Ray Peterson: Heaven Help Our Legislators

in Column/Ray Peterson

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Column by Ray Peterson, Cowley, former state legislator

Heaven help our legislators. Tough decisions will need to be made in a very timely manner this week. 

Our Wyoming Legislature will be meeting, electronically, on Friday and Saturday with an additional session being planned for some time in June.  

The idea of the first session will be to establish the process for spending the COVID-19 federal funds.  These will be used to provide relief to workers, employers, renters, landlords, local governments, and healthcare workers. 

HB1001 will address the appropriations while HB1002 will address emergency government actions and a third bill, HB1003 will address emergency budgeting issues. 

There is also a fourth bill, HB1004 that will establish business relief programs.  The Legislature seems to be taking the issue of the special budget adjustments in small bites with this first electronic session. 

Hopefully by the second special session in June, they will be able to meet in-person at the Capitol to discuss additional budget concerns.

The first session, although being held electronically, should be straightforward in appropriating the federal stimulus money.  

The second special session should prove to be a bit more difficult as they discuss and propose ideas that will adjust and stabilize our state budget to reflect more closely the downturn we’ve experienced with our revenue projections.  This will be the session to keep an eye on.  

Spending federal stimulus money will be much easier than adjusting and most likely reducing an already projected budget.  What may be looked at?  Possibly a hold or postponement of some future projects.  Expanding the reserve spending capacity of our schools and if past actions prove out, more of our states cash reserves will be spent down.  

In a recent estimate of states ability to carry on government services without any revenue, Wyoming ranked number one with reserves to pay for over 400 days of continuing government services. 

Other states did not fair as well with the estimates.  Most other states were around the 60- to 100-day number.  This means that our glide path is somewhat smoother and certainly less of an angle than most other states but make no mistake, the trend is still downward. 

If state spending continues its path and revenues continue their path, we are headed for some troubling times in the not-so-distant future.

I spent the last few years of my service in the Legislature as a co-chairman of the Revenue Committee.  Most of the proposals we worked on were to take a phased-in approach in establishing a better revenue stream for our state.  Better in consistency and dependability.  

Many have heard me say over the years that our dependency on minerals for tax revenues is both a blessing and a curse.  A blessing in that our tax burden is one of the lowest in the nation.  A curse in that we have become dependent on those revenues to provide a large portion of our government services. 

Our proposals to diversify our tax streams were much like taking a small bite at a time or using a phased-in approach, realizing that any tax increase has negative impacts to the private sector of our state’s economy.  

We should always remember that the other side to increasing state revenues is to reduce government spending. 

I am sure that during the next special session, reductions to the proposed budget will need to be introduced, debated and passed. 

The state budget has been shrinking over the years from the booms that we’ve enjoyed but further cuts will need to be made to realistic levels that can be sustained by our present tax structure.  

I’ve always viewed that possible solutions to the problems we face with our state budget would be to utilize the three efforts of reducing spending, using our reserves to help fill in the gaps and introducing additional tax revenues to shore up the failing mineral revenues.  I still believe that none of these efforts could stand alone.

The amount of reductions necessary to work our way out of this situation would be a disaster to many. 

Schools would be forced to close, consolidate, and reduce.  Other services and departments would disappear. 

Local governments would be short revenue for any improvements or even to maintain some services.  It has always been easier to suggest cuts rather than to implement them.

Using all of our reserves in one sweeping budget to make up the difference would be foolish and shortsighted.  The budget following would be a disaster.

Passing massive tax increases to meet the shortfall is not the answer either in that it would put many of our Wyoming businesses at risk. 

We’ve heard the term, “killing the goose that lays the golden eggs.” It would be appropriate with raising taxes to the amounts needed to eliminate the shortfall. 

Therefore, the proposal of utilizing all three approaches over a period of time is necessary. 

Our cash reserves have bought us this time to implement these changes, but we have squandered the past few years in not facing the reality of the situation. 

Cash reserves have been spent at a faster pace, increasing our fiscal descent.  Cuts have been slow in coming to some areas of our government.  And tax proposals have fallen on deaf ears.

Well here we are.  What will we do now?  What proposals will come forward?  The next special session in June might the beginning of our much-needed corrective course.  Let’s hope we get it right as our reserves are being depleted each year, we do nothing.  

My thoughts and prayers will be with our legislators and all that serve in this effort.  I would urge each of us to resist the tendency to throw stones at those elected to address these concerns.  These are not easy problems to solve.  I’m sure they will do their best in this effort.

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