Wyoming governor’s budget would avoid cuts but use reserves

Wyoming News November 19, 2019



Wyoming governor’s budget would avoid cuts but use reserves

CHEYENNE, Wyo. | By MEAD GRUVER, (AP) — A two-year state budget proposed Monday by Wyoming Gov. Mark Gordon would avoid further agency spending cuts for now but dip into a reserve fund to make ends meet amid declining revenue.

The $3.1 billion budget for 2021-2022 would also slash construction funding from amounts sought by state entities while leaving just a thin overall spending cushion for most of state government.

Gordon’s first budget since his election in 2018 invoked on its first page the Blizzard of 1949, which killed a dozen people in Wyoming, as an example of the state’s grit and perseverance amid hardship.

“It is a budget intended to prepare our state to meet the coming storm head-on,” the Republican governor wrote in a preface addressed to the Legislature. He warned that spending cuts for the upcoming biennium might be necessary.

Grim assessments of the state’s finances have become almost routine as Wyoming struggles with protracted declining revenue from coal and natural gas production.

Fossil-fuel extraction accounts for up to two-thirds of state revenue in boom years but falling coal production and low natural gas prices over the past decade have set in as long-term trends with no end in sight.

Gordon proposes using $266 million from a “rainy day” savings account, allocating $161 million of the Legislative Stabilization Reserve Account for schools and $105 million for local governments. The allocations would leave the fund with $1.3 billion.

He wants to spend only about $95 million out of $150 million in building projects requested by state agencies, not including schools.

“I am concerned that the decision to build new projects does not always contemplate the amount of ongoing funding that is needed for maintenance and upkeep,” Gordon wrote. The budget proposes $238 million for school construction, including $10 million for school safety projects.

The budget would leave just $23.5 million remaining for additional funding for all state agencies, higher education and the judicial branch and very little room to avoid cuts if a state fiscal report due in January contain has more negative revenue news.

“Additional spending cuts, I do believe, will be on the horizon,” Gordon told reporters.

Wyoming budgets on a two-year cycle. State lawmakers will meet in Cheyenne starting Feb. 10 for a four-week session dedicated to crafting the next budget based in part on Gordon’s proposal.

Bills not directly related to the state budget will require a two-thirds majority vote to be introduced in either the House or Senate.

The Legislature, with one of the biggest Republican majorities in the country, has cut state spending for several years while avoiding any major new taxes or tax increases. Gordon has expressed little interest in new or higher taxes but has not ruled them out.

The budget proposal shows that Wyoming sooner or later will need to consider new revenue to handle permanent economic changes, said Chris Merrill, executive director of the Equality State Policy Center state government watchdog group.

“In the short term, meaning over the next couple years, we’re surviving,” Merrill said. “But in the longer term, the next five, 10, 15 years, we’re really in a crisis.”

Wyoming is among nine states with no state income tax. Merill’s group is trying to convince state lawmakers to enact an income tax similar to Idaho’s. It ranges from about 1% to 7%, depending on taxpayers’ income levels.

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