Our State Legislature will start up in a couple weeks for the 2012 Budget Session, but the Joint Appropriations Committee (JAC) has been busy for many days.
First off, every citizen in the state should always say a big thank you to members of this committee, as no one elected to the State Legislature works harder than its members, and they always make hard decisions. I always thought that the ability to say “no” is a great gift for members of this committee. As a committee they are fair-minded and truly have the state’s interest at heart. Remember, Wyoming is one of the nation’s best-managed states and it has a balanced budget – something that not many states have these days.
We have been fortunate as a state to have all of our resources, especially energy, but the price of natural gas is currently down and that energy source is a large part of Wyoming’s budget. The truth is, America’s natural gas industry has been too good at what they do: finding natural gas.
America’s economy is trying to turn around for better days, and the need for natural gas is somewhat lessened, so the price has dropped because supply and demand rules, and that is the way it should be. The 2013-2014 budget was first developed on natural gas prices of $4.10 per thousand cubic feet (mcf) last October, and in reality it is around $2.35 today at the Opal/ Kern River Hub, which is a good indicator of state prices. That difference is huge in terms of revenue for Wyoming.
Realizing this bad news, Governor Mead cut $64 million from his original 2013-2014 budget of $3.4 billion in late January. Everyone who is in state government has known for some time that projected revenues would be down, so they all knew spending would have to drop somewhere, and there lie the hard decisions. The good news is that Wyoming is growing, and sales and use taxes coming in for 2011 are 10.5 percent better than 2010, which is an increase of $36 million.
The legislature now has 20 days to approve the state budget, and of course the Governor has to sign it, so it will get debated some more. Everyone knows the price of natural gas will rise eventually, but how long it will stay low, no one knows, so the JAC has cut several million dollars in contractual services from certain places in the budget, but they voted to hold most of the state agencies’ standard budgets close to the same level as the current biennium.
Many people, myself included, who have seen our state government grow so much in the past eight to 10 years welcome these cuts to our state agencies. It is not a popular move, but a necessary one, as America may suffer because of the spending in Europe and other places, and Wyoming may suffer because of our national out-of-control spending. It is easier to cut agencies now to a reasonable level than later when we’d have to use the meat cleaver. We applaud the JAC and Governor’s work.