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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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