Just when Laramie city government leaders thought they had successfully dealt with a $2.2 million reduction in state-shared funding, the other shoe came thundering down.
That latest thud was the realization a new formula determining how state money is allocated to local communities will mean an additional $500,000 cut for Laramie. That was by far the largest cut associated with the new formula.
After Laramie, Sheridan took a hit of $236,000 and Newcastle lost $117,000. Every municipality in seven counties — Albany, Goshen, Park, Teton, Uinta and Weston — lost part of their state-shared money.
The new funding formula was sponsored by Rep. Mike Madden, R-Buffalo, and shifts more state dollars to cities with volatility in sales tax collections from year to year. In effect, it is an attempt to soften the impact of “bust” years on those communities most affected when energy or extractive industries are down. The formula basically seeks to soften the blow of Wyoming’s boom-and-bust economy for cities most affected.
The logic here seems accept the boom-and-bust cycle and minimize the effect on communities that suddenly experience shortfalls. This flies against the efforts by Gov. Matt Mead and other state leaders to find a way to break that economic cycle by diversifying Wyoming’s economy statewide through the Economically Needed Diversity Options for Wyoming, or ENDOW, initiative and more.
But this formula isn’t just an aberration written into the 2017-2018 budget that can be easily modified when the next state budget is written. It was passed by the full Legislature and is now part of state law. Any change would require similar action by the legislature.
Part of the problem Laramie in particular faces when dealing with these funding issues is many legislators traditionally believe Laramie gets too much from the state. That’s because they equate funding for UW as money spent in Laramie. UW is a vital part of Laramie’s economy — and a healthy level of funding for the university is beneficial for Albany County as well as the entire state of Wyoming — but that doesn’t help pay for local government services.
It’s important to remember Wyoming’s tax structure makes cities very dependent on sales tax revenue. But Albany County ranks low because there is very little manufacturing or other equipment purchases here as compared to counties with large mining operations. Laramie’s generally remains slow and steady, whether there is a boom or bust in Wyoming.
So, Laramie city councilors and staff have no choice but to live with this reality. Certainly, they will make their feelings known to the legislators, but that is unlikely to help in the short term.
City Manager Janine Jordan appears to be approaching this situation the right way. She has suggested various delays and incremental cuts to the council but is showing no sign of panic or despair. She anticipates the city will manage the cuts as they have other recent budget reductions. She suggests residents be patient and go easy because there will be some reduced services and hours of operation in various city offices.
We appreciate Jordan’s approach, but have reservations about the long-term effects of delayed maintenance, reduced hours and other incremental cuts. All of these measures can cause potential problems later, and those problems are likely to come to a head at the worst times.