WASHINGTON, D.C. — Wyoming’s congressional delegation, governor and top education official are hailing new federal legislation that would free up investment opportunities for the state’s education $5.4 billion trust fund. They say it could lead to higher returns and stave off tax hikes.
“This is a game-changer for Wyoming's public schools,” Superintendent of Public Instruction Megan Degenfelder said in a statement. “By modernizing our investment policies, we are unlocking the full potential of our school trust lands. It is a common-sense solution that is anticipated to provide a sustainable increase in funding for our classrooms, without raising taxes.”
Wyoming Republican U.S. Sen. Cynthia Lummis is the lead sponsor of the Wyoming Education Trust Modernization Act.
In a statement to Cowboy State Daily, Lummis said an act of Congress is necessary to make the changes sought by state officials because the 1890 federal law by which Wyoming became a state.
‘Modernize’ With “Strong Protections’
“Wyoming's school trust fund represents one of our state's most valuable assets for supporting public education and the next generation of cowboy students,” Lummis said. “My legislation would allow Wyoming to modernize our investment policies while maintaining the strong protections that have served this fund for more than a century.”
The 1890 law refers to school lands, but Lummis spokesman Joe Jackson confirmed that the legislation does not involve changing policies related to buying or selling of such lands; rather, to how certain monies can be invested.
Wyoming’s State Act of Admission, established by Congress upon statehood in 1890, governs “how the state manages federally granted school lands,” according to Lummis’ office.
“Proceeds from school trust land sales, exchanges or disposals must be deposited into a permanent land fund under strict federal regulation,” it says. “Current law prohibits investing principal funds, and only accrued interest can be used for K-12 education funding.
“The bill preserves all constitutional protections for education funding while maintaining principal protection. Only investment returns can be spent, which keeps all existing controls on land disposal and exchanges unchanged, fully maintaining the longtime permanent trust fund structure."
Wyoming's permanent school trust fund currently holds $5.4 billion and generates about 5% annual interest under current investment restrictions.
“Enhanced investment flexibility could significantly boost annual education funding without touching the principal,” the statement says, adding the new legislation could potentially increase returns from 5% to 8.3%.
Gordon: Long Overdue
“This long-overdue proposal is a natural extension of some of the reforms I undertook while serving as state treasurer,” Gov. Mark Gordon said in response to announcing the bill. “I support this effort to generate additional returns for Wyoming schools while preserving the permanent trust fund structure.”
State Rep. John Bear. R-Gillette, called giving the state more control of its own investing is overdue.
“Since Wyoming became a state, financial markets and investment strategies have evolved dramatically,” theCampbell County Republican said. “Today, responsible and prudent management of public funds requires far more flexibility than was imaginable in 1890.”
Others agreed.
"Wyoming’s students deserve every opportunity we can provide, and that starts with strengthening the long-term stability of our education funding,” said U.S. Rep. Harriet Hageman, R-Wyoming.
U.S. Senate Republican Whip John Barrasso of Wyoming said state officials have “done an incredible job investing in the future of our students.”
“The Wyoming Education Trust Modernization Act will help build on this success by giving our state more flexibility when it comes to investing our permanent school land fund,” he added.
Sean Barry can be reached at sean@cowboystatedaily.com.
