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Wyoming governor matt mead discusses the state budget amidst the oil price slump
June 4-7 2015, Wyoming Gov. Matt Mead saw nearly 600 Wyoming Vietnam veterans converge on Casper for the first State-sponsored reunion and "Welcome Home" event. (Image: Wyoming National Guard via Flickr)

Wyoming Gov. Matt Mead wants to “borrow” state savings to balance budget

CHEYENNE — Faced with declining mineral revenues, Gov. Matt Mead wants to “borrow” state savings to help fund local governments, pay for building and road projects, and keep some state-funded programs running.

Mead unveiled his budget recommendations for the upcoming 2017-18 biennium during a news conference Tuesday.

The governor’s plan includes using nearly $450 million from the $1.8 billion Legislative Stabilization Reserve Account, which is more commonly known as the rainy-day fund.

This money would be used for a variety of purposes, including:

– $152.7 million for building projects at the University of Wyoming, community colleges and other state facilities;

– $90 million for cities, towns and counties;

– $37.5 million for the State Capitol renovation project;

– $35 million for one-time agency funding requests; and

– $25 million for highway projects.

But Mead says he just wants to “borrow” the rainy-day funds and later backfill that money by changing a state law that currently requires 1 percent of mineral severance tax revenues to flow into the state’s Permanent Mineral Trust Fund.

By having that revenue flow into the rainy-day fund instead — along with some other budget transfers — Mead said the rainy-day fund in a couple of years will be even higher than it is now.

Mead said this strategy is one of the few options the state has to continue funding major projects despite the slowdown in the energy sector.

“I think we would send the wrong message if we just said we aren’t going to fund any of these things,” he said.

“Because, for one, we have the ability, and two, I think we would almost throw ourselves into a death spiral by not continuing to move forward on some of the things we think long term are good investments for the state.”

Related: Amid gas bust, Wyoming approves tougher well bonding rules

The budget recommendations follow the release of a report that shows Wyoming’s projected revenues through June 2018 will be about $617 million less than what the state anticipated at the start of the year. This was largely brought on by a slowdown in the state’s energy sector that has affected revenues related to oil, gas and coal.

Mead’s plan for the upcoming two-year budget, however, largely avoids cuts and holds most ongoing expenses at their current levels.

But even with the use of the rainy-day funds, Mead said he wasn’t able to recommend as much money as he would like for some areas.

The $90 million for local governments, for example, is less than half what the Legislature approved for the localities in the current biennium.

“I think it is critical that we get that $90 million,” Mead said. “And if someone wants to add more than that, I would support it because I think it is a true need for the state.”

Mead also said he wants to continue to support the state’s K-12 and higher-education system as much as possible despite the budget woes.

His budget maintains the current K-12 school finance block grant model and provides $218.9 million for school facilities projects. The governor also is supporting a plan backed by the Wyoming Community College Commission that represents a $2.3 million reduction from the current funding model.

Meanwhile, Mead is recommending the Legislature reduce UW’s state aid by $5 million. But he is recommending millions of dollars be approved for one-time funding requests.

This includes using the rainy-day account to fund $30 million for UW’s science initiative, $8 million for the College of Engineering facility and $9.5 million to continue work on the School of Energy Resources and the College of Engineering and Applied Sciences. He additionally is proposing $8 million be added to UW’s athletics program, but that money would come from the state’s general fund.

Several projects specific to Laramie County also made the governor’s budget. This includes $1 million for a monitoring well system in the Laramie County Control Area and $137,500 to hire a new legal assistant in the Laramie County district attorney’s office.

Mead also recommended authorization of $13 million for residence halls at Laramie County Community College and $2.9 million for the Children’s Discovery Center at LCCC. However, no state dollars would be used for those projects. The college would be responsible for finding other funding sources.

Mead’s budget additionally rejects a proposal to use $15.2 million in state general funds to help build a Fine and Performing Arts Center at LCCC.

The governor also is repeating a call for the Legislature to accept the optional federal Medicaid expansion.

In addition to providing health coverage to more than 17,000 low-income residents, Mead said the expansion would provide $33.4 million in net savings to the state’s general fund for the next biennium.

Even though the Legislature has rejected the expansion in the past several years — and despite the governor’s urging to accept the federal funds last year — he said this time could be different.

“We are in a different budget situation now,” Mead said. “And so if you don’t want to fund Medicaid expansion and don’t want to have the influx of those dollars into our state, and you want to send Wyoming taxpayers dollars to another state, you are going to have find $34 million. And that is not easy to do in this climate.”

Mead will formally present his budget plan to the Wyoming Legislature on Monday when he goes before the Joint Appropriations Committee. But some legislative leaders from both parties said they generally agree with the concepts in his proposal.

Sen. Tony Ross, R-Cheyenne, who co-chairs the JAC, said lawmakers will take a “hard look” at a number of his proposals, including the local government funding. But he said it appears to be a “conservative and thoughtful” plan that continues to fund a number of important initiatives.

“I’ve said this a number of times, but I just don’t think it’s time to dig our heads in the sand,” he said.

“We have to be proactive in diversification of our economy.”

Minority Floor Leader Rep. Mary Throne, D-Cheyenne, said she was happy that Mead didn’t overreact to the budget situation.

“I generally think it’s good the governor is not panicking, and that is something we’ve been advocating,” she said.

“I think he wants to maintain investments in our community — and I still want to look at whether enough is being done for people in his budget, and there are some expenditures I want to look at — but on the whole I think it’s good.

“The question will be whether he can get it through the Legislature.”

Click here to read Mead’s full budget proposal.

This article was written by Trevor Brown from Wyoming Tribune-Eagle, Cheyenne and was legally licensed through the NewsCred publisher network.