The roots of the current issues in equalization of public school funding go back for decades. However, the proximate cause of the current dispute was an earlier lawsuit, Herschler v. Washakie School District #1, decided in 1980.

In Washakie, the Wyoming Supreme Court held that funding of public schools relied too heavily on local wealth, resulting in huge disparities of funding per child, depending on whether the child resided in a rich district (usually one with mineral production) or a poor district.

The justices ordered the Wyoming Legislature to devise a school funding system that would provide essentially the same amount of funding per child, regardless of residence.

The Legislature then established the School Foundation Program to equalize school funding. Federal mineral royalties and school lands income deposited in the School Foundation Program were then distributed to supplement the budgets of poorer districts.

The system also required districts with revenues beyond a certain amount to pay some of the extra money into the School Foundation Program, although these districts remained wealthier than most others. These were referred to as "recapture districts."

The distribution of funding from the School Foundation Program took place according to formulas devised by the Legislature which, among other things, distributed more funds per student to smaller districts than larger ones, on the theory that larger districts enjoyed some economies of scale. The Legislature was supposed to conduct studies to verify this theory, but never did.

Finally, in October 1993, four large school districts and the Wyoming Education Association (WEA) once again sued the state, alleging that the formulas developed after Washakie were invalid and were unjustly depriving students in the larger districts of equal funding.

The four large districts and WEA won only part of their case in an initial district court decision in November 1993, but they ultimately prevailed in November 1995 when the Wyoming Supreme Court unanimously struck down the entire K-12 funding system as unconstitutional.

The Court directed the Legislature to: (1) define the "basket" of education every Wyoming child should receive - the best we can do, not just a minimal education; (2) undertake cost of education studies to determine the actual cost of providing the basket in the various sizes and types of school districts, taking into account the needs of different kinds of students; and (3) fund the basket -- in that order.

Elaborating on these points, the justices noted that the restructuring of the system should not involve transferring money between districts; rather, there should be a pie large enough to fund the total need, so there would be no "losers" in the system.

The Court described five criteria for a quality education, including:

• small schools, small class size, low teacher/student ratios, textbooks, low personal computer/student ratios;
• integrated, substantially uniform curriculum decided at the state level with input from local boards;
• appropriate provisions for at-risk, special problem and talented students;
• standards for course content and knowledge attainment with the goal of equipping all students for entry to the University of Wyoming, the community colleges, or other educational programs;
• assessment of students’ progress in core curriculum and skills.

The Legislature hired a consultant to perform the cost of education study, which became known as the MAP study (for Management Analysis and Planning Associates, the name of the consulting firm). The MAP study looked at the actual costs in specific districts around the state, and also developed several hypothetical districts and prototypical school models to come up with cost estimates.

The MAP study became controversial, with its supporters asserting that the models accurately reflected costs, while its detractors said costs were over- or under-estimated because the models were based on what schools are spending now, rather than what they should be spending. However, the MAP study became the basis for the Legislature’s 1997 special session actions.

During the 1997 special session on education, the Legislature made changes to the school finance system to comply with the Court’s order, such as eliminating the local optional mills after another year (see discussion under Property Tax in the Taxation and Revenue section) and trying to provide enough state funding to "hold harmless" all districts (not cut any district’s previous state funding).

The 1997 special session legislation also provided for a statewide student assessment program, a technology plan, and a basket including a maximum district-wide average student/teacher ratio in grades K-3 of not more than 20:1(when practicable).

However, for political reasons, the majority of legislators were unable to let go of other aspects of the old system, such as the extra funding for small schools. They were also unable to define the basket first and fund it second, so they imposed statutory caps on increases in school funding.

The end result was approximately $29 million in new funding for education, compared to the MAP recommendation of $76 million.

Finally, the Legislature did not deal with a number of issues -- some with significant financial consequences -- such as funding for vocational education, at-risk students, students who are economically disadvantaged and/or have limited English speaking ability, gifted and talented students, capital construction, and teacher compensation.

Unhappy with the Legislature’s actions, both large and small school districts and WEA returned to district court, which rendered a December 1997 decision basically favorable to the plaintiffs.

The district court upheld the general methodology of the MAP models, and found that the 1997 legislation provided sufficient funding for elementary education.

However, it also held that the state failed to prove it had provided sufficient funding for the middle and high school baskets. The district court declared unconstitutional the caps on increases in school funding, as well as the small school adjustment. The district court also withheld judgment on several other issues, pending further legislative action.

The Legislature gained a reprieve on financing school capital construction when the district court extended the deadline for establishing a new system until 1999.

The district court decision led to a combination special session on education and budget session for 1998.

The combination session ran five weeks instead of the usual four for a budget session, and the education bills did not require the two-thirds vote usually necessary to gain introduction of non-budget items in a budget session.

Three major pieces of school-related legislation were considered in 1998:

• SF 16, School buildings and facilities - maintenance (funding for deferred maintenance and non-routine, major maintenance);
• SF 38, School buildings and facilities (proposing a new system for funding school capital construction); and
• SF 54, School finance - amendments (changing the 1997 special session legislation).

These bills are described in more detail below. None of them resolved the issues outstanding in the school finance litigation, so following the 1998 session, both large and small districts and WEA renewed their legal challenges. The case will be heard in district court beginning in August 1998.