THE BUZZ: Capitol Hill Slide

By on January 5, 2016

Legislators brace for a brutal budget session.

 HDR, along with Preservation Design Partnership and Plan One Architects, will be restoring the exterior and interior of the historic 124-year-old statehouse . (Photo: HDR, Inc.)

HDR, along with Preservation Design Partnership and Plan One Architects, will be restoring the exterior and interior of the historic 124-year-old statehouse . (Photo: HDR, Inc.)

Jackson, WY – When legislators convene for the upcoming budget session this February they’ll have a nagging corporeal reminder of the spending and saving decisions looming in the coming year. Lawmakers will cram themselves into temporary digs at a retrofitted Cheyenne office while a controversial $300 million renovation takes place at the State Capitol. It’s more than symbolic considering Governor Matt Mead’s proposed $3.016 billion operating budget has a measly $30 million leftover for wish list spending.

Belt tightening in Cheyenne due to the miserable state of worldwide energy economies means this budget session, unlike previous legislative assemblies, will likely focus almost exclusively on financial concerns. House and Senate representatives will have a mere three weeks to weed through a fiscal jungle of spending decisions that could include dipping into so-called “rainy day” reserves, raising taxes, and slashing funding.

For starters, Governor Mead has warned counties and municipalities to brace themselves for severe budget cuts – up to 50 percent – as state dole outs are expected to suffer in light of dwindling revenue. Mead has requested last biennium’s $183 million, allocated and distributed to Wyoming’s 23 counties and 99 incorporated municipalities, be slashed to $90 million this year.

“This is definitely the worst I’ve seen it in my two terms, but the notion of cutting funds to counties, towns and cities is not new. We had to fight for an extra $45 million last year when the governor tried to cut funds to our counties and municipalities,” said Marti Halverson, District 22 House Rep. “But finding another $90 million this year; I don’t know that will be possible. In talking to mayors and commissioners in my district, they’ve run the numbers and they are prepared. Sublette, Lincoln and Teton counties are not screaming, ‘the sky is falling.’ They are already making plans, accordingly.”

House Rep. Andy Schwartz (District 23), who is headed into his first budget session, said he is ready for cost cutting but hopes it’s done cautiously.

“I don’t really have a good understanding of how local budgets are affected by the downturn in the energy economy,” Schwartz admitted. “But, in general, I’m a supporter of giving more to local governments. It’s going to get complicated because it will be more than actual dollar amounts. The revenue committee is working on a new formula for revenue distribution. I certainly hope we can do more than the $90 million.”

Senator Leland Christensen viewed Mead’s 50 percent cuts as excessive.

“That seems like a pretty deep cut; a radical change,” Christensen said. “I’ll reserve finer discussions until after I hear from the Appropriations Committee, but to make modest cuts at the state level and huge cuts to towns and counties doesn’t seem balanced or respectful.”

Raiding reserves

As state leaders grapple with the daunting task of navigating through dire revenue predictions, things might go from bad to worse. A new report on from the Consensus Revenue Estimating Group, expected any day now, could forecast an even gloomier future.

Meanwhile, Mead has proposed a workaround for tapping the state’s $1.8 billion rainy day fund. His spending projections for state projects call for “borrowing” some $488 million from reserves in the hopes the energy sector will one day rebound. The idea has met with strong opposition from fiscally conservative Republicans and even some Democrats.

Christensen said, “It might be time to talk about accessing money in savings but as far as living off the piggy bank and kicking the can down the road, I would be pretty hesitant to do that. We can go through a billion and a half awfully quickly in this state.”

Halverson, for one, isn’t ready to go there at all.

“This session my position is going to be not to dip into any savings,” she said. “I could be persuaded not to add to the rainy day fund, though. We will know this December if we are going to have a continuation of energy wars or if Wyoming is going to be free to develop fossil fuels as it has in the past.”

Halverson doesn’t feel a global downturn in oil and gas prices are cramping Wyoming’s ability to collect revenue from minerals extraction as much as federal opposition to coal mining hurts the state.

“The main issue is coal,” Halverson said. “I receive emails from activists from all over the world and they always end their correspondence by saying, ‘Leave it in the ground.’”

While pushback from Washington in the form of more stringent EPA policies concerning coal burning and the foreign export of coal is perceived to hinder leading producers like Wyoming and West Virginia, Halverson said she is not on board with throwing more money at coal gasification.

“Here is where I think the lines are going to be drawn. If we are preparing for far less mineral extraction then there are some legislators who are going to be looking to expand and diversify Wyoming’s economy with projects like coal-to-liquid,” Halverson said regarding the controversial and expensive $1.75 billion coal gasification plant near Medicine Bow. “I am going to be saying, ‘not yet on coal to liquid.’ No more money there, I would cut that off or suspend efforts on that.”

Schwartz doesn’t think political battle lines over coal are the issue.

“It’s easy to blame the EPA and Obama for the state coal is in right now,” he said. “But it’s not necessarily that Obama has made coal tough; globally, the market for coal is down. Even in China they are looking at ways to reduce coal because the impact on their cities is profound. As far as gas and oil prices, who knows? Iran could bomb the shit out of Saudi Arabia next week and those prices could go back up.”

Schwartz thinks the time is right to talk about diversification from Wyoming’s energy dependence.

“Tourism is the No. 2 industry in the state and growing. Just walk around Jackson in the summer,” Schwartz said. “We would be foolish to cut our investments in tourism.”

Halverson, too, said her constituents back tourism and she would not favor cuts to tourism spending. Indeed, Mead would like to see an additional $3 million added to the standard Wyoming Department of Tourism $25 million annual budget for international marketing.

“I support the marketing that the [state tourism] board does,” Halverson said. “I would just like to see better empirical data from them, because if we are going to continue to back tourism, now is the time to really get down into the weeds and see what measurable results we are getting back.”

Christensen is also a strong proponent of supporting tourism. “Tourism is to a large degree the clean, renewable economy on this side of the state,” he said. “I always encourage my fellow legislators about the need to plant in order to harvest. And the other thing about tourism is it’s Main Street, Wyoming. Visitors spend their money on Main Street, at the mom-and-pop shops, in the communities they visit.”

Cutting costs, raising revenue

When times are tough, government often leans toward slashing social services first. The Governor’s Office is already calling for deep cuts to many programs like mental health providers, community service providers, advocates for victims of sexual assault, and substance abuse providers.

Neither Halverson nor Schwartz think that’s the way to go.

“I think we have to be real careful about cutting social services because they save the state money in the long run,” Schwartz said. “Drug courts, for example, actually help keep people out of jail and prison, which is a higher cost to taxpayers than drug courts.”

Halverson added, “We are so lucky in Wyoming to have these NGO’s [Non-Governmental Organizations]. These would be state agencies in any other state. These nonprofits, which receive state funding, are safety nets in every community they serve. The governor is talking about taking money out of these programs, but I’m coming down on their side.”

Halverson would rather see Wyoming trim its own fat.

“What I’m hearing from my constituents is: cut government,” she said. “The gist across the board, from everyone I’m hearing from, is to cut the number of state employees. Wyoming has the distinction of having more employees per 1,000 residents – well over 800 total – than any other state in the country.”

Neither House rep had the appetite for raising taxes but Schwartz said he would entertain the idea of leaving the option up to local governments.

Financial focus

Budget sessions are shorter than general sessions. Time constraint dictates legislators focus primarily on budget related items. To discourage non-budgetary bills, a two-thirds vote is required, rather than the customary majority, in order for legislation to pass. Still, many lawmakers use the session to introduce pet projects they know have little chance of passing in order to salt the mine for future iterations of their bills in later sessions.

With money being tight, will Senators and House reps back off in deference to what many view as a critical budget session?

“I think it’s going to be a normal session with many [non-budgetary] bills being introduced just to get them out there. I’ve got one like that,” Schwartz said. “You need to make people aware of [your proposed legislation]. It sometimes takes four or five tries to get something passed.”

Halverson blamed bill bloated budget sessions on political grandstanding. “Budget sessions happen in an election year,” she pointed out. Halverson anticipated an extra five days or so being tacked on to the scheduled 20-day session slated to kick off on February 8. The House rep said she had confidence in leadership to skillfully weed through non-budgetary bills, introducing only high-priority legislation to the floor. PJH

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