State debates cash carryover amounts for school districts

BUFFALO — Lawmakers are looking at changing the amount of funds the state allows school districts to hold onto in their reserves.

Currently, districts are allowed to carry over 30% of the funds they receive annually from the state between fiscal years. But that law is about to sunset, and districts will be permitted to only hold onto 15% of the funding they receive from the state between fiscal years.

This cash that districts are allowed to carry over is largely used by districts to stabilize their cash flow, said Charles Auzqui, superintendent of Johnson County School District No. 1.

Districts may hold onto funds between the end of one fiscal year into another so that they have enough cash in hand to continue to pay their bills throughout the summer and fall, when they may not receive as much in local revenues.

“Those months when revenue flow isn’t as steady, we still have a ton of bills to pay,” Auzqui said.

As part of the state’s recalibration process, consultants from Picus, Odden & Associates wrote that “many district leaders have expressed concern that a 15 percent cap will not provide sufficient flexibility to cover the front-loaded costs of starting a new school year.”

“What we took a look at is how can we ensure that districts have the funding flexibility that they need while we’re still maintaining accountability, and you’re not overfunding these reserve accounts,” Mike Griffith, an independent school finance consultant said.

In most states, districts may maintain 5% to 15% of their general fund in a reserve account. 

The cash carryover limit in Wyoming, however, increased from 15% to the current 30% in response to COVID19 relief funds. 

For a time, districts were receiving large sums of money in a short amount of time. In response, the state increased the cash carryover amount to 30%, allowing districts to spread out spending. Now that those COVID-19 relief funds have ended, Griffith said, it was surprising to see districts still retaining such a high portion of that 30% cash reserves limit.

“That’s when we realized you’re not using it as a reserve account, you’re using it for something else,” Griffith said.

Auzqui said that JCSD 1 does use a portion of its cash carryover as reserves, but they aren’t used for large expenses, such as a new stadium. The funds are mainly for maintaining the district’s existing assets that wouldn’t qualify for state major maintenance funding.

He said that based on how these funds are used, both as reserves and to deal with cash

flow challenges, he believes the ideal carryover amount should be 20% to 25% of the district’s annual funding guarantee.

Picus, Odden & Associates are proposing a new system of carryover funding, which separates out the funding districts put into reserves and the funding they use to address challenges with revenue flow. The carryover and reserve funding would go into separate accounts, which would have explicit and relevant rules attached to them, Griffith said. For example, consultants proposed requiring that cash carryover expenses be used within the first three months of the next fiscal year.

During the committee meeting, Auzqui spoke during public comment about how that three-month requirement wouldn’t be realistic for many school districts. For example, special education funding is fully reimbursable by the state, but those expenditures aren’t reimbursed until after the fiscal year ends. That means districts have to front-load those costs.

“The revenue flow is an all-year thing,” he said.

This story was published on Dec. 11, 2025.