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Mead calls Legislature’s spending cuts unnecessary

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?”

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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.

Sen. Bruce Burns (R, SD-21, Sheridan), Chairman of the Senate Appropriations Committee

Sen. Bruce Burns (R, SD-21, Sheridan), chairman of the Senate Appropriations Committee

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.”

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Andrew Graham is reporting for WyoFile from Laramie. He covers state government, energy and the economy. Reach him at 443-848-8756 or at [email protected]

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7 Responses to Mead calls Legislature’s spending cuts unnecessary

  1. Damon Jensen February 14, 2017 at 8:01 am #

    According to governing.com in 2014 Wyoming had 160 full time equivalent state employees per 10,000 people. Utah and Idaho had 95 and 87 respectively. Cuts have been made since 2014 and I do not know current statistics but it is certainly less than 160. Cuts are hard for everyone. I admire the legislatures ability to make hard decisions.

    Afton, Wyoming

  2. Dewey Vanderhoff February 14, 2017 at 7:38 am #

    Hark! Do I hear the scratching scroll of Guv Matt’s veto pen ?

    I hope so… it is a refreshing sound not heard often enough from yon capitol. We tire of hearing the dull repetitive thump of the rubber stamp.

    Cody, Wyoming

  3. John Crouch February 14, 2017 at 7:14 am #

    Just a note to say I have enjoyed your coverage of the legislature. Keep it up! I do have one request, however. I would appreciate captions under the photos. Thanks!

    Green River, Wyoming

  4. Marti Halverson February 14, 2017 at 6:07 am #

    “Critics who argue the size of government in Wyoming is large compared to the population ignore the state’s rural nature, the governor said.” This statement by Governor Mead is wrong. Of the states with just one US Representative, Wyoming has far and away more public employees (excluding federal) per 10,000 of population – 873. Vermont, 636; Alaska, 738; North Dakota, 619; South Dakota, 531; Delaware, 524; Montana, 557. Nevada, while not an At-Large district, manages to deliver all its public services with a mere 350 public employees per 10,000 residents.

    Etna, Wyoming

    • Tom Dixon February 14, 2017 at 3:00 pm #

      Marti, curious about your numbers. Like Damon, I found a 2016 governing.com article “states where government workers are most prevalent” using 2014 data. Wyoming only has 160 state workers per 10K of population. Alaska 245, Delaware 190, Vermont 146, N. Dakota 134, Montana 125, S. Dakota 100, Nevada 62.

      That leaves Wyoming still third highest, but not nearly as crazy high as your numbers, which is why I’m wondering why our sources differ so much. Even including local government workers, which is not germane to a discussion of state budgets, the numbers I found are lower than yours.

      Anyway, leaving that aside, from my perspective we can toss out Nevada since it is often unflatteringly compared to Mississippi when it comes to quality of life and business – see CNBC’s annual best for business rankings for just one of many examples.

      Finally, I think a statistic that complements the data you provide would be to look at state land area. By that measure Alaska sure needs the most state workers because it’s HUGE and you still need someone to make sure the roads aren’t, the pipes aren’t corroding, the bridges aren’t toppling, fires aren’t burning and people aren’t poaching. That gets tougher and requires more people the bigger the state is.

      By that measure, tiny Delaware has WAY more workers than it needs in comparison to large Wyoming and giant Alaska. In fact, our closer comparison should be more along the lines of North Dakota. Similar population, similar land mass, about 26 fewer workers per capita than Wyoming.

      So, room for improvement, but not insanely out of whack. And if the Legislature axes an additional 135 full-time workers, the math is going to be a lot closer.

      Just my thoughts, sorry this was long. Thanks for taking a data approach to your concerns, Marti.

      Cheyenne, Wyoming

      • Marti Halverson February 14, 2017 at 5:40 pm #

        Tom, I refer to all public employees, not just state employees. Folks who go to work for a paycheck signed by John Q. Public – municipal, county, district, etc. However, on the subject of state employees only, the Governing (an excellent publication) state employee numbers do not take into account contractors. That number is unknown to me, but if we dug into the 900 series of our agency budgets we’d have a good idea. I heard Benjamin Ginsberg (author of What Washington Gets Wrong) say that there are 2.7 million federal employees and that many contract employees. I’m pretty sure Wyoming is not 1:1, but every agency has a healthy 900 series – it might be interesting to pin down.

        Etna, Wyoming

        • Tom Dixon February 15, 2017 at 8:20 am #

          I imagine it gets into fuzzy math. Is every construction company considered on the public dole because they do some street or sewer work?

          On an unrelated note – my wife and I are taking a few days off work to explore your neck of the woods in September for the first time. Do you have some awesome hiking/exploring/camping recommendations?

          Cheyenne, Wyoming

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