CHEYENNE - A Wyoming Supreme Court ruling Friday allows five school districts to keep nearly $100 million in local property tax revenue despite a constitutional amendment aimed at getting the districts to hand over all of their local revenue to the state.
The amendment's approval in 2006 empowered the Legislature to change state law so the state could collect the money. The Legislature didn't change the statute until earlier this year, however.
The districts argued that in the meantime, they were entitled to keep part of their local revenue in accordance with a state law dating to 1983. They said the amendment by itself hadn't overridden the law.
The justices agreed. They said the amendment didn't override the existing law because there was no "obvious, clear and strong conflict" between the existing law and the amendment.
"As a general rule, a statute in effect at the time of a constitutional amendment is not affected unless the amendment expressly abrogates the pre-existing rights contained in the statute or unless the amendment is clearly and irreconcilably in conflict with the statute," the justices wrote.
State Superintendent Jim McBride said he was OK with the ruling.
"We will act accordingly," he said. "Certainly no hard feelings here."
The Wyoming Department of Education had argued that the constitutional amendment always trumped state statutes and the Legislature didn't need to write a law that conformed with the amendment.
The case began when the districts refused to hand over all local revenues in response to the amendment's approval, prompting the education department to sue the districts in 2007.
The Legislature considered changing the law to conform with the amendment in 2007, but didn't do so until earlier this year. In the meantime, the districts - in Pinedale, Big Piney, Gillette, Shoshoni and Kemmerer - withheld $97.6 million over the two-year period.
The Pinedale district withheld about $60 million. The district has spent some of the money to meet its contractual obligations in building an aquatic center and elementary school addition, according to Superintendent Doris Woodbury.
Woodbury said she was pleased by the ruling.
"It seems very clear, very transparent, that the language was permissive in the amendment and the Legislature needed to pass enabling legislation," she said.
Campbell County School District in Gillette withheld $21.4 million in an interest-bearing account, according to business manager Don Dihle. He said the district hadn't decided how it would use that money.
"Now that the suit is settled, we'll begin discussions and decide how to best spend the money to impact all of our students in the most positive way," Dihle said.
The school district in Big Piney has kept about $19 million. Superintendent Gerry Chase said he was glad the lawsuit was over.
"The challenge lies ahead of us to appropriately use these funds for the needs of our students," he said.
The school district in Shoshoni withheld $2.74 million and the district in Kemmer $207,000, according to the Legislative Service Office.
The school district in Rawlins also was entitled to keep a small amount of local revenue under the state law, but didn't do so after the amendment passed and wasn't involved in the litigation.
Besides contesting whether the change sought by the amendment went into effect with the amendment's passage, the five districts said the state couldn't throw a wrench into their budgeting process midway through the budget year. The justices said their ruling made that question moot.
The dispute originated with school finance litigation in the early 1980s and the first law requiring districts to send their local property tax revenues to the state for equitable distribution to all districts on a per-student basis. The law included a provision allowing districts that brought in much more local revenue than the state average to keep some of that money.
The provision didn't have any effect on school funding until 2000, when booming gas production made the Pinedale district wealthy enough to allow it to begin keeping some of its own money. Other districts followed as energy development boomed elsewhere in the state.
Posted in Breaking on Friday, December 19, 2008 12:00 am
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