Some people can talk about complete failures and make them sound like championship victories.
But most of the time a legislative loss is clearly a loss, and no amount of political spinning can make it seem like anything else.
Last week two state committees completed their interim assignments with resounding thuds that could be heard from Cheyenne to Yellowstone. Members tried valiantly to claim some type of win but I doubt they convinced each other, much less Wyoming voters.
Since April, I’ve been tracking two committees as they’ve met throughout the state. One, the Joint Revenue Committee, has been around for a long time. Its main purpose is to painstakingly talk about but rarely pass any bills to raise revenue.
The second, the Select Committee on School Finance Recalibration, pops up every five years except in cases of emergency, which Republican leaders declared in 2017 only two years after the panel last met. Its job is to review the state’s school funding formula and recommend any changes needed to assure all Wyoming’s students have an equal opportunity for a high-quality education.
The efforts of this pair have been intrinsically linked. Wyoming’s funding crisis, caused primarily by the prolonged downturn of the minerals industry, caused a shortfall in education funding estimated at $400 million per year when the gavel came down on the final day of the 2017 general session. That didn’t even include school capital construction funds or money the state government needs to continue essential services.
The Revenue Committee was assigned to find ways to raise up to $300 million in new funds. Cutting education spending to balance the budget is never the job of the Recalibration Committee, but Senate President Eli Bebout (R-Riverton) and other GOP leaders let it be known that’s what was expected of its 10 members.
Both were ambitious but unrealistic goals. Did anyone think they could actually be accomplished, or was it all a futile exercise from the start?
Some cynics have said the latter, including me. I suspected as much and hoped they would prove me wrong. The final results indicate that despite all of the optimistic talk at their respective initial meetings, even many of the committee members weren’t confident they could do much to solve the state’s fiscal crisis.
In the end the Revenue Committee approved two draft bills to raise the cigarette tax by $1 a pack and increase the profit margin the state can receive on liquor and wine sales by 3 percent. Both bills face a tough road in the House, where they will need 40 votes just to be introduced during the budget session.
The committee discussed at least two versions each of increased taxes on sales, property, tourism and wind energy but eventually rejected them all. Personal and corporate state income taxes were brought up but never again discussed, even though state revenue experts estimated they could bring in a combined $300 million per year.
State Revenue Director Dan Noble said a personal state income tax can be designed to assure that wage earners who make up to $50,000 a year do not pay any income tax at all. It would be a progressive tax that collects most of the money from Wyoming’s wealthiest residents. But just the words “income tax” are enough to spur the vast majority of legislators to run for the hills, lest they be branded political pickpockets bent on snatching everyone’s hard-earned money.
To show how deathly afraid legislators are of raising taxes, consider the fate of a hospitality and leisure tax. It had nearly unanimous support among “leaders” of the tourism industry, a tourism lobbyist said in September. The industry practically begged the committee to place a 1 percent excise tax on the sale of “tourism activities,” including arts, entertainment, recreation, lodging and food service. The proposal would have funded the state’s tourism agency, freeing up about $25 million per biennium to be spent elsewhere. It was a good bill that died on a disappointing 6-6 vote.
After hiring Denver-based APA Consulting for up to $460,000 to review and suggest changes to the school funding formula, the recalibration committee voted to sponsor only one bill, a cost-saving measure to seek efficiencies in school bus transportation.
The meat of the consultant’s recommendations was a bill that would have added $71 million to the state’s education price tag. No matter how logical and reasonable the proposed changes may have been, no one voted for a bill to pay more for education at a time when Bebout and others threatened to add to the $77 million in public school cuts the Legislature approved during the last biennium.
What was the catalyst for doing little to raise revenue or improve education? The most recent state revenue forecast suggests modest improvement mostly because of higher oil production and prices.
Still, the projected gain of $150 million would leave the state with about an $800 million shortfall. It’s foolish to pack it in and say “we’re good now for the next biennium, so we’ll take up raising more revenue when we really need it.”
When will that be? When we’re broke, explained Revenue Co-chairman Sen. Ray Peterson (R-Cowley).
Recalibration Co-chairman Sen. Hank Coe (R-Cody) stressed the state hadn’t wasted its money and time by rejecting almost all of the consultants’ work. He added, “We put a lot of time into it [because] we care deeply. What we’ve accomplished here through this process won’t go away.”
“I think the audience witnessed today how adverse we are to raising taxes,” Peterson said at the Revenue Committee’s last meeting. “It’s a hard thing to pass a revenue bill out of this committee. We’re all a pretty conservative bunch here in Wyoming and we know what increased taxes do to our economy. … We’ll go forward with what we have. I think we’ve fulfilled our assignment very well.”
What would increased taxes do to our economy? They would enable Wyoming to finally stop relying so heavily on the minerals industry, which provides about 70 percent of the state’s revenue, and stop seeing our budget tank because of bad years for coal, oil and natural gas.
When the committee began its work, “We had no idea what these CREG reports were going to look like,” House Revenue Committee Chairman Mike Madden (R-Buffalo) said. “I was not going to be surprised if we were in worse shape now than we were a year ago, with the projections we saw. [As the process continued] $300 million looked less and less ominous, and that played a part in it too.”
House Speaker Steve Harshman (R-Casper) said, “I think the [new] model is good; I think it underpins the good we’re doing now. I think I know what the outcome is going to be. I want to tell everybody, let’s keep working on this. We’re going to get there.”
Coe kept apologizing to the consultants, telling them they’re not failures just because Wyoming didn’t accept their proposals. I can safely say that far from feeling like failures, APA Consulting is assuredly mighty happy about getting the nearly half-million dollars it will be paid for its services. It was the only undisputed winner in this whole process.