Some of Albany County’s state lawmakers met with community representatives to discuss Gov. Matt Mead’s budget proposals Wednesday during the Legislative Luncheon.
Senate President Phil Nicholas, Speaker of the House Kermit Brown and senior Albany County Rep. Glenn Moniz all said they supported Mead’s proposal, but there were areas they would work with the governor to make adjustments.
After about 15 years of “extraordinary times” in Wyoming, where $3.5 billion was put into new public schools and more than $1 billion of investments in facilities at the University of Wyoming, Nicholas said the state could expect the budget constrictions to last at least six years, or as many as 10-12.
Even with budget shortfalls, the lawmakers said there were several areas of the budget that would need to continue to see funding.
Mead’s plan is “pretty clever,” if everything works according to plan, Brown said. The fund at risk, he said, is the state’s rainy day fund, the Legislative Stabilization Reserve Account (LSRA).
Based on projections from the Consensus Revenue Estimating Report (CREG), the state could borrow money from the LSRA and repay the account with revenue streams from capital gains and a statutory 1-percent diversion tax.
“If it all goes the way CREG projects, we’ll be even, or even ahead with the LSRA,” Brown said. “If it doesn’t, the LSRA is going to decrease.”
Brown said he is comfortable with the level of risk, based on the projections he’s seen.
If the state takes the path the governor recommends with his budget proposal, Nicholas said funds would be assigned to one-time costs, such as capital construction for schools, rather than ongoing costs, such as salary increases for government employees.
One source of state funding Laramie benefited considerably from in recent years is the Wyoming Business Council’s Business Ready Community program, which Nicholas said is “critical for the state.” But, he said, some of the allocations for those funds have gone to community enhancement projects “unrelated to economic development.” With tight economic times, the allocations should be prioritized differently, Nicholas said.
Nicholas said he also has concerns with the way the Wyoming Business Council divides appropriations. “Mediocre” grant applications, he said, could end up receiving funding, while “the best grant in the world” could be missed because the Business Council is “intent” on putting out grants every time the funding became available.
Laramie benefited several times in recent years from grants for business parks, as well as providing new businesses with buildings funded by Business Ready Community grants so the city can own and lease them to the businesses. With constrained funding possibilities, Nicholas said it would be important to ask who “is important enough to feed at the trough” by creating new jobs in the state.
“It is time to restrict these dollars,” Nicholas said.
Though Mead has been “very complimentary” of Laramie recruiting Tungsten Heavy Powder and Parts and Underwriters Laboratories, building facilities “because (Laramie) is hungry for a local business to get a new building” was “maybe not what we should be looking at,” Nicholas said.
Funding for local governments in Mead’s proposal is cut in half from what traditionally has been appropriated to cities, towns and counties, Nicholas said.
The state of Wyoming comprises approximately 30 percent or more of the state’s gross domestic product, Nicholas said. If the state continues to provide funding at levels where municipalities are not required to cut budgets and protect public employment, Nicholas said the state would be depriving private enterprises that rely on grants to provide jobs in Wyoming.
“We won’t ignore the rest of the economic sector which depends on productivity beyond just protecting salaries and wages of public employees,” Nicholas said.
The debate on when to use rainy day funds, Brown said, hinges on the question of, “Is it raining?”
If the School Foundation Program account is depleted to the point where there is a shortfall for school funding, it would have to be made up out of the general fund, Brown said.