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Gordon: No Special Session This Summer

in News/budget/Coronavirus

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By Ellen Fike, Cowboy State Daily

There will be no special legislative session this summer for the Wyoming Legislature to decide how to spend federal coronavirus funds, Gov. Mark Gordon announced Friday.

Gordon and legislative leaders announced that instead, they will work with a special “strike team” formed by Gordon to develop a plan on how to best spend the fund. Gordon will then present that plan to the Legislature later this month.

The state has received $534 million in American Rescue Plan Act funds to date, but another $534 million is anticipated to come sometime next year. The state also has until Dec. 31, 2024 to obligate the ARPA money and until Dec. 31, 2026 to spend it.

Gordon said he wants to develop a thoughtful, purposeful, transparent and strategic approach to handling ARPA funds. 

“These are dollars borrowed by Congress from many generations yet to come, and if we are going to use them, in my mind, those future generations that will be paying for them must also benefit from them,” Gordon said.  “ARPA funds, if we are to use them, must be for the greater benefit of Wyoming citizens, not for a few shiny distractions.” 

Gordon has assembled a team to better identify what the state needs to do to survive and what can be done to better drive to a future where all of Wyoming can thrive. 

Gordon anticipated directing a fraction of the federal funds already provided to the state to address emergency funding needs this year. 

For the use of the remainder of the federal funds, Gordon identified the following enduring funding criteria:

  •   Have a long-term impact or a return on investment 
  •   Not replenish budget cuts unless the replenishment can be sustained 
  •   Be sustainable and not add to the State’s ongoing financial responsibilities 
  •   Support stimulus over relief 
  •   Where possible, leverage the dollars through matching or buy-in programs  
  •   Create capacity for the future 
  •   Benefit a wide group of citizens 

To make sure that the criteria are met, Gordon and the Legislature’s presiding officers said a collaboration among legislators and the public will be important going forward. 

“The federal law provides ample time to be methodical in determining our priorities,”  said House Speaker Eric Barlow R-Gillette. “We can use this time to take public testimony, have robust discussions among the legislative membership to develop legislative priorities fully and thoughtfully, and to collaborate with the executive and judicial branches to determine the best and highest uses of ARPA funds.” 

“A product developed with months of deliberation will be significantly better than any legislation compiled in a few days of hearings and a week-long special session,” said Senate President Dan Dockstader, R-Afton. “We can utilize our standard budget hearing and standing committee processes to allocate these funds in a conservative manner during the 2022 Budget Session.” 

Gordon, Barlow and Dockstader said the federal money will not be used this year to reduce the state’s spending on schools and local governments. However, the state’s share of those costs in the 2022-24 biennium may be reduced because of the infusion of ARPA funds.

Gordon will present the initial recommendations for emergency uses of ARPA funds developed by his team to the Legislature’s Joint Appropriations Committee on June 15.

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Gordon Vetoes Limits On State Rent In Budget Bill

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By Jim Angell, Cowboy State Daily

Limits on the amount the state spends to rent office space proposed by the Legislature are unnecessary because the state has already committed to reducing that cost, Gov. Mark Gordon said.

Gordon, in signing the supplemental budget bill approved by the Legislature last week, also issued eight “line item” vetoes, using his constitutional authority to cut specific items from the budget.

One item he removed is a “footnote” from the Legislature reducing the amount the state Department of Administration and Information can spend on rental space from $24.8 million to $17.9 million.

In his veto message to legislators, Gordon said the Department of A&I is already working to reduce rental costs, so the footnote is unnecessary.

“The Department of A&I has committed to making cuts to the stat leasing program,” he wrote. “I have struck the prescriptive language because, on a practical note, an emergency or unanticipated leasing necessity could require more flexibility. Nevertheless, it remains the intent of the executive branch to reduce our leasing budget by 28%.”

Gordon also vetoed a footnote transferring management of the state Veterans Museum in Casper from the state Military Department to the state Department of State Parks and Cultural Resources.

Gordon noted that the museum’s management was given to the Military Department through legislation in 2008 and if the Legislature wants to return management to the Department of State Parks, it should do so with a separate bill, not through a footnote in the budget bill.

“A transfer of responsibility or authority for any particular program is appropriately the subject of a stand-alone bill,” he wrote.

Also vetoed was language requiring the Wyoming Business Council to administer the Wyoming Council for Women’s Issues for the state department of Workforce Services.

The two agencies are already working to give the WBC control over the program, Gordon said, so the legislation just complicates the issue.

The supplemental budget itself, which details more than $430 million in spending cuts to the biennium budget approved by the Legislature in 2020, was signed into law on April 1 by Gordon.

Gordon praised the Legislature for its hard work.

“These are not easy decisions to make, but this discussion on the fundamental question of the role of government has been a necessity,” he wrote. “Now, as more reductions are implemented, the debate will continue.

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Gordon Backs Effort To Eliminate Slush Funds

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By Jim Angell, Cowboy State Daily

Consolidating the state’s various accounts into one main “checking” and “savings” account will give Wyoming residents a better idea of how much the state has to spend on the services it provides, according to Gov. Mark Gordon.

As a result, Gordon is backing proposed legislation to eliminate what one legislator called a “slush fund.”

The state puts much of its income into its “general fund,” the main “checking account” used to pay for state operations. Over the years, a number of other accounts have been established to receive part of the money that would otherwise go to the general fund. The money in those accounts is then earmarked for use on special projects.

However, Gordon, the former state treasurer, said having so many separate accounts makes it difficult for the state’s residents to understand exactly how much money the state has available for its main programs, said spokesman Michael Pearlman.“

The governor … has emphasized that there’s a lack of transparency to the state’s finances,” Pearlman said. “He would like the average taxpayer to have a better understanding of how much it costs to provide the services they have come to expect from the state.”

Along those lines, Gordon is backing legislation that would eliminate one special account, the “Strategic Investments and Projects Account,” created in 2013.

The SIPA account received its funding from investment income that would otherwise have gone to the state’s Permanent Mineral Trust Fund.

However, Gordon said the account in recent years has been used to pay for work on items such as the Wyoming State Penitentiary and to fund the Legislature’s deficit control account.“

These are examples of new pots of money being created which deviate from the original purpose of the SIPA and complicate the budgeting process,” Gordon said in a statement.

Senate File 71 is sponsored by the Joint Appropriations Committee.

Senate Vice President Larry Hicks, R-Baggs, a member of the JAC, said the account was used as a place to put money when the state was seeing surpluses in its budget.

“In recent years, it has not been used for what its original purpose was, but rather as a slush fund to pay for programs and projects that should have come out of the state’s general fund,” he said. “We no longer have surplus revenues in Wyoming and it’s time to restore transparency in our budgeting process by eliminating the SIPA account.”

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Gordon Suggests $500 Million In Budget Cuts In New Proposal

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By Ellen Fike, Cowboy State Daily

Gov. Mark Gordon released his supplemental budget proposal on Monday, which includes additional cuts on top of the 10% he implemented in July.

This proposed budget reflects Gordon’s commitment to the Wyoming people that the state must live within its means in the face of declining revenues. 

Gordon’s proposed budget would cut state spending by more than $500 million and fulfills the constitutional requirement to present a balanced budget.

This proposed budget reflects total cuts to state agencies averaging 15%, but Gordon said he strived to preserve the health, safety and welfare of Wyoming citizens. 

“Our circumstances require that we make further reductions in order to meet our Constitutional obligation to balance Wyoming’s budget. These cuts to state agencies will result in the elimination of  both private and public sector jobs,” Gordon said in a release. “In approaching this supplemental budget, I have focused first on what is constitutionally mandated, thereby protecting the health, wellbeing and liberties of all Wyoming citizens.

“These are difficult cuts to make and they will affect people and communities,” he continued. “I regret that. While there were some efficiencies gained, I want to thank all our agencies for their hard work and helpful recommendations in such difficult times.”

Gordon is also proposing to simplify the state’s budget structure, which currently includes a large number of accounts where money is set aside for specific purposes. His proposal is for “One Checking Account, One Savings Account.”

“This would make the state’s budgeting process more transparent, reflecting my pledge for fiscal transparency,” Gordon said.

After July’s budget cuts, Gordon took a more strategic approach to his next round of reductions, achieving a balanced budget with some agencies absorbing deeper cuts than others.

“It is a fact that we cannot reduce our spending without looking at our largest agencies,” Gordon said. “The Department of Health, the University of Wyoming, the community colleges, the Department of Corrections and the Department of Family Services make up two-thirds of the state’s general fund budget.”

Among the Governor’s total proposed cuts is $135 million to the Wyoming Department of Health. The WDH cuts will impact programs including health care coverage for disabled and low-income residents, mental health services, substance abuse treatment and developmental preschools. 

“My proposed cuts to the Department of Health followed the agency’s recommendations and will minimize the negative impacts on the citizens of Wyoming. However, it is a harsh reality that at this point every cut will hurt,” Gordon said.

The $700 million general fund budget of the University of Wyoming and the community colleges makes up almost a quarter of the total general fund budget.

Last week, the UW board of trustees approved a $42 million reduction plan presented by UW president Ed Seidel.

To balance the budget and prepare for future revenue shortfalls, Gordon is proposing nearly 15% reductions to higher education.

Some agencies, including the Governor’s Office, will experience nearly 20% cuts if the Legislature approves this proposed budget. 

Gordon did caution that after these budget reductions there remains a nearly $300 million deficit still as of Monday, resulting from the cost of K-12 education.

This overrun is covered with dollars from the state’s “Rainy Day Fund,” an account the Legislature established. However, Gordon noted that if the shortfall is not addressed, this deficit could grow to as much as $600 million in two years.

This is one area where only the Legislature can act.

“A well-funded educational system is a source of pride and economic opportunity for our state. It is essential for our families and our children just as low taxes are,” Gordon wrote in his budget message. “Our circumstances require that we evaluate all school spending and consider its importance to our state’s future. These are dollars that go into local economies too.  I appreciate the Legislature’s Recalibration Committee’s hard work on this topic and look forward to their proposals.”

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CREG Report Released: Wyoming Still Looking At Deficit, But Lower By Almost Half Than Earlier Projections

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By Jim Angell, Cowboy State Daily

While the Wyoming’s main bank account is still expected to fall short of what is needed to pay for state operations for the next two years, the level of that deficit has been cut almost in half, according to a state report.

A group of state fiscal experts, in a report issued Monday, said the state’s General Fund, the fund used to pay for most government operations, will fall about $451.1 million short of estimates used to prepare the state government budget for the current biennium.

However, that is an overall improvement of almost $426 million from estimates released in May, the report from the Consensus Revenue Estimating Group said.

The improved picture for the fiscal 2021-22 biennium were caused by tax collections in fiscal 2020 — which ended in June — that were higher than expected, an improved revenue outlook for the current biennium and improved revenue estimates for the state’s Budget Reserve Account, which is used to supplement the General Fund when the state needs additional money.

The report said all three upturns were due in part to the federal government’s CARES program and other steps taken during the pandemic to ease the economic impact caused when businesses were closed and activities were restricted to slow the spread of coronavirus.

“The downturn in Wyoming’s economy and associated revenue collections are historic, especially for Wyoming’s top two industries — mining and tourism,” the report said. “However, the depths of the downturn, to date, have not been as severe as contemplated in the May 2020 projection in part due to actions of the federal government.”

In addition, the May report was issued at a time when national and state parks were forced to close by the pandemic, the report said.

“This October … report also recognizes the rebound in tourism experienced over the summer, crowning with record visitation in the moth of September at both Grand Teton and Yellowstone National Parks,” the report said.

The improvement in tourism contributed to the state collecting $81.3 million more in sales and use tax revenue than had previously been forecast, it said.

The report also noted that when the earlier estimates were issued in May, the state’s energy industry was feeling the impact of a global oil price war which has since ended. 

The end result was that while production and tax income fell from 2019 figures, they did not fall as far as forecast in May, it said.

Moving forward, the state will see continued economic recovery, but it will be slow, the report said.

“Looking forward to the remainder of this calendar year and (fiscal) 2021, the themes found within this forecast include a relatively muted, extended recovery in the extractive industries with more overall optimism in total sales and use tax collections,” it said.

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