Following contentious negotiations between House and Senate budget writers last week, and heavy speechifying on the Senate floor Monday, the Legislature sent a budget to Gov. Mark Gordon that was pretty close to where it began.
The budget bill accepted by both chambers yesterday spends just $413,550 more than the draft budget bill the Joint Appropriations Committee — comprised of both senators and representatives — approved in January.
That starting-point bill was scrambled almost immediately upon entering the session. Senate Appropriations Committee members amended their version of the budget with sharp measures. Individual lawmakers in both chambers also tacked on their own priorities.
The budget bill spends $2.9 billion of state funds on general government and $2 billion on public schools. It allots billions more in federal funding and other dollars. All told the budget prescribes more than $7 billion in spending for the next two years and holds immense implications for all aspects of the state.
Budget winners this year included recipients big and small. There was a Big Horn Basin school district that gained permission to build new lockers. On the other end was UW’s School of Energy Resources, which saw tens of millions in funding for coal research projects make it to the governor’s desk.
Losers included the broader public education system. In that realm, legislators declined to match funding with rising costs and trimmed other areas as well.
Another amendment that will have ramifications next year, if it doesn’t fall to the governor’s veto pen, is a directive for state agency budgets to come back trimmed by 1%. If not, the Legislature will do it itself, the amendment — brought by Senate Appropriations Committee Chairman Eli Bebout (R-Riverton) — says.
Democrats, who broadly criticized the budget process and deal, called that amendment an example of the Legislature handicapping itself in a time of dwindling revenues.
The 1% mandate would prevent agencies from even considering new solutions for Wyoming’s social and economic problems, said House Minority Floor Leader Cathy Connolly (D-Laramie). “There’s no innovation when there is austerity,” she said.
Other amendments that survived hard-fought battles in their home chamber died by the vagaries of the interchamber negotiating process. Others survived but not without wounds. A $500,000 fund for laid-off workers was knocked back to $250,000. An amendment calling for a study of the board of trustees’ governance of the University of Wyoming also endured, but without any funding attached to it. Another, more controversial, amendment banned university health insurance from going to elective abortions — opponents argued that such health insurance is not state funding.
The bill includes more than just spending and cuts. One major battle between the House and Senate, a perennial one, was over whether to put around $90 million of severance tax revenue into an inviolate savings fund each year or use it in state budgets. The two sides split that baby — putting half into the Wyoming Permanent Mineral Trust Fund and half into budgeting.
Sound and fury
Since the budget session began, the sound and fury of the negotiations often seemed to outstrip the substance. The funding simply didn’t shift much for either side — at least not on the general government side of things, where the JAC exerts more control. The House lost more than the Senate — the budget that chamber initially passed was only roughly $10 million more than the ultimate compromise.
On the general government side, the small degree of difference between the original budget bill and the deal is “remarkable,” veteran LSO fiscal analyst Don Richards told the committees.
On education funding, the chambers entered negotiations roughly $34 million apart. Each chamber gave up $17 million to reach a compromise.
Much of the negotiating appeared to occur in secret throughout last week. During Friday’s conclusions, Senate and House negotiators separated multiple times to review offers from the opposite side and make their own counteroffers.
In the portions of negotiations that took place in public committee meetings, Bebout appeared the chief resistor to the deal. He opposed several offers from the House. The Senate resistance was enough to cause an outburst from House Appropriations Committee chairman Bob Nicholas (R-Cheyenne) in a different negotiating committee.
“You guys went back on us,” he complained of the Senate Appropriations’ lawmakers during a committee meeting on the state-funded capital construction bill — that separate spending bill remains up in the air as the session careens toward its finish. Chambers remain far apart on it.
The rancor was not limited to Nicholas.
“We’ve exhausted all possibility,” Bebout said at one point on Friday afternoon, before his side walked out on yet another House offer.
“We hope that you would kindly take a breath, go visit for a second and see if we can call this a day,” said Rep. Lloyd Larsen (R-Lander). The two sides did not reconvene for several hours.
Finally, at around 6:30 p.m. on Friday, a deal was struck. The compromise was greeted with a seeming end to the division. Bebout said he would “try to sell it in the Senate and we’ll see.”
Nicholas complimented Bebout as a tough negotiator. “I don’t know if there’s anybody harder to negotiate with than you in the world,” he said, “It’s just an experience and I learn something new every time I do this.”
Sen. Larry Hicks (R-Baggs) cheered the Joint Appropriations Committee as “kind of like a big family.”
“We fight amongst ourselves, hard fought battles, you win some you lose some,” he said.
Bebout sought to remind any listeners that “deep down inside [both sides] have the same commitment to do what is best for this great state we call home.”
The celebration of compromise in the Senate lasted until Monday. Bebout may have described the budget deal to his chamber, but he did not vote for it. When it came time for the committee to vote to approve the compromise, the chamber almost scuttled it with a 15-15 tally. The tie would have killed the compromise and sent both sides back to the negotiating table.
Two senators, Sen. Charles Scott (R-Casper) and appropriations committee member Sen. Mike Gierau (D-Jackson), switched their votes from no to yes to save the deal. Bebout was thus the only Senate Appropriations Committee member to vote against the compromise.
“Frankly I’m not sure we can do anything better than what was done,” Scott said, standing up to explain his vote. “The state has to have a budget.”
Scott’s words led to a round of speeches from senators expounding their votes for or against the budget. On a day when the stock market and oil prices both crashed, many offered dire predictions for the state’s fiscal future. Even before yesterday’s bad news, the state has been well aware of a gap between revenues and spending that some describe as a looming fiscal cliff.
Hicks described a $600 million choice when savings run out, which he estimated could be within four years if economic trends hold. He lamented the state had not engaged in sharper reductions over the last few years to prepare. “Who here thinks that in four years we’re going to come back here and vote for $300 million in reductions from K-12 and $300 million in taxes?” Hicks asked. “Who thinks they’re going to do that? I don’t know what the answer is, I think this budget is the best thing that we have, but I tell ya the day of reckoning is not that far away folks.”
From the get-go, however, there was little belief that either chamber would seriously consider ideas for confronting that deficit. The bill the Senate voted out of its chamber only contemplated spending around $500,000 less than the ultimate compromise, according to LSO staff — hardly on pace to avoid the fiscal cliff. The House killed off any significant tax raisers in the first few weeks, though the Legislature did finally pass an increase to the state’s lodging tax it has rejected for years.
The lodging tax bill, which Gordon signed into law Tuesday, is estimated to generate around $18 million a year.
Several senators called for reductions to public school funding, which drives half the budget and has increased in recent years while general government spending has decreased. Education advocates argue they too, have seen cuts as costs increase relative to funding.
The Legislature has not had the courage to make education cuts, Sen. Dave Kinskey (R-Sheridan) said, but he predicted it will in coming years.
“Some say that standing on the gallows sharpens one’s wits,” he said. “Well, standing on the gallows sharpens one’s knife.”
Each senator’s speech was followed by another’s, an unusual occurrence given the vote to accept the budget deal had already been cast. “Are we still debating or…?” Sen. Cale Case (R-Lander) finally asked, to laughter.
Things went easier in the House. That chamber accepted the compromise 46-9 with five lawmakers excused.
In both chambers, Democrat leaders voted against the budget deal. Connolly was frustrated with several failed attempts to get the Legislature to consider medicaid expansion, which would have given the state funding to address social problems, she told WyoFile on Tuesday.
“The budget keeps the state open for the next two years but does little to address our ongoing needs for new revenue streams,” Connolly said. “It fails to move us forward in any deliberate way when it comes to moving our economy forward. It also fails to solve problems like suicide, healthcare and substance abuse… We barely put a bandaid on the issues.”