Suit against SCSD #1 dropped
Following Cheyenne hearing, state withdraws complaint over disputed monies
by Janet Montgomery

Sublette County School District #1 (SCSD#1)board members got good news on the pending lawsuit filed against the district over last year’s over-the-cap monies, which the state says the district owes the Wyoming Department of Education.

“Our lawsuit against the State Department of Education is the only one that’s out there ... on this issue ... at this point in time,” said Superintendent Doris Woodbury.

Woodbury told five members of the school board last Thursday night that a hearing in the First Judicial District court on July 27 in Cheyenne ended in the district’s favor.

“This was a restraining order to keep us from spending any money, any of the disputed funds,” Woodbury said Monday of the July hearing. “Basically the judge found their request for a restraining order to be without merit. ... Since (the) suit was the exact same arguments, they have withdrawn their suit from the districts.” Woodbury said that the restraining order was filed after the DOE filed its suit against the district.

“The restraining order and the suit contained the very same arguments,” she said. “The restraining order was for the purpose of having the rebated recapture districts (stop) spending their money immediately.”

The DOE filed suit against the school district earlier in July, but not until after Sublette County School Districts #1 and #9 filed suits against State Superintendent of Public Instruction Jim McBride on July 12 in the Ninth Judicial District Court in Pinedale.

Shortly after, other recapture districts filed to join the suit against McBride. Woodbury said that the DOE wanted to keep the over-the-cap or “recapture” money, and retain any interest earned on those dollars since the November election when Wyoming voters cast in favor of Amendment B.

Before Amendment B passed in November 2006, the over-the-cap money was the “excess” special property tax revenues, of which 75 percentwent to the state and 25 percent stayed in the generating district. The amendment passage changed the Wyoming Constitution wording to remove “of not more than three-quarters,” so that it now reads “The Legislation may also provide for the distribution among one (1) or more school districts of any revenue from the special school-district property tax in excess of a state average yield, which shall be calculated each year, per average daily membership.”

However,while the constitutional wording changed, SCSD #1 Business Manager Vern McAdams said, Wyoming legislation that determines how much money stays in the recapture districtshas not been altered. The statute that allows for the 75percent of the tax to be rebated, leaving 25 percent in the taxing district, was enacted in 1983. The Sublette County districts’ suit says that the amendment change clearly gives the Legislature the discretion to provide revenue to one or more districts at any percentage: “the Legislature could elect to distribute that money back to only recapture districts, to any one particular district,or to all districts, if it so chose.”

By not repealing or amending the statute, the suit says “the Legislature effectively determined not to require repayment from the rebated recapture districts of more than (75 percent) of the rebated revenue.”

On July 27, First Judicial District Court Judge Pete G. Arnold heard arguments for a restraining order that the state filed against the Sublette County districts to keep them from spending the disputed money. McAdams said, “(Judge Arnold)was pretty tough on them actually. … He really told them they didn’t do anything like they should have.”

McAdams said that the state gave the district no help or forewarning of what it was going todo if the amendment passed last year. “(To) come in the middle of the (school) year and say ‘you are going to pay us now’ is unreasonable,” he said.

Woodbury said that after the restraining order was soundly beaten, the DOE withdrew its lawsuit that had the same arguments as the restraining order.

In Pinedale, Ninth Judicial District Court Judge Nancy Guthrie will preside over the suit filed by the local districts. The action filed by the county districts against McBride asks the court to find McBride without authority or power to interpret the constitution and Wyoming laws in an administrative hearing, but rather to have the court system decide who gets the over-the cap monies.

Court documents indicate that the districts’ lawsuit against McBride arises out of the actions of McBride, when he “erroneously” interpreted and “retroactively” applied the constitutional provisions, and that McBride “unlawfully and inappropriately demanded” the excess money (of about $36 million) to be paid to the Wyoming Department of Education, contrary to state law.

The DOE collected more than $67 million of the $103 million excess funds from SCSD#1 last year.

Woodbury noted that the big issue is not whether or not Pinedale gets to keep the money, but rather, “what is the state going to do with the money once they take it.” “Prior to the election State Sen. Hank Coe and others talked about using these dollars (that are specifically levied for education) for things like roads and other projects,” Woodbury said. “The people of Wyoming voted for Amendment B based on the wording that made it sound like other school districts would actually get some of these funds. We have had districts ask us “when were they going to get their money?’”