Case Title: State ex rel. Sweetwater County School Dist. No. One v. Ohman,

Citation: 

Docket Number: 93-70

State: wyoming

Court: Wyoming Supreme Court

Date: 1995-05-04T00:00:00Z

Document:
State ex rel. Sweetwater County School Dist. No. One v. Ohman,1995 WY 63895 P.2d 49Case Number: 93-70Decided: 05/04/1995Supreme Court of Wyoming

STATE 
of Wyoming, ex rel., SWEETWATER COUNTY SCHOOL DISTRICT NUMBER ONE, State of 
Wyoming; and Sweetwater County School District Number Two, State of Wyoming, 
Appellants (Relators),   v.

Diana J. OHMAN, State Superintendent of Public 
Instruction; Stan Smith, Wyoming State Treasurer; and David Ferrari, Wyoming 
State Auditor, Appellees (Defendants).

Appeal 
from District Court, Laramie County, Nicholas G. Kalokathis, 
J.

Gary M. Greenhalgh and Ford 
T. Bussart of Greenhalgh, Bussart, West & Rossetti, Rock Springs, for appellants.

Joseph B. Meyer, Atty. Gen., 
Michael L. Hubbard, Sr. Asst. Atty. Gen., and Rowena L. Heckert, Sr. Asst. Atty. 
Gen., for 
appellees.

Before GOLDEN, C.J., and THOMAS, CARDINE,* 
MACY and TAYLOR, JJ.

* 
Retired July 6, 1994.

THOMAS, 
Justice.

[¶1]      The issue in this 
case is whether shortfall grants legislatively authorized for school districts 
that experienced a substantial reduction in assessed valuation of property 
situated within the district were required to be included in the computation of 
local resources of the district under WYO. STAT. § 21-13-310 (1991) for the 
1991-1992 school year. After initially not requiring the inclusion, the State 
Department of Education (Department) changed its position and required the 
inclusion of such grants in the computation of local resources. Sweetwater 
County School District Number One (District 1) and Sweetwater County School 
District Number Two (District 2) both received such grants. They contested the 
requirement that the amounts of these grants be included as local resources in 
the computation for state funding entitlement for the 1991-1992 school year. 
Both school districts submitted a verified petition for a peremptory writ of 
mandamus, seeking an order from the district court that the state officials, 
Diana J. Ohman, State Superintendent of Public Instruction, Stan Smith, Wyoming 
State Treasurer, and David Ferrari, Wyoming State Auditor, be mandated to not 
require the inclusion of the grants. The district court ruled in favor of the 
state officials, holding the shortfall grants had not been previously reported 
by District 1 and District 2, and the shortfall grants had to be included in the 
computations for the 1991-1992 school foundation payments. A collateral issue 
exists with respect to the propriety of mandamus as a remedy in this instance. 
We hold, adopting arguments of District 1 and District 2, that the shortfall 
grants represent amounts directly traceable to projected tax revenues previously 
reported. We reverse the judgment entered by the district court and remand the 
case for the entry of a declaratory judgment, recognizing the remedy of mandamus 
is not appropriate.

[¶2]      In the Brief of 
Appellants, the issues are stated in this way:

A.        Whether 
Appellees (Defendants) Diana J. Ohman, Stan Smith and Dave Ferrari have 
unlawfully deprived Appellants (Relators) of school foundation funds for Fiscal 
Year 1992 (School Year 1991-1992) by erroneously including shortfall grants 
received in Fiscal Year 1991 (School Year 1990-1991) as local resources in 
calculating funding entitlement under the School Foundation Program Guarantee 
for Fiscal Year 1992 (FY92).

B.        In the 
alternative, whether Appellees (Defendants) have unlawfully deprived Appellant 
(Relator) Sweetwater County School District Number One of school foundation 
funds for Fiscal Year 1992 by providing a form which did not permit the School 
District to report the shortfall grant as actual local revenue in the year of 
receipt (FY91), instead of estimated local revenue for 
FY92.

In the Brief of Appellees, 
the following counterstatements of the issues appear:

I.          
Should mandamus be granted when the agency interpretation of the 
controlling statute effectuates the intent of the legislature and appellant's 
interpretation does the opposite?

II.          
Should Appellant School Districts have their 1990-1991 uncollected tax 
revenue replaced twice by the State, contrary to law?

III.         
Should the 1991-1992 state foundation program entitlements for one 
appellant district be calculated contrary to law in order to increase their 
size?

[¶3]      The parties have 
no disagreement with respect to the facts. Their disagreement arises out of the 
application of the pertinent legislation to those facts. The historical 
background encompasses the fact that, in the 1980s, some Wyoming school 
districts experienced significant shortages in financing, primarily due to 
overestimates of tax revenues, described in the statutes as local resources. 
Those overestimates primarily were caused by unforeseen decreases in projected 
assessed valuation impacting the school districts' share of the countywide six 
mill levy and the local district twenty-five mill levy. Tax rebates, tax 
litigation, and a receipt of delinquent tax payments were other factors 
affecting the estimates. The overestimates relating to local resources, in some 
instances, caused school districts to receive less than their full share of 
state funding described as "entitlements."

[¶4]      In 1988, the 
legislature recognized the serious problem of underfunding of schools, and it 
began to provide supplemental state funding described as "adjustments" in WYO. 
STAT. § 21-13-310(e) (1988) and as "tax shortfall grants" in WYO. STAT. § 
21-13-310(f) (1989). In 1991, the legislature appropriated funds for tax 
shortfall grants for fiscal year 1991 (FY91) in the amount of $3,600,000. The 
statutory provision is found in 1991 WYO. SESS. LAWS, Ch. 229 § 11, and 
reads:

(a) Three million six hundred thousand dollars 
($3,600,000.00) within the public school foundation program account within the 
earmarked revenue fund created under W.S. 21-13-306(a) is available to the state 
superintendent of public instruction to make grants to school districts in this 
state:

(i) 
        
Based upon the short term cash flow needs of the district during the 
1990-91 school year due to a substantial reduction in assessed valuation of 
property situated within the district;

(ii)        To a 
district which is not subject to recapture under W.S. 21-13-102(b) and 
(c).

(b) Any amount received by a district under this 
section which has not been previously reported to the state department as a 
local resource, shall be included in the computation of local resources of the 
district under W.S. 21-13-310 for the 1991-1992 school 
year.

[¶5]      District 1 
identified a local resource shortfall in May of 1991. On June 6, 1991, District 
1 revised its anticipated shortfall projection and submitted a request for, and 
received, $916,000 from the Department. Similarly, District 2 experienced a 
shortfall, submitted a claim for additional school foundation funds, and 
received $822,683. When the Districts completed the School Foundation Program 
Application for 1991-1992 (FY92), they reported zero on the line entitled 
"Subsequent Tax Shortfall Collections" which was included under the "Computation 
of Local District Resources." The Department then notified the Districts it had 
changed its interpretation of the statute, and they were told they must report 
on that line the shortfall tax grants received in FY91. The Districts objected 
to this interpretation, but they did submit revised applications as 
directed.

[¶6]      The Districts 
then sought advice through the Superintendent of Public Instruction from the 
Attorney General for the correct interpretation of the new statute. The Attorney 
General's letter of advice stated the Department's FY92 forms did correctly 
reflect the interpretation of the law, that is, the FY91 tax shortfall grants 
were to be included in the actual resources received figure. The effect was to 
increase the local resources anticipated for FY92 by those amounts, which would 
reduce the school foundation funding for that year. The Districts then filed 
claims with the State Auditor, pursuant to WYO. STAT. § 9-1-404 (1991), and the 
auditor denied the claims.

[¶7]      The Districts 
then filed a Petition for Writ of Mandamus in the First Judicial District. After 
receiving briefs and hearing argument, the district court adopted the 
Department's interpretation of the law, finding in its decision 
letter:

This court construes section 11(b) as saying to the 
districts, that even though the foundation grant was not a local resource for 
the year it was awarded, it nevertheless shall be treated as if it were a local 
resource for future grant applications namely fiscal year 
1991-1992.

The Districts appealed the 
judgment of the district court which granted the defendants' motion for summary 
judgment based upon the conclusion reached in its decision 
letter.

[¶8]      With respect to 
the entitlement program, the school districts were to receive a guaranteed 
amount calculated in accordance with WYO. STAT. § 21-13-309 (1991). The 
guaranteed amount was based on student enrollment and other factors established 
by the legislature. Local resources then were estimated by multiplying the 
assessed valuation of the district by the required mill levy and adding other 
payments received pursuant to WYO. STAT. § 21-13-310 (1991). The local resources 
were subtracted from the guaranteed amount to arrive at the entitlement amount 
provided by WYO. STAT. § 21-13-311 (1987). The entitlement amount was paid to 
school districts by the State Auditor from the foundation funds in accordance 
with WYO. STAT. § 21-13-313 (1991). 

[¶9]      Problems 
developed in the method of awarding shortfall grants. A school district could 
receive a tax shortfall grant in one fiscal year and then recoup a portion or 
all of that amount as a windfall if delinquent taxes were paid in subsequent 
fiscal years.1 In 1991, the legislature addressed 
the "double-dipping" concern. The solution adopted was that the district should 
reimburse the state for excess entitlements by adjusting the entitlement 
calculation for the following fiscal year. In effect, this shift was from a 
historical budgeting approach involving estimates to a historical cash approach. 
The legislation providing for the shift in methodology was found in 1991 WYO. 
SESS. LAWS, Ch. 229, § 11.

[¶10]   This dispute arose after the 
adoption of 1991 WYO. SESS. LAWS, Ch. 229, § 11 because of the shift in 
methodology. In prior years, the local resources had been estimated for the 
forthcoming year. For the FY92 application, the Department required the 
Districts to use either the amount of estimated local resources for the 
forthcoming year or the actual resources received in the prior fiscal year, 
whichever was smaller. For subsequent fiscal years, the formula was based only 
upon actual local resources received in the prior fiscal year, which would 
include delinquent tax payments from prior years. The nub of this problem is 
whether the actual local resources for the prior fiscal year had to include any 
tax shortfall grant received. If the grant amount were not included, the formula 
uniformly resulted in the use of actual local resource figures from the prior 
fiscal year because most districts filing for tax shortfall grants received a 
lower actual resource than what had been estimated for that fiscal 
year.

[¶11]   The Districts contend the 
requirement of including the FY91 tax shortfall grant figures as an actual local 
resource on the FY92 application caused the grants received in FY91 to be taken 
back because the FY92 entitlements were reduced by the amount of the FY91 
shortfall grants. The argument of the Department is that these Districts were 
beneficiaries of "double-dipping" because, after they received the tax shortfall 
grants, they also received subsequent delinquent tax payments that the grants 
were intended to replace. The Department also argues that, if the Districts' 
interpretation of 1991 WYO. SESS. LAWS, Ch. 229 § 11(b) is adopted, the 
Districts would have their FY91 local resources shortfall made up a second time 
by excluding it from the FY92 entitlement calculation. The Department contends 
such a result is contrary to the intent of the 
legislature.

[¶12]   The controversy we must resolve 
with respect to the statute is the interpretation that must be attached to the 
phrase "any amount received by a district * * * which has not been previously 
reported to the state department as a local resource" as found in 1991 WYO. 
SESS. LAWS, Ch. 229 § 11(b). The Districts rely upon an initial memorandum sent 
on April 12, 1991 from the director of school finance of the Department which 
stated:

Note that any shortfall grant received by a district 
in FY91 must be counted as a local resource in FY92, unless that amount has been 
previously reported as a local resource. In most cases, these amounts have been 
previously reported, and need not be counted again in 
FY92.

The interpretation the 
Districts rely upon would result in the entry of zero on the appropriate line in 
the application for FY92 because the Districts contend they had "previously 
reported [the grant] as a local resource" for FY91. The argument of the 
Department is that its revised interpretation of the statute requires the 
inclusion of this amount on the application because the shortfall grant had not 
been previously reported. There is a superficial logical appeal in the position 
of the Department. Obviously, District 1 and District 2 could not have reported 
as local resources for FY91 shortfall grants that had not been contemplated at 
the time the estimate was prepared.

[¶13]   The Districts address the argument 
in this way. In its application for FY91, District 1 estimated the revenues from 
the six mill levy and the twenty-five mill levy based on assessed valuation 
would be $18,168,653. In the attachment to its June 6, 1991 letter to the 
Department, District 1 indicated it had received only $17,152,623 of the 
estimated amount and anticipated receiving an additional $100,030. Simply 
stated, the position of District 1 is that it had reported the $916,000 it 
received as a shortfall grant as estimated local resources for 
FY91.

[¶14]   Similarly, District 2 previously 
reported the amount of its shortfall because it had included that amount in its 
estimate of FY91 local resources. The formula provided in 1991 WYO. SESS. LAWS, 
Ch. 229, § 11(b) excludes from the computation of local resources for FY92 
amounts previously reported. We are satisfied the conclusion of the Department 
to require the Districts to include the FY91 tax shortfall grants in their 
estimates of FY92 is contrary to the intent of the 
legislature.

[¶15]   There can be little question that 
1991 WYO. SESS. LAWS, Ch. 229, § 11(b) is susceptible to different 
interpretations. As we look at the language of this subsection, however, we note 
the State Superintendent of Public Instruction is authorized to make grants to 
school districts in subsection (a). In subsection (b), the legislature refers to 
"any amount received." Had the legislature intended the word "amount" to be 
limited to a "grant," as the Department suggests, that would have been easy 
enough to say. Had the legislature used the word "grant" instead of "amount," 
subsection (b) would have been superfluous, however. It clearly is impossible 
for any district in its estimate for FY91 to have reported a grant it did not 
know it would receive. In our perception, it is far more rational to conclude 
the phrase "any amount received by a district under this section which has not 
been previously reported to the state department as a local resource * * *" must 
allude to some estimate which could have been previously reported. We hold this 
phrase would include the estimated taxes reported as local resources. This 
interpretation fits with a legislative purpose to replace the shortfalls in the 
collection of taxes.

[¶16]   The position of the Department 
assumes there will be recoupment of the lost tax revenues. That possibility is 
present, but there is no evidence this occurred. Furthermore, since this is a 
transition provision, in the years following FY92, any such recoupment of lost 
tax revenues will be included as local resources.

[¶17]   In this difficult task of statutory 
construction, we look to the subsequent actions of the legislature. The version 
of WYO. STAT. § 21-13-310 (1992), which was adopted after occurrence of the 
events leading to this case, does not control, but it demonstrates the goal the 
legislature was endeavoring to achieve with prior legislation. In subsections 
(a)(i), (a)(ii)(A), and (a)(ii)(B), WYO. STAT. § 21-13-310, there is provision 
for the inclusion of collections from the six mill and twenty-five mill tax 
levies in the computation of actual local district resources "regardless of the assessment year." 
Furthermore, subsection (g) provides:

Notwithstanding paragraphs (a)(i) and (ii) of this 
section, any revenue actually received by a district from mills levied and 
assessed prior to calendar year 1990 under W.S. 21-13-102(a)(i)(A) or (ii)(A) 
and (C) and 21-13-201(a), and for which a tax shortfall grant was not received 
by the district under law or otherwise previously excluded by the district from 
local resource computations in accordance with law, shall not be considered or 
reported as a local resource under subsection (a) of this section. A district 
shall verify eligibility under this subsection by submitting a written statement 
to the state department, certified by the county treasurer, that the revenues 
actually received were generated by levies assessed prior to calendar year 1990, 
that tax shortfall grants were not previously received by the district for those 
revenues and that the revenues were not previously excluded by the district from 
local resource computations under this section.

WYO. STAT. § 21-13-310(g) 
(1992).

[¶18]   It thus appears the legislature 
clearly contemplated the tax shortfall grants would be substituted for revenues 
from the tax levies.

[¶19]   In summary, our analysis of this 
statutory scheme results in the conclusion that the legislature recognized a 
need to substitute grants for tax revenue shortfalls. It did that for FY91 and, 
beginning with the years following FY92, it required delinquent tax collections 
be included in the calculation. We construe the language of 1991 WYO. SESS. 
LAWS, Ch. 229 § 11 in a manner different from that of the district court and 
conclude, if the amounts represented by the tax shortfall grants were previously 
reported as local resources in the form of estimated tax revenues, the 
requirements of the statute were satisfied. District 1 and District 2 were not 
required to include the amount of the tax shortfall grants as local resources in 
their estimates for FY92.

[¶20]   With respect to the availability of 
mandamus as a remedy, we hold it is not the proper remedy. Mandamus is defined 
in WYO. STAT. § 1-30-101 (1988) as "a writ issued in the name of the state to an 
inferior tribunal, a corporation, board or person commanding the performance of 
an act which the law specially enjoins as a duty resulting from an office, trust 
or station." "The writ must not be issued when there is an adequate remedy at 
law." WYO. STAT. § 1-30-104 (1988). We have said:

[T]he writ of mandamus will issue only where the duty 
to be performed is ministerial and the obligation is peremptory and plainly 
defined. The law must not only authorize the demanded action but require it; and 
the duty must be clear and undisputable.

*           
*           
*           
*           
*           
*

[I]n order to warrant the issuance of mandamus, not 
only must there be a legal right in the relator, but owing to the extraordinary 
and drastic character of mandamus and the caution exercised by courts in 
awarding it, it is also important that the right sought to be enforced be clear 
and certain, so as not to admit of any reasonable controversy. The writ does not 
issue in cases where the right in question is doubtful.

LeBeau v. State ex rel. 
White, 377 P.2d 302, 303 (Wyo. 1963).

[¶21]   It is clear mandamus cannot serve 
the purpose of an ordinary action, nor is it available as a substitute for an 
appeal. Ordinarily, the right of appeal is a plain, speedy, and adequate remedy 
at law. We agree with the state authorities that mandamus was not the proper 
remedy for determining whether tax shortfall grants authorized for the Districts 
were required by statute to be included as local resources in the year in which 
they were paid. The Districts are not entitled to the writ without a showing 
they have no plain and adequate remedy at law, and there has been no such 
showing.

[¶22]   While we conclude mandamus is not 
the proper remedy to be invoked by the Districts, we perceive this case as one 
in which the parties, in effect, sought a declaratory judgment. Certainly, that 
was the approach taken by the district court, and the arguments in this appeal 
manifest the need for a construction of the statute as it applied to the 
Districts. We hold, following the Districts' arguments, the tax shortfall grants 
are directly traceable to estimated tax revenues reported for the prior year. 
The grants were intended by law to replace that shortfall and were not required 
to be reported as local resources for the fiscal year following that in which 
they were paid.

[¶23]   We reverse the judgment entered by 
the district court, and we remand this case for the entry of an order declaring 
the statutory purpose in accordance with this opinion. That result should 
accomplish an adjustment in the foundation grants for FY92 in favor of District 
1 and District 2.

FOOTNOTE 

1 While the Department states that the 
Districts received subsequent delinquent taxes and kept them as windfalls, no 
evidence was presented in the record to show it actually occurred or, if it 
occurred, to what extent. In his decision letter, the district judge stated, 
"[i]t [this court] cannot with confidence declare that there is no 
double-dipping. Nor with confidence can it declare that there is double-dipping. 
Neither can it determine that the districts are indeed gaining from a windfall."