Repeal of gun-free zones costs some school districts $30K annually

Liability insurance costs have increased by around $30,000 a year for several Wyoming school districts due to the Legislature's repeal of gun-free zones, which goes into effect July 1, according to recent public testimony.

Wyoming lawmakers met in Casper last week to review the state's current funding model for K-12 public education.

State school finance consultant Lawrence Picus, with Picus Odden & Associates, told members of the Legislature's Select Committee on School Recalibration that increased liability insurance costs is one of the top concerns for school districts.

Laramie County School District 1 will pay approximately $28,000 for a new supplemental policy that allows staff to concealed carry, according to LCSD1 finance director Jed Cicarelli in an emailed statement to the Wyoming Tribune Eagle.

The school district's general liability insurance premium for the next fiscal year, which starts July 1, is $117,612.

The total insurance package is about $2.1 million, which includes other insurance for vehicles, property and other items.

The price of the new firearm policy could increase, depending on the number of staff who choose to concealed carry, he added.

"LCSD1's general liability carrier notified the district that any injury resulting from the use of a firearm by staff was specifically excluded from our policy," Cicarelli said in the email. "With that notification, the district worked with a broker to obtain supplemental coverage for the district for staff carry."

School administrators from across the state reported similar insurance cost increases during public testimony.

Teton County School District 1 business manager Kristen Mayo said her school district's liability insurance will increase by $35,000 under the new policy.

"We cannot be insured without having an additional policy in relation to the new legislation around firearms," Mayo said during Tuesday's meeting.

Pooling insurance

Wyoming school districts have the option of choosing their own independent insurance carrier or opting into a local pool through the School Risk Retention Program. Out of Wyoming's 48 school districts, 31 are SRRP members.

LCSD1 is not a member and has its own independent insurance carrier.

SRRP, which is a branch of the Wyoming School Boards Association, will not change its coverage under the gunfree zone repeal, said WSBA Executive Director Brian Farmer. The Wyoming Governmental Campaigns Act was a factor in this decision, he said.

This act governs claims against governmental entities and extends certain protections to public employees, including public school staff.

"It's not a get-out-of-jail-free card. It's not a trump card," Farmer said. "But if you're able to persuasively argue that before the court, it does give an immunity, which is a bar to liability."

However, some lawmakers were surprised to hear school districts could purchase insurance through a branch of the WSBA, including Senate President Bo Biteman, R-Ranchester.

"I didn't know that the WSBA is in the insurance business," Biteman said.

Farmer said the WSBA created a separate corporate entity, Wyoming School Support Services, Inc., in order to sell property and casualty insurance to participating school districts.

"We have created a wholly owned subsidiary, a corporate entity," Farmer said. "As a matter of fact, I just wrote a check to Uncle Sam for $250,000 for our corporate activity as a separate entity."

Biteman asked Farmer how much revenue WSBA generates through its subsidiaries, adding it appeared to be a conflict of interest, considering WSBA is also a lobbyist organization on behalf of school districts.

Farmer said WSBA, which is a 503© nonprofit entity, has to report lobbying and expenditure activity to the federal government. Lobbying cannot make up a substantial portion of its expenditures.

"WSBA does keep it less than a substantial portion of our overall activity," Farmer said.

Furthermore, revenue from insurance programs goes to Wyoming School Support Services, which ranges from $500,000 to $1 million annually, he added.

Biteman said the whole operation looks like a "tangled web." Farmer responded that all insurance decisions are made by SRRP's joint powers board, which is independent of WSBA.

"They choose whether or not to contract with Wyoming School Support Services to administer the program," Farmer said. "So there are separate entities making those decisions."

State centralized insurance

Rep. Mike Yin, D-Jackson, asked Farmer for his thoughts on centralizing property and casualty insurance through the state.

"I still need to understand what's the downside," Yin said. "Ultimately, the cost of that (concealed carry) risk is still borne by the state's taxpayers across the board, because we have this model that divvies out money to the districts, and we also pay for all of the facilities anyway."

Farmer said it's a legal question of who actually owns the school buildings. Facilities constructed before 1977 are owned by the school districts. The question of who owns the buildings built after 1977 is "debatable."

"Is it owned by the district? Is it owned by the state?" Farmer said. "You generally can't buy insurance for something that's not yours."

He added that districts typically prefer to have control over their own insurance policies. Pooling insurance means pooling risk, and each district has its own unique set of risks.

"When you pool risk, you are pooling the shared decisions of those other entities," Farmer said. "You may be the most responsible, the best school district to limit or eliminate your own liability, but another district that does not act with that same care … will expose you to a higher cost premium."

Biteman said a state centralized insurance plan "makes more fiscal sense." It would allow the state Legislature to use its purchasing power to cover insurance so school districts don't need to worry about it.

"Obviously, that affects your bottom line at the WSBA, so you would probably lobby against it," Biteman said. "And this is back to my initial question, where your lobbying and your financial interests intersect."

Farmer maintained that district SRRP members make their own insurance policy decisions, not the WSBA.

"The decision of the individual district, or the decision of the SRRP program, is ultimately their decision," Farmer said.