Wyoming State of the State Address 2000
By Stateline Staff
CHEYENNE, Wyoming - Feb. 14 - Following is the partial text of Gov. Governor Jim Geringer's 2000 State of the State Address:
Speaker Bebout, President Twiford, First Lady Sherri, Supreme Court Justices, Tribal Leaders, distinguished legislators, staff, students, teachers and others watching by TV, listening statewide on the radio, or downloading from the Internet. Good Morning!
Mr. Speaker, thank you and the House members for your hospitality. Chief Justice Lehman I acknowledge your special guests, the third department of our government represented by district and county court judges from all around the state. Welcome to the Budget Session of the 55th Wyoming Legislature.
Mr. Speaker and Mr. President, please join me in welcoming two special guests this morning, Al Addison, Sr., Chairman of the Northern Arapaho Tribe, and John Washakie, Chairman of the Eastern Shoshone Tribe.
I have met several times with these leaders and other members of their tribes to discuss issues of mutual concern. For too long, we have allowed opportunity to pass us by as we have struggled, in isolation, to deal with the difficult issues that face us. Even though our traditions and cultures may differ in some respects, we each share the same vision: helping our citizens contribute to the future of the Reservation and, in turn, to the future of our State. By their special presence here today, we hope to continue the dialog of trust and understanding that we have begun.
These leaders, elected by their respective tribes, have come to meet with you, to share the hopes and dreams of their people. The issues that I will discuss with you, today, are just as important to the Tribal authorities as they are to you, the elected and appointed leaders of the State. Of particular and immediate concern are issues of water rights and taxation. The longer-term issues are education and economic development. Creating a future for our children, enabling affordable housing, providing excellence in education, and assuring the availability of and access to health care are goals that we find easy to share across our tribal and state citizens. I understand that all legislators are invited to join the Chairmen at a special reception to be held this evening. I encourage you to extend your hand in friendship and cooperation.
Wyoming's Vision Where Should We Be?
This year the decennial census will reaffirm that Wyoming is the least populated state in America. We are the state of high altitudes, low multitudes and great attitudes. We need that great attitude as we face the challenges of today in a way that will assure success for tomorrow. Wyoming people have an independent nature. But, with all the spaces between the places, here in the state, we have learned how to depend on each other. We are a team, each member with special talents, each with a shortcoming or two. As a team, we leverage strengths and minimize shortcomings. Together, as communities of Wyoming people, we can achieve what would be impossible to do alone. I challenge everyone listening today to think about the long-term future for Wyoming and to offer your personal best, as a member of the team, in creating that future. We desperately need your help in setting the foundation for a long-term solution.
In Lewis Carroll's book, Through the Looking Glass, Alice has an exchange with the Cheshire cat. When the cat asked Alice where she was going, Alice replied that she wasn't sure. To which the Cheshire cat replied "If you don't know where you are going, any road will get you there!" If we are to achieve a long-term solution for Wyoming's future, we must know, not only where we want to go, but also how to get from here to there: the direction, the road, and the conveyance. We must also be willing to demonstrate the level of passion and commitment needed to effect change.
We have been talking about a long-term plan for a number of years. During the past 12 months, we have written a long-term plan for Wyoming's future. We have done it as a team. We have also communicated our long-term plan across Wyoming communities. Frankly, I've had about enough rhetoric and I expect that you have too. It's time to stop talking and start doing something about securing a future for Wyoming.
Each one of us has a particular, and sometimes peculiar, reason for living in Wyoming. We also have visions of what we would like our state to be. We work, not only to develop the skills and the resources that will assure financial and spiritual security, but also to live our dreams. As Governor, I work at what I like to do in partnership with people that I respect and trust. My vision is for an even bigger partnership of Wyoming people working together, across communities, to build more and better opportunities for our children and grandchildren. Over and over in my visits to Wyoming communities, I hear your message- your vision for Wyoming. You have asked for more jobs that pay higher wages. You want better access to training and educational opportunities. You want safe communities and communities that are investing in growth and development. So do I! How, then, shall we proceed? How shall we move from where we are to where we want to be?
A Plan of Action Today to Deliver a Long-Term Solution for Tomorrow
In order to create a long-term solution we must make some difficult choices. Leadership is the art of leading people from where they are to where they ought to be. If we want to improve and diversify education and job opportunities, promote healthier families and safer communities, and invest in growth and development in Wyoming communities then each of us must be willing to bear additional responsibility. This may include a decrease in the availability of existing services, a change in the way that services have been delivered historically, or even new models of cost sharing between government and the citizens we serve.
The long-term solution that I propose, for Wyoming, includes the following four strategies:
- Limit the growth of government
- Reallocate and maximize current revenues
- Broaden the education tax base
- Improve customer service and enhance government accountability by focusing on results over process.
Developing the New Economy
Winston Churchill once said, "The further backward you look, the further forward you can see." We must not ignore our past but must carefully weave the best of the past into a plan for our future.
Wyoming's traditional economy has been dominated by the extraction and production of energy and raw materials, tourism and agricultural products. In order to build a more diversified economy, we must continue to invest in additional infrastructure that will support new and growing technologies. Wyoming's workforce will need to upgrade its skills and knowledge base in order to be competitive, in our region, in our nation and in the global economy.
What do I mean by the New Economy? The New Economy means that:
- Competition is relentless
- Technology is here to stay
- Knowledge builds wealth
- People are the most important resource
- There's no such thing as a smooth ride
- Alliances or partnerships are the way to get things done
- The location still matters, but now business comes to the worker, not vice versa.
The New Economy is characterized by a shift from traditional manufacturing to knowledge-based businesses. The common denominator for all business will be increased global competition and decreased regulation. Access to cutting edge research, venture capital, sophisticated communications networks and to pools of highly skilled workers will be standard requirements to sustain and grow businesses throughout the State. That's true for existing as well as for new businesses. Technology will be used, not only to leverage the production of products and services, but also to sell, market and distribute these outputs. While our national economy will continue to need Wyoming's ample supply of energy and raw materials, our goals for real wage growth and economic development in Wyoming will require a heavy investment in human resources, particularly in our youth.
Recommendation: Focus our energy and finite resources to leverage the current economy and to enhance our ability to compete in the New Economy.
We have worked to encourage and install additional fiber-optic networks and high-technology incubators. We have encouraged more reliable air service by supporting the relocation of Great Lakes Aviation to Cheyenne. Through the combination of state and federal funding, we have substantially increased traditional transportation and other infrastructure investments. We have focused on greater investment in workforce development and improving the quality of life to attract and retain employers from across the country. We continue to encourage Wyoming people to expand and innovate within their existing businesses. Equally important to growing the economy is improving the quality of education, ensuring that today's children have the skills to compete in tomorrow's economy.
The New Economy places a high value on knowledge and the ability to add value to a company through knowledge. That's why education is the centerpiece of my budget. But the New Economy needs some old fashioned economic support as well, such as a stable tax structure, competitive labor costs, access to capital and a favorable regulatory climate. New business spin-offs, particularly in manufacturing and technology, are more likely to occur if we have a high quality University that focuses on research along with undergraduate and graduate education.
The Wyoming Business Council
Broad-band connectivity using technology. Reliable air service. Quality workforce. These three are the vital signs of the New Economy. But they only shape the foundation. Beyond that, we need professional assistance and guidance for our communities and for our businesses to help them grow and be competitive. If we hope to meet or to exceed the capabilities of the competition, we must have a support structure such as the Business Council. You, the legislature, created the Business Council not because the governor wanted it. You created the Business Council because your neighbors, your businesses, and your communities demanded it.
The Business Council has made a good start. It can and will do better. The Wyoming Business Council was created to end fragmentation of state and local economic development efforts. They developed a long-term plan based on a vision of targeted growth and quality of life. They have helped our communities design what they want for growth in jobs and income and define who will make the design work.
Wyoming's young people deserve a better chance at success. Wyoming's families deserve a higher level of income. The Business Council has brought together the people and the processes we need to help our communities achieve these goals. Now it's your turn.
Recommendation: Give the Business Council the guidance you believe they lack, give them the resources they need to do the job and give them your support. The criteria for success aren't whether the Business Council gets a budget by the end of this session. The real criteria must focus on giving Wyoming's people a chance to succeed.
Identifying the Challenges
If this is the Budget Session, we must be talking about a deficit. Where are we in terms of a budget crisis?
A year ago, during the 1999 Legislative Session, you enacted Section 335 in the appropriations bill. The language of this section provided for an assessment of state revenues and expenditures. Nearly every one of you participated in a joint legislative-executive review of state programs, services and the money to fund them. The big picture, or "Macro" report came out in May with a summary of over 100 reports that had previously studied some part of the state's revenues and expenditures. The Macro Report stated that the anticipated deficit facing us this year would be $127M, assuming no change in salaries, education, health services, corrections or troubled youth programs. The report also stated that the underlying deficit was really $183M if we looked beyond the cash carryover in reserves.
Today the $127M shortfall that was forecast last spring for the 2001-2002 budget period has shrunk to zero. Though the pressure for change is not as noticeable, the long-term deficit remains. The underlying deficit is still at least $183M and could be over $200M two years from now.
The final report that we published last September acknowledged that the deficit would reoccur if long-term solutions were not put into place. That study compiled the results of the review of over 220 state programs and concluded that no significant program reductions could be made. The single most significant finding was that Education was driving the shortage of funds.
The budget that I prepared and submitted to you in December was based on your participation and recommendations. I gave you one budget with a road map on how to balance within existing revenues and current law. I also gave you a second budget that provided strategies for a long-term solution.
Recommendation: I strongly recommend that you look beyond the next two years, to the longer-term.
How much will be spent in the future?
I refer you to the charts in the printed copies of this message that are titled "General Fund Revenues and Expenditures-Total." These spending projections are intended to give you the best, the medium and the worst-case scenarios for the state over the next eight years. The best case, titled "low" shows that after 2004, the biennial deficit will be approximately $200M. Is that really the best case? Is it even the likely case? I don't know. But, if you look at the trend of past revenues and expenditures, the trend is much more like the Medium case, which forecasts that expenditures will increase at an alarming rate compared to income. Two years from now, the deficit would be $150M and by the year 2008 the biennial deficit would grow to nearly $600M.
I didn't make these numbers up. The revenue numbers are taken from the Consensus Revenue Estimating Group forecasts. The expenditures are taken from the Final Report of the Oversight Committee that presented the Revenue and Expenditure Report. That final report assumed that the expenditures for this biennium would be the same as what they were in January 1999. The assumptions didn't forecast the increases we're experiencing in Education or Corrections.
Perhaps even more sobering are the charts, at the back part of my written message, that show major areas of expenditure. If education expenses were to stay constant over the next eight years, they would still amount to 44% of the total general fund. But if they grow at the same rate that they have over the past eight years, education would consume over two-thirds of the entire general fund, a 50% increase in general fund support for education as compared to today.
Additional charts in the appendix to this message show that the other big expenditure areas of state government will grow, but that their demand on the general fund is nothing nearly as dramatic as the demand from education. Even if Corrections were to grow at a rate faster than this year, its impact is relatively small by comparison to Education. The last category, expenditures in General Government, is flat and its impact on the general fund is lost in the noise level. In fact, if you removed my recommendations for salary adjustments, the cost of General Government, or "Other" expenditures would continue to decline. It's the only area of government that has held the line, yet it would be hit the hardest by the proposed cuts in the Joint Appropriations Committee recommendations. I ask you not to punish these good managers any further.
Recommendation: Give agency personnel the recognition they deserve, for their efforts in increasing efficiencies, by restoring the 200 series cuts.
The reason for these forecasts is to demonstrate that today's deficit is masked by a temporary reprieve. You have a choice. You can patch things up in the manner and tradition of the past twelve years and go home. Or, you can recognize the inherent weaknesses in our revenue system and enact a long-term solution.
Recommendation: I strongly urge you to pick the long-term approach.
The Big Four As I have traveled around Wyoming visiting with your neighbors, I hear a lot about cutting government. I also hear that we should put more money into education and economic development. Just where does the state's money go? Where do we spend the most money?
Four big categories of spending dominate the state's budget:
- Education, which includes public schools, community colleges and the University, consumes 44% of the general fund budget.
- Health care, primarily for low-income citizens, takes another 24%.
- Public safety, which includes the Corrections system, the judiciary and the public defender, takes 13%.
- Human resources, dominated by programs in Family Services, totals 7%.
The total for just these four functional areas is 88% of my budget recommendation. The reason that current and past legislatures have been unable to cut government spending is that these programs are people centered. Any substantial reduction would severely impact people, especially those who are least able to provide for themselves.
The remaining three functional categories of spending are:
- General Government, which includes such departments as Audit, Revenue, Board of Equalization, the five elected officials and the Legislature; 7% of total general fund spending.
- Natural resources, which include the state lands office, state engineer, Department of Ag, DEQ and water development; 3% of general spending.
- Economic Development, which includes state parks, cultural resources, fire prevention and the Business Council; 2% of general fund spending.
The Business Council, by itself, is allocated approximately 1% of the budget. One-half of that amount is dedicated to Tourism and Promotion.
The inherent and long-term deficit in general fund revenue is between 15 and 20% of the budget. Even if we were to eliminate all of General Government, Natural Resources and Economic Development, we would not have balanced the budget. That stark and dramatic statement illustrates the false, but common, misconception that government is a bloated bureaucracy.
Education and growing the economy are the two things people talk to me about the most. We spend over a thousand times more money on education than we do on economic development. Yet we speak little of the accountability for education and much about accountability for the Business Council.
Clearly, education is driving the deficit.
That's not a criticism, only a statement of fact. Why are the costs so high? How high will they go?
Looking at the forecast of education expenditures, the cost of education will continue to go up, particularly if we have the economic recovery that we want. The chart shown in your message book illustrates that student enrollment in grades K-12 peaked in 1985 at 103,000 students.
Today, fifteen years later, Wyoming has about the same statewide population as we did in 1985, but the student enrollment in our schools is below 89,000 students, a decline of over 14,000 students.
The message is twofold: first, the total number of school age kids is declining while the total cost, per student, continues to increase; second, the number of young families with children in Wyoming continues to decline. If we were to achieve our goals of economic growth, we would have a higher percentage of young families with school age children. Considering that the total combined state and local expenditures per child is over $7500 per year, the addition of another 10,000 kids over the next ten years would add $75M per year or $150M per biennium to the state's budget just for the increase in student count. We must realize that any new revenues will be an education tax.
Put in a different perspective, if Wyoming today had 103,000 students, as we did in 1985, the education budget would be another $195M short in comparison.
Do we want that kind of student growth? I believe we do because it reflects the vitality of Wyoming, the opportunity to be competitive. That trend by itself is ample justification for broadening Wyoming's tax base. I've been told time and again that people are willing to spend more on education and some other state services, but they are not willing to tax themselves. The prevailing opinion is that somebody besides "me" should pay!
Recommendation: We must link our goals with our revenue systems and broaden the base to include an education tax.
School Finance Litigation
The education agenda that you adopted beginning in 1997 is reflected in my budget this session. We have spent an enormous amount of time, talent, energy and money responding to the solution dictated by the Supreme Court in 1995. That decision has been a source of great concern as well as serving as a catalyst for change. The 1995 decision provided direction for constitutional compliance and specified minute details of education policy that are arguably outside the prerogative of the judiciary. Nevertheless, the issues have been litigated ad nauseam, and are now back in front of the Supreme Court. I report to you today that of the 21 legal issues, decided by the District Court of Cheyenne, 17 of them have been decided in favor of the State, which is to say, in favor of the legislative directives you have in place regarding school finance. Of the remaining four issues, the one specifying that schools within a quarter of a mile of each other cannot qualify for small school funding, is being phased out, as the law has been removed.
The three remaining issues that were ruled unconstitutional by the District Court are of great concern to the legislative and executive branches. These issues could easily be found to be constitutional by the Supreme Court. The three dealt with small school adjustment, the small district adjustment and the cost of living adjustment. Judge Kalokathis stated in his decision that "After considering the parties' respective studies, this court finds that the State has met its burden of proving that the revised school funding system is adequate to provide the basket of educational goods and services to Wyoming's students." (Decision, p.10, Para.2). I interpret that statement to mean that the funding system, which you, the elected representatives of the people adopted, is adequate to provide for our kids' education. You are to be congratulated for that achievement.
In 1995 you were presented, by the Supreme Court, with a giant and complicated puzzle, which you have successfully solved. I now hope that the Supreme Court will see fit to restore and accredit that part of your work dealing with small schools, small school districts and the regional cost of living adjustments. Those are three important pieces of the puzzle. As with any puzzle, if pieces are removed the picture is incomplete; and, so it is with the school finance picture. The judicial branch must be sensitive to the law of unintended consequences.
In his order, Judge Kalokathis recognized the reality that we will never have perfection in the development of a cost-based model. He specifically referred to "the limitations inherent in any cost of education model. The model cannot accurately reflect the exact cost of education, and large portions of the model are the product of professional judgment; both of the model's designers and of Wyoming educators who contributed their expertise to its design." (Decision, p. 12, Para. 4)
Everyone in Wyoming has an interest and an investment in our small schools and our small districts. I assure the people of Wyoming's smallest towns and rural areas that we will vigorously defend the historically important concept of local control and adequate funding for small schools and small school districts.
Mr. Chief Justice, you and your colleagues are faced with a critically important task in reviewing the Wyoming legislature's work product on school finance reform. Much is at stake for all three branches of government and much is at stake for our citizens. I urge your careful and expeditious consideration. We look forward to an early and final decision.
Improving the Quality of Education
Let's not become distracted by the cost of education. Rather, let's focus on what the cost should yield and then focus on accountability for the dollars spent.
Education at all levels is my number one priority. My goal is the same as that of your Superintendent of Public Instruction, Judy Catchpole. Judy speaks passionately of how everything that happens in our public schools should focus on one thing- student improvement. Education is the foundation upon which everything else is built. It is the key to Wyoming's mastery of the social, personal and economic goals of the new millennium. Education, training and skills today account for 75% of the nation's wealth and growth and 50% of all capital spending. Our knowledge-based economy is creating tremendous competition for high quality human resources. Business can't find enough skilled workers. We have worker shortages in every field of employment. We need to increase the potential of every person in Wyoming.
Recruiting and Retaining Qualified Teachers
Teacher quality is the greatest factor in student achievement. And, we know the risk of losing some of our best and brightest teachers is increasing. The competition to hire quality teachers, in all employment sectors, is at an all time high. What are we doing to enhance recruitment and retention in Wyoming? We are using technology to create a virtual academy to provide on-line professional development opportunities. The University of Wyoming has established mentor programs to help new teachers through the difficult early years. In addition, the State Professional Teaching Standards Board has received a three-year federal grant worth over $2.7M to evaluate how to recruit and retain teachers in rural areas, including teachers on the Reservation. You, the Legislature, have offered bonuses to teachers who achieve certification through the National Board for Professional Teaching Standards. The funding model you adopted for the schools includes support for professional development. Now the challenge will be to assure that we have proper preparation and evaluation programs from the University of Wyoming to the K-12 classroom level.
You directed that standards for student achievement be set in twelve academic areas. The State Board of Education has adopted several already. I support the direction you have established and further support Superintendent Catchpole's advocacy for maintaining those high standards. We must be clear on what it is that we want our children to know.
Recommendation: Don't change the statutes that establish education standards.
In turn, we should be able to tell what our kids have learned and how well they have learned it. Wyoming educators, business people and parents all helped design the statewide accountability tests known as the Wyoming Comprehensive Assessment System, or WyCAS. These tests do measure learning. Their purpose is to decide how that learning can be improved. The goal is to build a foundation, not to find fault. What we discovered in the first round of testing is that only about a third of our students are proficient or above in the fundamentals of education: reading, writing and math. Should we be alarmed? No. But we should be concerned enough to aggressively work for continued improvement.
Recommendation: Don't change the assessment statutes.
In 1997, you directed that all schools should be connected to a learning network such that all schools would have access to the Internet and that our high schools would have voice, data and video connectivity. My budget recommendation includes the funding request to move the process along to the next level of implementation. Another first for Wyoming occurred when schools opened their doors last fall. We were the first state to document having ALL of our schools connected to the Internet. Several states have a high degree of connectivity but we were the first to prove that all our schools are connected. By the end of this year, we will also have two-way interactive video capability between and among all of our high schools, our community colleges and the University of Wyoming.
Technology properly applied is never an end in itself. It should and must be used to enable our schools to improve the process of education, both for academic and administrative purposes. Technology properly applied will give teachers the gift of time and students the gift of discovery learning. In addition, parents and prospective employers will receive the gift of demonstrated achievement in ways that would not otherwise be possible.
We recognize that education starts before children enter school. Children who receive care and attention from birth have a tremendously increased chance for success when they enter school. We must continue to improve the quality of early care and education, supporting parents as children's first teachers and assuring access to proper nutrition and health care. I encourage and support the work of the Governor's Early Childhood Development Council.
I continue to support Wyoming's role as a leader in the use of the Health Passport, or SmartCard, to help deliver nutrition, health care and early childhood education in Wyoming. We are the center of attention on how this relatively simple use of technology will enhance access to and quality of health care for families at risk.
As a result of the Newborn Screening Program that you adopted, we can point to several examples of children who will develop at a normal rate. In the past, hearing problems were not likely to be detected until the child was at least two years old, and in many cases, even older. We now screen nearly all of the 5500 births in our state. Of those screened, 3% are referred for further evaluation, and when needed, appropriate treatment is provided.
Reading is such a critical factor in educational success. Improving the literacy skills of our children is the gateway to their successful future. I support the commitment of additional state resources to helping all children read at grade level, especially in the early grades.