districts.

The Committee moved on to discussion of the statutory provision requiring the Model to be "locked" when provided to school districts. In response to inquiry, Mr. Willmarth stated the requirement for the model to be "locked" is an outgrowth from the Campbell cases, during which several Models were presented to the Court and it was nearly impossible to decipher which Model was the Legislative Model to Models modified by school districts or consultants. Mr. Willmarth stated there are likely sufficient safeguards that could be implemented to ensure this scenario does not occur again and that it is possible to provide an unlocked Model given technological advancements. He further indicated school districts could prepare their own "unlocked" Model with the documents and spreadsheets posted on LSO's and WDE’s website. Senator Rothfuss moved, seconded by Representative Sommers, to direct Staff to include in the recalibration draft bill the ability to the consider the release of an unlocked funding Model to school districts, provided sufficient protection can be established to ensure there is no confusion regarding the contents of the Model as adopted by the Legislature or the Model utilized by the WDE for purposes making payments to the school districts. The motion passed.

FUTURE RECALIBRATION WORK AND DECISION MATRIX Dr. Larry Picus and Dr. Allan Odden, Picus Odden and Associates, presented a work plan to the Committee related to the future work for the 2015 recalibration. See Appendix 11. Representative Berger moved, seconded by Representative Sommers, to approve the work plan and schedule for presentation of the elements over the course of the upcoming meetings. The motion passed.

SELECT COMMITTEE ON SCHOOL FINANCE RECALIBRATION Summary of Proceedings

Dr. Picus and Dr. Odden summarized the upcoming schedule for the 2015 recalibration and described the differences between the current Legislative Model and their evidence-based recommendations. There was significant discussion by the Committee about the charge of the consultants and the task of the Committee in conducting the 2015 recalibration. Members expressed concern regarding prior decisions by the Legislature on elements that will be presented to the Committee for input. Dr. Picus discussed their charge in relation to class sizes and minimum staffing recommendations and indicated they will provide a cost-based recommendation, remind the Committee of the current policy as adopted in the Legislative Model and then take direction from the Committee on inclusion of each element in the newly created Model. Dr. Picus stated this is the manner in which every element will be presented to the Committee. He added cost implications will also be presented for each element. Dr. Picus continued to list each element as presented in the work plan, including elective/specialist teachers (element 4), additional vocation/career technical teachers (element 5), minimum teachers (element 6), instructional facilitators and coaches (element 7). Dr. Picus discussed core tutors and tier 2 interventions (element 8) and the philosophy for calculating the resources for this element. Senator Rothfuss inquired about the difficulty in assessing tutor programs that are working in Wyoming. Dr. Picus responded stakeholder meetings will be held July 1 and 2 and those questions will be posed during the discussions. He stated an in-depth study is likely not possible within the framework of this recalibration effort. Staff added the WDE and the School Finance Data Advisory Committee issued surveys to the all school districts on various topics and questions as a result of the May Committee meeting.

Dr. Picus moved on to substitute teachers (element 9). Members requested investigation and explanation of teacher absences attributable to student activities when the element is presented. Dr. Odden responded the analysis will include explanation of the evidence-based recommendation and any additional data provided by school districts. Dr. Picus continued to list the elements to be considered, including core guidance counselors and nurses (element 10), supervisory and instructional aides (element 11) and librarians and media technicians (element 12). In reference to element 12, Members encouraged the consultant to include a robust analysis of information technology and the resource allocation necessary for this category. Dr. Picus added to the list of elements, principals and assistant principals (element 13) and school site secretarial staff (element 14).

He moved on to dollar per pupil resources, such as gifted and talented students (element 15), intensive professional development (element 16), instructional materials (element 17), short cycle and formative assessment (element 18) and technology and equipment (element 19). In response to inquiry about specific professional development requirements for Wyoming teachers, such as suicide prevention, Dr. Odden stated there are sufficient resources within the evidence-based recommendation to conduct an intensive and robust professional development program. Dr. Picus spoke about career and technical education equipment and materials (element 20) and extra duty funds and student activities (element 21) as additional elements to be considered by the Committee.

He discussed the resources for central office functions, including operations and maintenance (element 22) and central office staffing and non-personnel resources (element 23). He spoke about transportation (element 24) and food services (element 25). Members requested information regarding allowable expenditures and dollars per student or mile in presentation of the transportation element. Representative Harshman moved, seconded by Senator Rothfuss to amend the food services (element 25) as presented to include research for staffing and costs for all school districts, not just small schools and districts. The motion to amend the work plan passed.

SELECT COMMITTEE ON SCHOOL FINANCE RECALIBRATION Summary of Proceedings

Dr. Picus listed the resources and Model elements dedicated largely to assisting struggling students, including tutors (element 26), pupil support (element 27), extended day programs (element 28), summer school (element 29), English language learners (element 30), alternative schools (element 31) and special education (element 32). Members requested additional exploration of the "mobility" portion of the at-risk proxy, indicating that a one-day snapshot may not be sufficient to capture this element.

Dr. Picus discussed the presentation of information related to salary levels (element 33), health insurance (element 34), benefits (element 35), the regional cost adjustment (element 36) and the external cost adjustment (element 37). He also discussed school district school finance audits (element 38). Lastly, Dr. Picus stated preschool (element 39) and school safety and security will be explored (element 40). In relation to preschool, Cochairman Northrup requested the consultants also analyze half-day preschool. Members also requested exploration of increased coordination among agencies charged with some aspect of preschool services and early childhood education. Staff stated the Joint Education Committee will receive information related to preschool and the coordination of services and school safety and security. Senator Ross moved, seconded by Senator Nicholas, to eliminate consideration of preschool from the 2015 recalibration effort. After discussion by the Committee, the motion failed.

Cochairman Northrup requested public comment. There was no public comment in relation to work plan.

FUTURE SELECT COMMITTEE MEETING SCHEDULE Staff stated the next meeting of the Committee is scheduled for August 6 and 7 in Casper, Wyoming. The Committee engaged in discussion regarding an additional meeting in October and Cochairman Coe requested Staff poll the Committee for dates for an additional October meeting and stated dates for the presentation of the elements may be modified by Staff to accommodate an additional meeting.

ADDITIONAL COMMITTEE BUSINESS Representative Connolly moved, seconded by Senator Rothfuss, Staff draft legislation for the November meeting to improve the efficiency of the K-12 education accounts. Members discussed whether discussion and action on such a topic is within the purview of the Committee. After discussion, Cochairman Coe concluded the topic of was more appropriate for the Joint Revenue Committee or the Joint Appropriations Committee. There was no vote taken on the motion.

MEETING ADJOURNMENT There being no further business, Cochairman Coe adjourned the meeting at 4:00 p.m.

Respectfully submitted,

Senator Henry H.R. "Hank" Coe, Cochairman

SELECT COMMITTEE ON SCHOOL FINANCE RECALIBRATION Summary of Proceedings

Committee Meeting

Materials Index

Appendix Agenda Item Appendix Description Appendix Provider

1 Committee Sign-In Sheet. Lists meeting attendees. Legislative Service Office.

2 Committee Meeting Provides an outline of the topics the Legislative Service Agenda. Committee planned to address at meeting. Office.

3 Review of K-12 Education Memorandum on K-12 Education Legislative Service Funding. Accounts (June 5, 2015). Office.

4 Review of K-12 Education April CREG Report (April 29, 2015). Legislative Service Funding. Office.

5 Regional Cost Adjustment. Alternative Strategies for Regional Cost Dr. Lori L. Taylor. Adjustment. PowerPoint Presentation (June 29, 2015).

6 Regional Cost Adjustment. Wyoming Funding Model Regional Cost Legislative Service Adjustment Memorandum (June 22, Office. 2015).

7 Regional Cost Adjustment. Comparison of Median Household Don Dihle, Supervisor of Incomes Handout Information and Fiscal Services, Campbell County School District #1

8 Salaries. Wyoming Salaries PowerPoint Dr. Christiana Stoddard. Presentation.

9 Salaries White Paper Regarding Recommendations Don Dihle, Supervisor of of WASBO Recalibration Salary and Information and Fiscal Benefit Workgroup Services, Campbell County School District #1

10 Salaries. Model Salary Schedules and Weighted Legislative Service Model Average Salaries Memorandum Office and Wyoming (June 22, 2015). Department of Education.

11 Future Recalibration Work Decision Matrix and Recalibration Picus Odden and and Decision Matrix. Directives Memorandum (June 22, 2015). Associates.

SELECT COMMITTEE ON SCHOOL FINANCE RECALIBRATION Summary of Proceedings

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