Property taxes are the primary source of funding for the K-12 public school system.

When the Wyoming Supreme Court declared the state’s system for funding public schools unconstitutional, one of the key points was the unequal distribution of funds due to the variance in assessed valuation from school district to school district.

To move toward a more equitable distribution of funds in response to the court decision, school districts’ reliance on local funding sources must be reduced.

Until 1997, school districts could levy up to six "optional" mills -- three for operations and three for capital outlay. The optional mills were strictly local mills that districts could choose to levy upon themselves. Generally, poorer districts levied more optional mills in an effort to boost their revenues, while districts which already had substantial revenues imposed fewer or no optional mills.

During the 1997 special session on education, the Legislature enacted a bill repealing the optional mills, but allowing local school boards to impose up to six optional mills for only one more year. The Legislature also provided that those districts which imposed all six optional mills would not experience significant budget cuts under the new state financing scheme the following year.

The demise of the optional mills on July 1, 1998, meant a reduction in property taxes in the districts levying optional mills. To keep property taxes relatively level and raise needed state funding for education, the Management Council proposed HB 1004, a one-mill statewide property tax levy, to be distributed to even out school funding.