Minority Democrats protested the amount and manner of budget cuts late Friday night that they say outpace the state’s shrinking revenue, accusing the Republican-controlled Wyoming Legislature of overreacting to a downturn in Wyoming’s mineral-based economy.
All 13 democratic legislators voted against budget bills in their respective chambers. The House and Senate each easily passed their own versions of budget bills with only Republican votes. The two versions will now be merged into one bill through conference negotiations beginning this week.
The Legislature’s draft budget “puts saving money to build up structures before it puts up money to build up people,” Rep. Ken Esquibel (D-Laramie) said Friday.
Rep. James Byrd (D-Cheyenne) said “we missed the mark on this budget.” Lawmakers retained some $300 million to renovate the Capitol building and hundreds of millions more for other state and school capital construction projects. Yet the budget cuts or eliminates programs for the “very very young, the very very old, the disenfranchised and the sick,” Byrd said. “Unfortunately, those are the people that I represent.”
Republican majority leaders, however, said capital construction is mostly funded with one-time infusions of revenue, such as earned interest from various state accounts and payments from Wyoming’s portion of the federal Abandoned Mine Lands fund.
“We’ve got this general, gentle glide, and we did it by cutting vacant positions mainly,” Rep. Steve Harshman (R-Casper) said.
Revenue projection drives budget cuts
Wyoming’s revenue forecasters see a potential decline of nearly $500 million — or $600 million by some estimates — through 2018, and no signs that revenue will bounce back in the next five years or so. The state has already shed some 6,000 jobs, mostly in regions dependant on energy extraction.
Cuts include $11 million from a hiring freeze and travel reductions included in Gov. Matt Mead’s original budget proposal. Another $27 million cut comes from a new legislative “penny plan” — a 1 percent across-the-board cut for state agencies applied in 2017 and 2018.
Also cut from the budget is about $8.2 million in property tax rebates for elderly and disabled residents, $3.2 million for the Wyoming Family Literacy program, as well as cuts for workforce training centers and early childhood education.
Legislators pulled Medicaid expansion out of the governor’s budget proposal, which Mead said would have saved about $33 million in state spending in 2017-18, and reaped $268 million to benefit 20,000 low-income adults, and health care providers.
Rainy Day account helps soften cuts
Lawmakers will spend about $222 million from the state’s $1.8 billion “rainy day” account to help balance cuts, compared to Gov. Mead’s proposal to spend about $450 from the account.
Rep. Harshman, who co-chairs the Joint Appropriations Committee that sets the tone for legislative budgeting, said it’s reasonable to rely on some spending from the rainy day account. But the Legislature must be careful not to rely on the account too heavily. Some revenue streams will be redirected to the rainy day account to replenish the spending, and keep the account on pace to double the corpus before the end of the 2019-20 biennium.
He said lawmakers had the foresight during boom times 10 years ago to save money in the rainy day and other accounts so that they can “glide” budget spending down when mineral revenues crash.
“We thank God we saved all of that money,” Harshman said on the House floor Friday night. “I don’t know where we’d be at right now. I mean, we’d talk serious cuts.”
“We’re going to keep this state open for business,” Harshman continued. “This budget session has been in the works for over 10 years when we started saving for it.”
Harshman, and many other Republican lawmakers, have bristled at the accusation that their budget prioritizes buildings over people. Harshman said those construction projects provide work for many who have been laid off in the energy sector, and that the buildings do serve the people of Wyoming.
Democrats said the sacrifices tend to fall on state employees, schools and those who are most in need of some state assistance — programs that reduce unnecessary costs and enable residents to contribute to Wyoming’s economy in positive ways.
“Across-the-board cuts are not thoughtful and deliberate,” House Minority Floor Leader Rep. Mary Throne (D-Cheyenne) said. “To some of these agencies these cuts are drastic, because of the way they were implemented, especially the smaller agencies.”
“We have to have a broad discussion in this state about what group of government services we want and how we pay for them,” Throne continued. “And we never have that discussion. And this budget doesn’t implement that discussion, it just slashes and burns through programs that people depend on.”
Beyond the next biennium
Lawmakers set the budget for the next biennium — a two-year fiscal cycle. This year, the Legislature is setting the course for 2017-18, but current budgeting also takes into consideration continued decreases in revenue in 2019-20, members of the Republican majority said. By then, the state will have run out of coal lease bonus bid revenue to pay for school capital construction — and there’s no signs yet of a turnaround in mineral revenue.
But it’s not the job of the Legislature to set the course for future legislative bodies, Sen. John Hastert (D-Green River) said, adding that there’s no precedent for setting budget priorities beyond the next biennium that he knows of.
“That’s not our job,” he said. “That’s the job of the next Legislative body. Are they implying that they can’t handle it?”
Hastert said Wyoming’s mineral based economy is so volatile, forecasters cannot know for certain what’s going to happen from year to year.
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