The Legislature’s proposed budget cuts are unnecessary and could hurt Wyoming citizens and slow efforts to diversify the state’s economy, Gov. Matt Mead said in an interview Friday.
Mead again said he does not believe Wyoming citizens have felt the full effect of the “dramatic cuts” to state spending made last year. Those cuts include roughly $84 million made by the Legislature in the 2016 budget session, according to Department of Administration and Information Deputy Director Kevin Hibbard. They also include an additional $250 million in cuts the governor made in June.
Given those spending reductions, and the state’s January revenue projections, Mead said the cutting should stop.
“We ought to hold firm,” Mead told WyoFile on Friday. “We’ve just got to get through one more year and then we have a budget session.”
The current legislative session is a “general session,” addressing all aspects of state government. The spending bill before the House and Senate this year adjusts the two-year spending plan approved in 2016’s specific budget session.
As it prepared the supplemental budget, the Joint Appropriations Committee reviewed spending by many, but not all, state agencies. The JAC will review all agencies in the 2018 budget session, Senate Appropriations chairman Bruce Burns (R, SD-21, Sheridan) said.
This year’s supplemental budget bill drafted by the JAC cut an additional $30 million from state agencies and eliminated 135 full-time and 10 part-time positions, the Legislative Service Office reported.
It is too much too soon, Mead said. He already has been hearing from citizens about the last round of cuts.
“With the dramatic cuts I made and the Legislature made,” Mead said, “our cut trajectory is sufficient, and to cut again now when we don’t know the full effects of those cuts I think is not what we need to do.”
People who rely on the state for health services have expressed their concern to him, Mead said, as well as those involved in community colleges and technical education. Some see technical education and the community college system as critical tools to diversify the state’s economic base away from minerals.
“I hear it from all over the board,” Mead said. “People are worried about, as we are preparing to build and diversify our economy, how are we going to get there?”
Speaker of the House Steve Harshman (R, HD-37, Casper) has sponsored a bill to move $25 million from the state’s rainy day fund into an account that would provide grants to new businesses in an effort to diversify the economy. Mead has also asked for $2.5 million to be taken from the rainy day fund and placed into a new account for his own economic development initiative, called ENDOW. The acronym stands for “Economically Needed Diversity Options for Wyoming.” The bill to do so is sponsored by Senate President Eli Bebout (R, SD-26, Riverton).
The House was finishing its work on its version of the supplemental budget Monday. The Senate completed its work Friday. Due to the differences in spending authorized by each chamber, it remains unclear whether the governor will get the $21 million contingency fund he sought to help pay for court-mandated hospitalization of mentally ill people or the $19 million that will be needed to house prisoners out of state if there is a major structural failure at the troubled state penitentiary in Rawlins.
A spending or a revenue problem?
Mead said that state government is smaller in terms of both the number of state employees and spending dollars than when he took office in 2011. At the same time, he said there is reason to be optimistic about the state’s revenue picture.
Oil and gas rig counts are up, Mead said. The number of oil and gas rigs nationally was up 9 percent in January from December, and up 12 percent compared to January 2016, according to a Feb. 7 report from energy analysts S&P Global Platts. The report did not include specific numbers for Wyoming. Mead also pointed to a recent sale of oil and gas leases in Cheyenne that raised up to $63 million for the state.
Burns said cuts are necessary to slow spending of the state’s rainy day fund. The current rate is “unacceptable,” he said. Burns believes the rainy day fund should last nine years. At the current rate it would only last six, he said.
The Legislature cannot afford an optimistic attitude about revenues, he said.
The governor disagreed with the assessment of some members of the House — that the state has a spending, not a revenue problem. Critics who argue the size of government in Wyoming is large compared to the population ignore the state’s rural nature, the governor said. High government spending per capita is a characteristic shared by other rural states, he said.
Mead avoids commenting publicly on legislation when he disagrees with it, he said. “The process for them is important,” he said, but he needs a way to let the Legislature know when a bill worries him. He meets with leadership from both parties on a weekly basis, and communicates daily with Bebout and Harshman.
“I’m grateful for the citizen Legislature,” he said. “We’ll agree and disagree.”
On the budget, they appear to be disagreeing, and Mead continues to urge caution when reducing the size of state government.
“While you can believe that we are still too large, there is a process to reducing services that shouldn’t be done all at once,” Mead said. “Because we’re talking about people who are employed, we’re talking about people who rely on services, and so if you have to cut 10 percent, if you have the ability to do that over two years versus doing it in one day, I think that is a better way to go.”