Am I dreaming? Or did I somehow get transported to an alternate universe where Wyoming legislators are willing to invest in good government instead of hoarding revenue like frightened squirrels with so many pine-nuts?
Last week the Joint Appropriations Committee did something totally uncharacteristic. Faced with about an $800 million shortfall for the 2019-20 biennium, members decided that perhaps we can slow the pace of saving and fund the necessary work of state agencies.
The most plausible explanation is that some of the fiscal conservatives voters keep sending to the Legislature have recognized that savings aren’t very helpful if you never use them. Perhaps it’s better to loosen the purse strings when times get tough than to save ad infinitum for some future, presumably more cataclysmic, rainy day. While obvious to many, it’s a new perspective for most of this crowd. In past deluges our legislative leadership has refused to even consider breaking open one of the myriad piggy banks.
Of course, there’s nothing wrong with saving money. In fact sometimes it’s the only way the state can afford expensive long-term projects. The “rainy day fund” was a good idea. But when saving is seen as the only tool in the box, residents — predictably the most vulnerable — take the hit.
The more typical appropriations process of recent years has, for example, led to elimination of the Property Tax Refund for the Elderly and Disabled and the state’s Family Literacy Centers and suicide prevention funds. It decimated senior care centers. It even wiped out funds for substance abuse treatment programs in prisons, effectively greasing the “revolving door” of expensive incarceration.
Such measures could all have been avoided with modest investments from savings.
The JAC has taken a different tack in advance of this year’s budget session that opens Feb. 12. Gov. Matt Mead set things in motion by delivering the committee a budget recommendation that would restore funds to Department of Health and Department of Family Services programs that he believes have been hit too hard.
In the case of the health department, which had to cut more than $93 million in 2017, the appropriations committee put even more money back than the governor had requested.
The state has about $15 billion in savings, but much of it is untouchable, including the Permanent Mineral Trust Fund where a portion of severance tax funds are automatically deposited. Income from investment of the fund’s corpus is used to both grow the fund and run state government. But the Legislature has the authority to move some other reserve funds around for different purposes.
The state has a shortfall of $204 million for general operations, $484 million for public school funding and $166 million for school capital construction and maintenance. But the appropriations committee is using some out-of-the-box thinking to identify where money destined for savings can be redirected to programs and essential services, thus avoiding cuts:
- JAC Co-Chairman Rep. Bob Nicholas (R-Cheyenne) proposed moving $150 million from one reserve account to another and in doing so make it available for funding K-12 education. Another $9 million from the account would be spent on higher education.
- Sen. Dan Dockstader (R-Afton) suggested the state take $81 million left over from an account last year and spend it to renovate the Capitol instead of cannibalizing that amount from other budgets.
- Rep. Albert Sommers (R-Pinedale), chairman of the Select Committee on School Finance Recalibration, recommended continuing to divert an extra 1 percent severance tax into the state’s General Fund for the coming biennium to raise $185 million.
- Sen. Bill Landen (R-Casper) suggested using an extra 33 percent of the state’s coal royalties for education.
- Rep. Tom Walters (R-Casper) said an extra $15 million could be spent on education by reallocating some severance tax distributions.
Last year the Senate insisted on reducing education funding, at one time approving $91 million in cuts that it didn’t even bother to identify. Fortunately, the House whittled education cutbacks down to about $35 million, but legislators set the stage for a monumental battle this session over public school funding.
I’ve followed the Select Committee on School Finance Recalibration around the state for months. I still haven’t seen any indication that it will develop a magic solution to fulfill our Supreme Court’s mandate that our school funding formula gives every Wyoming student the opportunity for a quality education. School districts suing the state over the results appears to be the only sure thing.
Legislating us to yet another round of school litigation makes absolutely no sense and it will have a negative impact on students, yet that seems to be the direction we’re headed.
It’s important to remember that while the budgets recommended by Mead and the JAC are notable improvements over previous efforts, there is no guarantee that the entire Legislature will accept them. Their more thoughtful processes could still go down the tubes, leaving Wyoming right back where it left off — cutting programs that should be left intact for public health and safety.
The biggest minefield is in the Senate, where calls for deep cuts and mandated savings have remained the loudest. Let’s remember that this is the crew that rejected hundreds of millions in federal Medicaid funding. It has painted a bulls-eye on education funding.
Another vital component of the budgeting process — raising taxes to provide adequate revenue to operate state government — faces steep roadblocks in both the House and Senate. During the interim the Joint Revenue Committee has reviewed several tax measures, but none has particularly strong support.
A $1-per-pack cigarette tax hike barely survived committee and faces strong opposition from lobbyists. An increase of the 2-cent-per-gallon beer tax looks to be dead — little surprise given that the rate hasn’t been raised since it was instituted in 1935.
The travel industry is nearly unanimous in its support for a tourism tax to fund the state tourism agency. But lodging tax proponents favor a bill that would ensure out-of-state visitors pay most of the increase. Both efforts might fail because of the divide.
So kudos to the JAC, which deserves credit for stepping up and having the courage to change the “save at all costs” mentality that has prevailed at the Legislature for decades. If followed, the committee’s recommendations should keep several desperately needed agencies and programs from crippling budget cuts and reduce the impacts on those who can least afford them.
But state lawmakers could much improve the government’s revenue picture by also meeting two other challenges. They shouldn’t put education funding in their crosshairs, and they need to muster the courage to raise some taxes if the state is ever to break its dependence on the volatile minerals industry.