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Committee hears competing methods for regional cost adjustment; hedonic index outdated, experts say
Summary
Committee members discussed the regional cost adjustment (RCA) used to modify district funding for local labor and living costs. Consultants described three indices in current use — Wyoming Cost of Living Index, hedonic index, and a comparative wage index — and recommended a renewed review.
Consultants outlined how Wyoming’s model adjusts funding for regional differences in labor and living costs and described three approaches the state has used or considered: the Wyoming Cost of Living Index (WCLI), a hedonic index, and a comparable wage index.
Dr. Pikes said the economic logic for an RCA is to recognize higher local costs so districts can recruit similar-quality teachers in areas with higher living costs; he used Teton County as an example of a high-cost locality. "The typical way most states have done it in recent years is through what's called a comparable wage index," he said, and described the hedonic index his team recommended in 2005.
Current practice and concerns - Since 2005 the model has used a compromise: each district’s RCA is the greater of the WCLI, the hedonic index or 100 (state average). That floor of 100 means no district receives less than a state-average index. - The hedonic index in the model dates back to 2005 and needs updating; consultants said Lori Taylor is building a new hedonic/composite index using newly collected data. - Committee members heard that index choice matters politically: some districts would gain and others lose, and that trade-off influences legislative choices.
Next steps Consultants said they expect an updated, composite RCA from Lori Taylor using new data elements required by 2024 legislation and will present a comparison to the WCLI and any composite index to the committee.
Ending Committee members asked for comparisons showing how each district would be affected by different RCA choices; consultants agreed to include district-level examples in their follow-up material.
