Wyo legislators prepare for tough budget session in 2018

Casper – While the Joint Appropriations Committee has been hard at work to balance Wyoming’s budget, the Joint Revenue Committee has looked at sources of income for the state.

As a member of the Revenue Committee, Sen. Dave Kinskey of Sheridan said, “Let me state right up front, we do not need to raise taxes.”

Kinskey noted, “Wyoming does not have a taxing and revenue problem so much as it has a spending problem.”

Budgetary inflation

Over the last several decades, Kinskey stated, “Wyoming grew out of control when we were fat, dumb, happy and rolling in dough. It’s just the natural way of human beings to get lax with our financial discipline when we’ve got plenty of money.” 

However, as budgets have tightened incredibly, the state has to get control of its budget, he said.

For example, Kinskey asked, “How do we go out and tell people to pay more taxes when we’re in the midst of trying to remodel the Capitol for $300 million – if we can even complete the remodel at that price?”

“People have seen how spending has risen so dramatically, and they will not stand for raising taxes until they feel like every reasonable thing has been done to get spending under control,” he continued. “That’s the perspective I bring to the Revenue Committee. I don’t like raising taxes.”

Revenue picture

At the current state, 70 percent of Wyoming’s revenue comes from oil, gas and coal.

“All three are down, and we’re in trouble,” said Kinskey. “Seventy percent of our expenses go toward three things – education; healthcare, principally Medicaid; and corrections.”

He emphasized, “We cannot balance the budget without impacting healthcare, education and corrections.”

The Appropriations Committee has accomplished a wide variety of cuts, which means sacrifices for everyone, including those in agriculture. He cited cuts to predator control programs, weed and pest programs, the Wyoming Livestock Board and more.

“We’ve seen double-digit cuts in many of these programs,” Kinskey added, noting the healthcare and dental care for senior citizens has been wiped out, and senior centers were cut by double digits, as well.

Education

The education sector has seen a cut of a mere 3.5 percent, however.

“We spend $17,000 per student every year,” Kinskey said. “Every state around us spends less – between $4,000 and $9,000 less.”

He continued, “If we multiply that difference by 91,000 students, we get half a billion dollars, which is the same amount as the size of the hole we’re trying to fill in our budget.”

Currently, Kinskey also noted Wyoming’s spending over national averages on a per-student basis is often rationalized with superiority in standardized national test results.

“Wyoming does two to four points better than our neighbors on those tests, but the test is on a 500-point scale. That is significant, according to statisticians, but is it significant enough for the difference in our spending?” Kinskey asked. “What’s missed in this whole discussion is over half our kids are still not proficient and math or in reading, and we’re still handing them a high school diploma. Where is our money going?”

Kinskey emphasized, “If we are going to continue to spend $17,000 per student and if we’re going to raise taxes to sustain this level of spending, then we had better get our money’s worth out of it.”

He also noted former Superintendents of Public Instruction have said, “I can deal with any cut I’m handed. I just need time.”

The premise makes sense, said Kinskey, adding, “My search this session is going to be to find a way to reduce the budget for education down over time but not to levels that hurt the classroom teacher.”

Taxes

Often, Kinskey said people are okay as long as they’re not the ones being taxed.

“We ask people if they want to tax booze and cigarettes, and they’re okay with it. We want to tax other people, sure. How about if we want to increase sales and property taxes? That’s when it all goes downhill,” he said.

However, taxes on items like alcohol and cigarettes result in funds that are negligible compared to shortfalls, whereas property and sales taxes have the ability to impact deficits.

“Eternal vigilance is called for when we look at taxes,” Kinskey emphasized.

With wind energy tax proposals defeated twice, Kinskey also noted that a bill to implement a gross receipts tax – the worst possible solution, in his opinion – was proposed.

“The gross receipts tax would take one percent of all income – regardless of whether or not there is a profit,” he said. “An income tax at least has the virtue that, if a person didn’t make a profit, they won’t pay a tax. Gross receipts tax doesn’t care whether there is a profit or not.”

However, he also emphasized that neither solution is viable.

Approaches

“I don’t know what the committee is going to do,” Kinskey said, speaking about the Revenue Committee. “The first philosophy is that we need a balanced approach. We need four legs on the stool.” 

The four prongs to the approach include diverting revenues, tapping savings, making cuts and raising taxes in a balanced manner.

“The other point of view – which is the one I ascribe to – is that we’re not going to raise taxes at this time,” Kinskey commented. “Once we begin to raise taxes, we take all the pressure off to cut budgets. As uncomfortable as the pressure is, we have to have pressure or the cuts don’t come.”

Increasing taxes without making cuts sends a signal to the public that the state prefers to tax its citizens rather than make difficult cuts, he explained.

Kinskey said, “My vote on the Revenue Committee has consistently been to vote ‘no’ to raising taxes, and that’s what I anticipate I’ll do during the 2018 Budget Session.”

Kinskey presented during the legislative breakfast at the Wyoming Natural Resources Rendezvous on Nov. 29.

Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at saige@wylr.net.