Perspective
A particular way of viewing things that depends on one’s experience and personality.
By David Eaton & Peter Glenshaw
THE LEADS: Wyoming’s “Best in the West” K-12 educational system depends upon taxes paid by the state’s energy industry for its nation-leading level of per-pupil spending. Long a reliable source of revenue for Wyoming schools, the entire fossil fuel industry is in decline. Wyoming’s budget is in deficit and, as David writes, its historically tax-averse political leaders are confronting the challenge of funding a public school system it can’t currently afford.
And, Peter writes about a dairy farm in Vermont that has no cows but has still managed to attract millions of philanthropic dollars over the past two decades. It’s a topic that doesn’t get much attention: philanthropy gone wrong.
The Details…
Wyoming is the least populated state in the country—fewer than 600,000 people live there—but it is a giant when it comes to K-12 school funding.1 The Cowboy State spends more per pupil annually than all but eight other states and the District of Columbia. It regularly earns high marks for the equity of its statewide K-12 funding model. 2 3
It wasn’t always so good—or fair—for Wyoming’s public schools. In fact, the state’s Supreme Court found the entire “K-12 school finance system unconstitutional” in 1995, and ordered that “the state financed basket of quality educational goods and services available to all school-age youth must be nearly identical from district to district.” 4 The practical effect of the court’s decision was the creation of a new school financing mechanism that ensured an equitable distribution of funding across the state’s K-12 districts and vaulted Wyoming to the top ranks of per-pupil spending. 5
Wyoming has no state income tax, and low property and sales taxes. It relies on taxes, royalties and other fees paid by the extractive industries—primarily coal, but also oil and gas—for revenue to support its general fund and K-12 education spending.
“Essentially what Wyoming did was export the cost of its education system to people outside of Wyoming,” education policy consultant Richard Seder told the Hechinger Report, a non-profit news organization covering education. 6
It has worked pretty well until now.
The US uses less coal today than it did a decade ago. 7 That’s good for the environment but not for Wyoming’s bottom line. Coal production is down about 40% since 2008 and declining energy use during the pandemic accelerated that trend. 8 According to Wyofile.com, “severance taxes” paid by the extractive industries generated about $2 billion in revenue for the state in 2007-08, but only around $800 million for the current budget cycle. 9 “Unfortunately, the predictable bust cycles [in the fossil fuel market] have brought the chickens home to roost,” said Seder.
Governor Mark Gordon imposed cuts on state agencies last year and his revised budget—currently working its way through the legislature—contains an additional $450 million in reductions. 10 Wyoming’s “rainy day fund”—estimated at $1.5 billion—will help cover short term deficits. Among the state’s long term fiscal challenges is a $300 million “structural deficit” in education funding that defies an easy solution. The 1995 court case that changed the way Wyoming funds education effectively limits the legislature’s ability to cut the education budget and will likely force it to find other sources of revenue to make up for the shortfall.
Calling education funding “the elephant in the room” during his State of the State Address March 3rd, Gov. Gordon also said: “We cannot simply wait until we are out of money before taking action. This is far more than a budget issue, and I want our stakeholders and our communities to be involved in establishing a plan and vision.”
What that vision looks like remains to be seen. But it does appear the people of Wyoming will soon have to choose between low taxes and a “Best in the West” K-12 educational system. 11 Perspective will keep you posted.
Million-dollar mistakes in any business usually draw attention (think athletes, corporate mergers, environmental disasters and financial fraud). But in philanthropy, they’re as quiet as it’s kept.
I mention this because a recent article in my local daily paper revealed, perhaps unwittingly, the story of a gift gone bad. Not once. Not twice. By my reckoning, this gift appears to be on track for four instances of “oops.”
The story begins with small dairy farm in Norwich, Vermont, a wealthy town across the Connecticut River from Dartmouth College. Owned by a former corporate CEO and Dartmouth alumnus, Andy Sigler, the farm first attracted attention when the owner converted the property into what he hoped would be model for dairy farms in the state and asked for a gift in 2001: namely, that the property be exempt from taxes because it would publicly benefit the state of Vermont. 12
A legal battle between the owner and town ensued. It was ultimately resolved by the Supreme Court of Vermont, which ruled in favor of the owner. This initial gift removed a $2.2 million property from Norwich’s tax rolls.
The second gift occurred nearly 15 years later in 2015 when Sigler donated the farm to Vermont Technical College, part of the Vermont State College system. 13 The goal of the donation was to expand an applied agricultural program and encourage Vermonters to return to dairy farming.
A third gift arrived a year later: a $4 million grant from the US Department of Labor. New dairy equipment was purchased and a dormitory was created from some of the existing buildings. But this federal largesse could not stave off the realities of a declining dairy industry. Faced with falling milk prices and insufficient student interest, Vermont Tech closed the program and sold the cows in 2017. The herd manager left but some employees remained. 14
At this point, Vermont Tech tried to abandon the initiative. But it ran into multiple obstacles, including lawsuits from other partners in the original deal, and the former employees who refused to leave the property. By 2021, the school just wanted out; it was ready to sell everything.
The only problem? The employees who refused to leave had setup a micro-dairy that provided “bottled milk, yogurt, cheese, and ice cream.” This micro-dairy had no cows—they’d been sold off in 2017—so it purchased milk to make its products from another non-profit dairy farm in the equally-wealthy town of Woodstock, Vermont.
This micro-dairy with no cows has become so popular it attracted a fourth round of donors who want to “save the farm” from the evil clutches of the community college—that would be Vermont Tech which, you’ll recall, was gifted the farm in 2015 and tried to get rid of it several years later. These donors have formed a non-profit, raised $160,000 in gifts, and pledged more than $600,000 to purchase the farm from Vermont Tech. The property is appraised at three times that amount.
This story is not over and it’s unclear how it will play out. What is clear is this dairy farm with no cows has generated at least $6.2 million in cash gifts and tax deductions—a number that grows when one includes salaries and other operating expenses over the past 20 years.
Why, you might ask, would anyone want to raise more money to “save” this farm after two decades of failed philanthropic effort to make it a going concern?
The answer lies in the context of the philanthropic “ask,” and to whom it is directed: wealthy non-farmers who love the idea of a local farm—and tax deductions—but have no idea what it takes to run one and make it successful.
Intention matters in philanthropy as much, and perhaps more, than outcome. Philanthropic gifts generate media attention: long term impact, not so much. Donors themselves are often more focused on the opportunity to give—and the attention it garners—than on the execution of the gift itself. There is rarely a penalty for philanthropy gone-wrong.
This explains why a tiny, cow-free, dairy farm in a wealthy Vermont town has enjoyed millions of dollars in philanthropic attention: because it can.
BRIEFS:
- SEAWEED reduces the amount of methane burped out by cows. Why, you may ask, should I care about the eating and burping habits of cows? Well, because in addition to producing milk and cheese and beef and other things, cows produce methane. Lots of methane. In fact one might consider them methane-burping machines. By one estimate, the planet’s cows produce as much methane as 850 coal-fired power plants operating year-round. This is important. While carbon dioxide consumes most of the oxygen (pun intended) in discussions around greenhouse gasses (GHG) and global warming, methane is exponentially more effective at trapping heat and contributing to the planet’s rising temperature. Which brings us back to the cows and their methane-laden burps. Researchers at UC Davis found a bit of seaweed added to feed reduced by 82% the amount of methane burped out by cows. Even one of the lead researchers was surprised by the results: “I didn’t think we would get 80 percent reduction — that’s absolutely huge.” The full story is at Grist, a non-profit media org.
- HUMMINGBIRDS are quick. Really quick. They flit around, rarely holding still save to sip a bit of whatever they sip from a willing flower. Their rapidly moving wings—40 beats a second—make a particularly distinct sound closer to that of insects than other birds. A study involving hummingbirds along with “12 high-speed cameras, 6 pressure plates and 2176 microphones” explains why: “The hummingbird's hum originates from the pressure difference between the topside and underside of the wings, which changes both in magnitude and orientation as the wings flap back and forth.” Or, as Stanford University Professor David Lentink helpfully explains: “This is the reason why birds and insects make different sounds. Mosquitoes whine, bees buzz, hummingbirds hum, and larger birds 'woosh'. Most birds are relatively quiet because they generate most of the lift only once during the wingbeat at the downstroke. Hummingbirds and insects are noisier because they do so twice per wingbeat." Apparently these findings have potential practical applications in making “aircraft and drone rotors as well as laptop and vacuum cleaner fans” quieter. Who knew that hummingbird outside my office window might help make the Hoover a bit less annoying. You can read the full story in Science Daily.
- Have you ever heard of “SPORTS WASHING”? Neither had we. Sports washing is “when heavily polluting industries sponsor sport to appear as friends of healthy activity, when in fact they’re pumping lethal pollution into the very air that athletes have to breathe, and wrecking the climate that sport depends on,” says Andrew Simms, co-director of the New Weather Institute, a think tank. Led by Toyota with 31 deals, the car industry is “the most active high-carbon sector courting sports sponsorships,” followed by airlines and oil and gas companies. Football, aka “soccer,” has the most deals globally, “receiving 57 sponsorships from high-carbon industries ranging from oil and gas corporations to airlines.” Guess maybe it’s time to retire that Real Madrid jersey with the Emirates logo. You can read more in The Guardian.
UPDATES:
A few weeks ago we told you about February’s expiration of the disaster declaration that had been so crucial to Alaska’s efforts to control COVID-19. Governor Mike Dunleavy had proposed an extension, but it failed to pass the legislature before the existing declaration expired. Well, the legislature is still considering an extension, but Dunleavy has changed his mind. On Wednesday he sent a letter to legislators asking them not to reimpose the state of disaster saying it would “lead travelers to incorrectly assume that Alaska’s situation is deteriorating,” adversely affecting the state’s tourism industry. (Alaska Public Media)
Thanks for reading. We’ll be back next Friday with more Perspective.
Rutland Daily Herald, August 31, 2001, page B3