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Budget

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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Legislature Will Have To Examine What Services Not To Offer, Gordon Says

in News/Economy
Wyoming State Capitol
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By Jim Angell, Cowboy State Daily

The state’s next round of budget cuts will require the Legislature to carefully examine what services the state should stop providing, Gov. Mark Gordon said Wednesday.

Gordon, during a news briefing, said the next cuts will start legislators on the difficult job of deciding which state tasks are required by state law and the Constitution.

“The implications of the next set of budget cuts are going to require that the Legislature not pass new laws about new things we’re going to do, but start considering the things they no longer want government to do,” he said. “Those are going to be hard discussions.”

Gordon already cut about $250 million from the state’s two-year budget in August to offset a projected $1.5 billion shortfall in state revenues. However, the cuts were only the first in a series needed to bring state spending in line with revenue projections.

Gordon said revenue projections prepared by state fiscal experts in July showed some unexpected improvement in the revenue picture,  and when combined with the cuts he made in August — which amounted to a reduction in state spending of about 10% — things looked a little more promising.

However, he said more cuts will be needed, even as the impacts of the August reductions are being felt.

“There are services that are being decreased,” he said. “There are people who have lost their jobs. There is consolidation that is happening.”

A new report on state revenues is expected next week and Gordon said it will help state officials get a decent idea of what must be done going forward.

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Gordon releases tight budget for next biennium

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Gov. Mark Gordon’s release of his budget proposal for the 2021-22 biennium on Monday came with a recognition of the declining fortunes of Wyoming’s mineral sector.

Gordon said his budget proposal — his first as governor — kept spending low without cutting programs.

“The point to me has been to understand what those budget cuts will mean operationally across the whole of government,” he said during a news conference Monday. “I think that’s a process that takes more time. We haven’t identified any programmatic cuts at this point.”

Between spending requirements set by law or the Constitution and limits on revenues — estimated to total $2.26 billion during the next two years — Gordon said he is recommending a budget that he said will keep spending low and reduce capital construction.

The budget for the General Fund — the state’s main bank account — recommends providing public schools with $161 million from Legislative Stabilization Reserve Account on top of the $1.7 billion schools are to receive from the Schools Foundation Program. In addition, he recommended $105 million be given to local communities.

Gordon’s budget proposes spending $94.7 million on capital construction rather than the $150 million proposed to his office. He also recommended spending $238 million on school construction and $21 million for one-time bonuses for state government employees.

“My goal in this budget was to take care of people first because they are key to a productive government,” he said. “I have mentioned several times how incredibly hard working people in Wyoming government are. And I recognize that they have not had the recognition that they have really deserved over time.”

Gordon, in his comments during the news conference and in the letter to the Legislature accompanying his budget proposal, said his budget was prepared with an eye toward changing economic conditions.

“These changes, including declining coal production and low natural gas prices, will impact how we fund government services over the next years and probably on into the future,” he said.

The Legislature’s Joint Appropriations Committee will begin its review of Gordon’s budget in a series of meetings to be held through December and January. The committee will forward its recommendation for a biennium budget to the full Legislature, which begins its 2020 budget session in February.

2021-22 BUDGET POINTS

  • Total proposed budget: $3.2 billion
  • Appropriation for capital construction: $94.7 million
  • Appropriation for local communities: $105 million
  • Appropriation for School Foundation: $1.75 billion
  • Appropriation for school construction: $238 million
  • Appropriation for Wildlife and Natural Resource Trust Fund: $12 million
  • Appropriation for Energy Commercialization Program: $25 million
  • Appropriation for the University of Wyoming: $438 million
  • Number of new employees: 35

State long-term debt is real issue of concern, legislators say

in Government spending/News
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By Cowboy State Daily

Wyoming’s short-term revenue and budget problems are not as concerning as the state’s long-term deficit, according to two members of the Legislature’s Joint Appropriations Committee.

Sen. Eli Bebout, R-Riverton, the committee’s chairman, and Sen. Mike Gierau, D-Jackson, said the Legislature needs to address the fact that for several years, state spending has exceeded income, with the difference being made up through a combination of spending cuts and the use of money from various savings accounts.

Gierau said the state has already made significant reductions in spending to address what is called the “structural deficits.”

“A lot of folks need to realize that … we have less employees in state government than we had eight years ago,” he said. “Government is smaller. Programs are smaller.”

While the state could use about $1.6 billion from its reserve accounts to resolve the issue on a short-term basis, the action would deplete those accounts and the outlook to replace that money is not good.

“Over the next five years, with declining revenues, those ‘rainy day’ funds are anticipated to start to shrink if we keep spending at the same levels,” Gierau said. “And we won’t have money, given our current revenue picture … to replace them.”

The decline in mineral revenue has had a significant impact on the state’s revenues and the Legislature will have to look seriously at some action to deal with issue on a long-term basis, Bebout said.

“The challenge is to not just kick the can down the road,” he said. “I think we need to start making progress on our future to deal with our structural deficit.”

Specifically, the state needs to make plans for the day when mineral revenues no longer contribute a large amount to the state’s income, Bebout said.

“The revenue stream and the way we generate revenue is changing,” he said. “Minerals will not be able to carry the load like they have in the past. We need to be prepared for that and start moving in that direction.”

Several legislative committees are looking at ways to boost the state’s income, including the creation of a statewide lodging tax, an increase in gas taxes, a possible increase in property taxes and a corporate income tax.

Over half of the anticipated deficit spending — $250 million — can be traced to education funding and a legislative committee recently approved a $19 million increase in education spending to account for inflation. Legislators argued the increase must be approved to comply with Wyoming Supreme Court orders regarding school financing.

Bebout said he disagreed with such mandates being handed down by the court and said education spending should be determined by elected officials.

“Quite frankly, I’m tired of the courts dictating how we spend money on education,” he said. “I think it should be up to elected officials, i.e., the Legislature to make those decisions. If you don’t like what we do, you vote us out, rather than have the court tell us what to do.”

Gordon’s vetoes detailed

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Gov. Mark Gordon vetoed 14 footnotes to the Legislature’s supplemental budget bill on Tuesday, saying many of them went beyond what is allowed under Wyoming’s Constitution.

Gordon, in his veto letter to legislative leadership, said most of the vetoed footnotes in essence created law and should have been addressed in separate legislation or were not directly related to the state’s budget. Others, he said, directed the executive branch to take certain actions in violation of rules regarding the separation of power between the executive and legislative branches.

Below is a list of the footnotes vetoed by the governor and his explanation for the action.

Governor’s office: The footnote would have directed the governor to review and report recommendations on how to make state permanent funds “inflation proof.”

“This provision is not related to the ‘ordinary expenses’ of state government … and should be a single-topic piece of legislation and should not be included in an appropriations bill.

Department of Administration and Information: The footnote directs the Department of A&I to prepare standard procedures to complete a cost benefit analysis of all future state leases.

“Because these types of provisions are substantive lawmaking, they should be placed in single-subject bills and not included in the budget act.”

State Engineer’s office: The footnote eliminated two positions in the office, even though the office was not requesting any additional money.

“The State Engineer’s office … is prepared to have one position eliminated, however, this budget cuts two positions instead of one and there is a person currently in the other position. I must … preserve the one filled position otherwise there could be an unintended riff of an employee.”

Department of Transportation: Two footnotes were vetoed. One would require the department to consult with a senator and representative before entering into long-term contracts for air service.

“This footnote raises a separation of powers issue because the Legislature … is controlling and managing the day-to-day operations of the executive branch — a practice that encroaches upon the inherent prerogatives of the executive branch.”

The second footnote directs the department to hire a consultant to conduct a cost benefit analysis of continued use of a state airplane.

“The subject and directives in this provision are beyond appropriations for ‘ordinary expenses’ of state government and should be ‘made by a separate bill’… Considering there was a separate bill contemplating the same intent that could not pass the Legislature I use my line item veto authority.”

Wyoming Business Council: Three footnotes were vetoed. One would require the WBC to use $100,000 of its budget to develop new markets for Wyoming agriculture products in Asian markets.

“There is nearly $2 million available for this mission in the ENDOW account and I believe that is the right funding source. My veto is based on legislative overreach into the affairs of the executive branch.”

The second footnote would bar the spending of some money from the WBC’s Business Ready Community Program without legislative action.

“Thus, as drafted, this restriction limits an appropriation already given.”

The third footnote would require the WBC to set aside $250,000, to be matched with private funds from Wyoming manufacturers, to hire and defense manufacturing procurement officer to help lure aerospace and federal defense contracts to the state.

“The spending direction in this section of the budget bill is narrow in scope and overrides the well-established process for economic development by directly instructing the outcome.”

Department of Education: The footnote directs the department to spend $100,000 to pay for a “pilot principal education program” to be run by Sheridan County schools, where a similar program is already in place.

“I believe school districts already have access to aspects of this program … (The footnote) bypasses the multi-professional team which works on state and federally funded support programs.”

School capital construction: The footnote sets aside $4.9 million for security projects in the state’s schools that are approved by the School Facilities Comission in consultation with local school districts.

“I believe my line item veto clarifies that this consultation can happen and that the commission will utilize its authority … but does not limit spending to only the specified priorities.”

Wyoming’s Tomorrow Task Force: The footnote creates a “Wyoming’s Tomorrow Task Force” program similar to a program in place in Tennessee that uses scholarships and mentoring to encourage students to attend in-state colleges. The footnote proposes a program similar to that outlined in failed legislation.

“This provision is not related to the ‘ordinary expenses’ of state government … and the creation of a task force should be done with a single-topic piece of legislation and should not be included in an appropriations bill.”

Flood mitigation: The footnote recommends that the State Loan and Investment Board use $5 million from federal abandoned mine lands funds to pay for flood mitigation projects on Bitter Creek in southwestern Wyoming.

“While I agree that Bitter Creek is a deserving project, I am opposed to the precedent of including AML funding in the budget bill acts.”

Military housing: The footnote provides $500,000 to serve as matching funds for design and construction needed to encourage the development of military housing in southeastern Wyoming.

“This project (has received) $3 million in a Business Ready Community Grant and a $1.3 million loan … The project proponent should return to the Business Council with an updated proposal…”

Higher education study: The footnote requires the University of Wyoming and the state’s seven community colleges to conduct a study to determine how bachelor’s degrees in applied science can be made more accessible throughout the state.

“This provision is not related to the ‘ordinary expenses’ of state government … and should be a single-topic piece of legislation and not be included in an appropriations bill. In fact, this was a single-subject piece of legislation that did not pass.”

Hicks predicts difficult budget sessions in 2020

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By Cowboy State Daily

If it was difficult for the House and Senate to reach an agreement on the state’s supplemental budget this year, things could get very tough next year when the Legislature reviews a 2-year budget, said a legislative leader.

Sen. Larry Hicks R-Baggs, noted that the biennium budget to be reviewed by the Legislature in 2020 will total about $3 billion, compared to the supplemental budget of about $200 million they debated this year.

Supplemental budgets are adopted in odd-numbered years to fund projects projects that come up between the approval of two-year budgets during even-numbered years.

Debate between the House and Senate over their different versions of the budget grew heated this year and at one point prompted the Senate to kill a bill financing state construction projects.

Hicks, a longtime member of the Senate Appropriations Committee, said such debates do nothing to help members of the Legislature get along.

“(The budget debate) always tends to drag out to the last minute,” he said. “What it does to the Legislature, it creates factions. We have a faction here and a faction here and a faction here. It strains those relationships.”

Gov. Mark Gordon on Tuesday signed the supplemental budget approved by the Legislature, although he also vetoed 14 “footnotes.” Such footnotes are often included in budget bills to provide direction for specific appropriation, but Gordon said many of those he vetoed went beyond what is allowed by Wyoming’s Constitution and actually affected existing laws. Such issues should be tackled in separate bills, he said.

Legislators on Tuesday began their review of the vetoes so they could determine whether they would attempt an override.

Wyoming Legislative Week-in-Review: Construction, Medicaid, minimum wage bills all die in Legislature

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By Cowboy State Daily

Funding for construction projects across the state fell in a unanimous vote in the Senate this week, joining several other high-profile bills that failed to make it through the legislative process.

SF 162 would have provided more than $50 million for various construction projects, including upgrades and new construction for community colleges and a new roof for the State Penitentiary. However, senators voted 30-0 against the measure in its final Senate review. Senate leaders including President Drew Perkins, R-Casper, said the bill’s death was part of the Senate’s attempt to save money to offset possible budget shortfalls next year.

Also killed was a bill that would have expanded the number of people in the state eligible to receive Medicaid. HB 244 was killed in its first review by the full House on Monday.

A measure that would have raised Wyoming’s minimum wage from $515 per hour to $8.50 also died. HB 273 was killed in its first review by the full House.

However, two bills aimed at limiting when voters can change their party affiliations were approved for further debate. HB 106 would require voters to change their affiliations at least two weeks before a primary election. SF 162 would require those changes to take place two weeks before absentee ballots for a primary election are mailed to voters — usually in mid-June. 

Also approved was HB 235, a bill creating a penalty of felony animal abuse.

Senate prepares for worst-case budget scenario that leaders doubt will occur

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By Jim Angell, Cowboy State Daily

Although Wyoming’s Senate is preparing for a worst-case scenario with the state’s supplemental budget, the leaders of both of the Legislature’s chambers are predicting their members will reach a compromise on the spending bill.

The Senate on Wednesday changed its rules to allow the late introduction of three bills proposing spending of about $45 million to support air transportation, education and the departments of Health and Family Services.

The appropriations are already contained in the supplemental budget bill making its way through both chambers, but Senate President Drew Perkins, R-Casper, said the Senate wanted to address the issues in separate bills should the supplemental budget die.

“If we can’t come to an agreement on the supplemental budget, we’ve got a backup,” he said. “There’s about four things that absolutely have to happen this session because they were uncompleted issues from the biennium budget last year.”

But House Speaker Rep. Steve Harshman, R-Casper, said he believes that a deal on the budget will be worked out and that the Senate’s backup plan is unnecessary.

“I told my secretary ‘Please don’t bring (the bills) into my office even if they do make it over because I’m not going to walk away from the process,’” he said. “It’s been here long before I was even born, it will be here a long time after I’m dead and gone and I’m not going to be part of trying to muck things up.”

The issue arose as the House and Senate looked at each other’s versions of the supplemental budget, which proposes spending needed between the even-numbered years when the Legislature sets a two-year budget.

As sent to both chambers by the Joint Appropriations Committee, the bill proposes spending of about $206 million, including $119 million from the state’s main bank account, called the “General Fund.”

By some counts, the House and Senate are $70 million apart in their versions, although both Perkins and Harshman set the difference at closer to $40 million.

The main differences between the House and Senate versions of the bill stem from beliefs in the Senate that the state should save its money, given uncertainties in the future of oil and gas prices, Perkins said, along with the idea the supplemental budget should only be used for emergency needs.

“The Senate views the supplemental budget as a supplemental budget, which by definition should be unanticipated needs or emergency needs,” he said. “A lot of those issues, we don’t believe, fall into those categories. The other side, too, is as we look at what we’re going to need next year, the Senate feels pretty strongly we ought to be saving money to cover what we’re going to see as a deficit in the school foundation program next year.”

That uncertainty prompted the Senate to kill a bill providing more than $50 million for various construction programs around the state, including repairs and upgrades at several community colleges and roof repairs for the State Penitentiary, Perkins said.

“We’re just trying to know where we can fill the gaps next year,” he said. “If I knew I was going to be short on my household income next year and I had some extra money this year, I’d set it aside because I’m thinking I’m going to need it next year — and that’s kind of where the Senate is.”

Harshman said many of the remaining disputes over the budget center on when spending might be necessary. He pointed as an example a proposed upgrade of the state Revenue Department’s excise tax computer system, which is based on an old computer language.

“It needs to be upgraded,” he said. “This was really a question of when. I think some senators thought maybe they don’t need this money for another 12 months and we can do it (in the biennium budget) net year. If that’s the case, fine.”

Both men said differences between the House and Senate on the budget are common and both predicted the supplemental budget bill would survive the session.

“We’ve still got plenty of time to resolve these things and get them moved forward and bring this in for a landing before the session’s over,” Perkins said.

Appropriations members say budget difference just part of the process

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By Cowboy State Daily

Differences between the House and Senate over the proposed supplemental budget are just part of the legislative process and center largely on what constitutes necessary spending, two members of the Joint Appropriations Committee said Thursday.

Sen. Eli Bebout, R-Riverton, chairman of the Senate Appropriations Committee, and Rep. Tom Walters, R-Casper, agreed that the two bodies will bridge the $70 million gap between the House and Senate versions of the budget.

“Being the wonderful process that it is, we’ll get together and figure out our differences and in the next couple of weeks we’ll have a good supplemental budget that Wyoming can be proud of,” Walters said.

The Legislature approves a two-year budget during even-numbered years. The supplemental budget is a mechanism to provide funding for needs that may arise between the Legislature’s budget session. The supplemental budget submitted this year to the Legislature by the Joint Appropriations Committee outlines spending from the state’s main bank account or “General Fund” of $119 million.

The House and Senate finished their independent reviews of the budget this week. The House added $51 million in spending, while the Senate cut $19 million. The Senate is now reviewing the House changes to the budget while the House is reviewing the Senate version. A “conference committee” will later be appointed to reach a compromise between the two versions.

Bebout said many in the Senate consider the supplemental budget a way to pay for emergencies.

“So I felt we ought to deal with emergencies and as we worked through the budget, that’s where the House had differences from the Senate,” he said. “That’s the process. We talk about it, we debate, you take the vote…”

Part of the difference between the two bodies stems from education funding. The House increased the “external cost adjustment” for schools — an amount designed to help ease the impact of inflation on schools — by $21 million. The Senate cut the amount by $9 million.

Another difference is a software upgrade proposed for in Department of Revenue. The House added $15 million to JAC’s recommendation, while the Senate cut it by $5 million.

“Quite frankly, I didn’t think a lot of the things we brought up as we worked through the process … in the House vs. the Senate, that we had $52 million in additional spending that we needed,” Bebout said. “I’m not saying that we shouldn’t have some, but I felt that was more than I was willing to accept.”

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