Opinion by Gov. Matthew H. Mead
The Birth of a Budget
By Wyoming Governor Matthew H. Mead
The birth of the state’s budget is a long, and not entirely painless, process. My experience from many calving seasons likely prepared me well for it.
While the process will end in late February or early March when the budget is finally born, the work to produce a healthy product started almost a year ago. Through summer, fall, and winter, at all hours of the day and night, just like calving, the budget required care and attention and got it. Then along come the last few months of the process, which are so critical to a successful outcome. Occasionally you wake up to bad news, like some of the revenue that was supposedly there yesterday is gone – the budget equivalent of lost livestock. You process the news and make the adjustments needed in order to run as lean an operation as circumstances require.
That’s a somewhat poetic comparison between budgeting and calving. Here are the gritty details. Numerous people in the executive branch – the Budget Division of Administration and Information, agency heads and personnel, my office staff and I – all were involved in budget development during much of last year. We saw that the standard budget had more than doubled over the past decade and did not believe such a growth trajectory was sustainable for the next decade. We looked for ways to bring the upward trend under control.
On Dec.1, 2011, after months of work, I submitted my budget proposal for the 2013-14 biennium to the Legislature. In my budget message accompanying the proposal, I noted that the budget invests in programs that bring opportunities – for education, construction, highways, cities, towns and counties. It invests in initiatives aimed to protect and improve quality of life. It focuses Wyoming programs on Wyoming priorities.
That budget also included cuts to ongoing spending, left money for savings (over $400 million), and left money available for the Legislature (almost $90 million) to use on its priorities. The budget did not make deep across-the-board cuts in agencies and programs, but rather strategic reductions – for example, a two percent reduction and 5.8 percent reduction in the standard budgets for the Governor’s office and A & I, respectively.
In January 2012, given large natural gas supplies and lower prices, a new revenue forecast came out. The new forecast predicted about $113 million less revenue for the next couple years than had been predicted in October. This wiped out the $90 million l had left for lawmakers to use, and meant I had to find, fairly quickly, millions more in cuts to produce a balanced budget. Since my budget proposal was already fiscally restrained, additional reductions were not easy to make – that’s the painful part of the process I mentioned at the beginning of this article.
I reviewed my recommendations and made reductions of over $60 million. I informed the Legislature of these revisions in late January. In a Jan. 24 letter, I set forth a number of proposed reductions. For example, I took off the table the proposal to increase salaries and give merit bonuses for University of Wyoming and state employees. All things considered, it seems better to keep salaries where they are than lay people off next year. I made other revisions that were strategic, by improving efficiencies, rather than making deep across-the-board cuts.
The January revenue forecast was a wake-up call. It called us to level off spending even more. It reminded us not to become complacent about revenues. It reminded us why we are fiscally disciplined in the first place.
And so, my budget includes funding for one-time projects. One-time spending comes with no promise that it will be included in the future. This approach gives the Legislature and me the opportunity to see if revenue forecasts improve, and if the projects are worthwhile. My proposals for one-time projects focus on improving infrastructure. Material costs are currently low, and Wyoming companies are ready to build.
My proposal also includes nearly $170 million for cities, towns and counties. Much of that money should be spent to improve sewer systems, roads, highways and fiber optics. Such projects will have a return on investment, because businesses need infrastructure to grow and relocate. Wyoming communities and the people who live in them need infrastructure to maintain a good quality of life and to attract visitors.
For similar reasons, I proposed an extra $50 million on top of the $50 million already in the budget for highways. Highways are our connectors – to each other and to the rest of the country. I did not reduce the amounts for local funding and highways in my January revisions because I felt it was important to provide a balanced budget without cuts in these two areas.
The Legislature’s Joint Appropriations Committee reviewed my budget proposal, including the revisions made in January, and I am pleased to say that we share a desire to slow down the growth of state government. I am also pleased that we agree there are priorities worth investing in right now. For example, my proposals for funding predator management and the wildlife trust remain intact.
I want to conclude here like I began – with a ranching analogy. The calving process is intense, it is long and hard work, and it is especially worth the effort when all ends well because future prospects improve. As I write this article, the budget is deep in its gestation. When it is finally born in late February or early March, I expect a healthy outcome – a budget that puts Wyoming on a path to growth and prosperity in the future.