The Joint Appropriations Committee of the Wyoming Legislature made about 20 changes to Gov. Mark Gordon’s biennial budget Friday, reversing many of the governor’s 2024 budget line-item vetoes and sending a strong message to the executive branch to cap off the first week of the 2025 legislative session.
The vetoes were made by Gordon last spring after the Legislature had already adjourned for the session, then an attempt to call a special session did not receive enough votes.
The changes made Friday will not result in any more or less money spent by the state, but will dictate how money is spent.
For instance, Gordon overrode the Legislature last year and vetoed its defunding of diversity, equity and inclusion (DEI) programs at the University of Wyoming — but he still let the budget defund the DEI office.
The Appropriations Committee reverted that change Friday so that the UW DEI programs are once again defunded in the budget.
Last spring, the UW Board of Trustees cut the DEI office while still retaining some of its services.
Another change overrode the governor’s veto of a requirement that the Wyoming Stable Token Commission must only contract with only Wyoming-based companies.
If passed by the Legislature in February, the overrides made Friday would go into effect for the second year of the 2025/2026 biennial budget.
State Rep. John Bear, R-Gillette, co-chair of the Appropriations Committee, told Cowboy State Daily he still didn’t get everything he wanted and plans to address other issues through the supplemental budget, such as reducing state positions.
Bear said doing the overrides this way is something he’d been discussing with his colleagues for some time.
Historical Precedent
Don Richards, budget and fiscal administrator for the Legislature, said during the meeting that doing overrides in this fashion is not completely unheard of and has happened a few times.
But Sen. Ogden Driskill, R-Devils Tower, a member of the Appropriations Committee, told Cowboy State Daily he didn’t know veto overrides could be done many months after the fact like this and he’s never seen it done during his 14 years in the Legislature.
Driskill doesn’t believe the delayed overrides are significant and that they would have been made anyway if the Legislature hadn’t already adjourned by the time Gordon made his vetoes last year.
When meeting with the governor later in the day Friday, Driskill said he didn’t seem upset about it, and Bear said he had a productive meeting with the governor about the topic as well.
What It Represents
The overrides are likely a sign of what’s to come in the next few weeks as the Appropriations Committee takes a fine-toothed fiscal comb through the governor’s $692 million supplemental budget request.
Despite a relatively stable economic forecast from the Consensus Revenue Estimating Group (CREG) on Thursday, multiple members of the Joint Appropriations Committee have already said they’re not interested in funding any spending measures that aren’t for emergency costs in the supplemental budget.
Sen. Dan Laursen, R-Powell, a member of the committee agrees with this sentiment.
“If you could’ve brought it last year, don’t bring it this year,” he said. “Is it really an emergency? Are you really out of money?”
Rep. Trey Sherwood, D-Laramie, has a slightly different perspective, saying the supplemental budget is both a reflection of shared values and needs as they arise.
“If there’s a shortfall we can address, I don’t want my constituents to suffer,” she said.
She also sees the supplemental budget as a “living, breathing document” that should reflect changing needs as they arise, much like a household budget.
“In my household, we don’t just look at the budget once every two years,” she said.
What many like Laursen and Bear have said they do consider an emergency is the roughly $130 million Gordon has requested for wildfire restoration efforts and replenishing the state coffers that were completed depleted fighting a historic wildfire season.
“We’re all worried about fire funding and want to make sure we can cover next summer,” Laursen said.
House Speaker Rep. Chip Neiman, R-Hulett, said he expects a give-and-take process between the House and Senate on the supplemental budget and doesn’t anticipate a hostile relationship from the governor on it.
CREG Report
CREG reported a $20.5 million reduction in money available for the state’s General Fund and the Budget Reserve Account heading into the 2025 session due to a projected downturn in oil prices.
Driskill said he doesn’t view this change as a significant loss to Wyoming’s revenue picture that he perpetually keeps an eye on by checking oil prices each morning when he wakes up.
The reality of Wyoming’s state budget is that it relies on the boom-and-bust cycles of the minerals industries.
Because of such, the traditional approach of the Legislature has been to put a significant amount of funding in savings each year to protect for leaner fiscal years.
The Wyoming Freedom Caucus, which now controls almost all of the House seats on the Appropriations Committee and a majority of the joint committee as a whole from a political ideology standpoint, values a different approach that involves giving money back to taxpayers.
The Forecast
As a result of oil price and production changes, total forecast severance taxes to all state funds decreased by $13.7 million for 2025 and $11.9 million for 2026, a relatively small decrease in the grand scheme of Wyoming’s budget picture. There will also be a $2.3 million reduction to the School Foundation Program Reserve Account.
“It still has a robust balance, but it’s certainly something to take note of,” Richards said.
There is a reduction in the January 2025 price of oil forecast from $70 a barrel to $65 a barrel. However, Richards also acknowledged that the price of oil has already risen back up to $80 since the report was released on Monday.
“Our forecasts are not for tomorrow’s price, not for next week’s price, but the calendar year average,” Richards said.
If the new CREG forecast is accurate, it will result in a $64 million hit to Wyoming’s coffers.
CREG is also expanding its number of oil barrels produced from 104 million to 105 million.
“If nothing else, this is a signaling of significant opportunity in Wyoming to expand its oil production,” Richards said. “It softens the blow on the lower price and gives an indication that CREG is looking for a bit more stability and higher production within Wyoming.”
Driskill said he expects President-elect Donald Trump’s administration to drive oil prices down, which is a boon for consumers but not necessarily so positive for Wyoming state government.
“I pray he can open up the permitting as well so we can ramp production back up,” Driskill said.
Interests and dividends are already lagging by about $21 million, but $105 million in unrealized capital gains could assist Wyoming in shoring up this deficit. Due to the CREG report, the Wyoming Department of Education is now requesting $4.5 million more in the supplemental budget.
“The realized capital gains are a bright spot and could protect us from the down side,” Richards said.
There was also a $21 million reduction in state mineral royalties. This alone will result in a $7 million hit to the School Foundation Program.
Bear has had the state’s long term economic forecast enframed in a picture frame display outside the committee’s meeting at the state Capitol. This contains a negative outlook for the state’s School Foundation Program.
“We’d like to change that so it’s not negative, so that the state is in good fiscal order,” Bear said.
Richards also said there have been some concerning signs in the state’s sales and use tax revenue.
Department Of Health Grilled
A $11.2 million request the Wyoming Department of Health made for its early childhood services program for developmentally challenged children was rejected by Gordon in his supplemental budget request.
Gordon made that rejection because of direction from the Legislature in its biennial budget last year that capped funding for the program at $12.2 million for the entire biennium.
Stefan Johansson, director of the Department of Health, lobbied for it to be put in the budget Thursday, saying the $11.2 million figure represents how far behind the state is in funding the program.
The request is part of its $71 million program, $65 million which comes from the state.
Last year, the Legislature passed a bill that significantly changed the early childhood preschool system.
Sen. Mike Gierau, D-Jackson, spoke in support of the program, indicating he believes every dollar spent on early childhood improves K-12 outcomes later down the road for a child, which is supported by scientific data. He argued this will save Wyoming money down the road by investing early.
Johanssen also mentioned that he’s required to ask for this money each year under state law. Rep. Jeremy Haroldson, R-Wheatland, brought this point back up to Johansson at the end of his presentation, gently chiding him for not emphasizing it while requesting the money.
Leo Wolfson can be reached at leo@cowboystatedaily.com.
