State budget advances
March 8 marked the introduction of House Bill One and Senate File One, mirror bills titled General government appropriations. These supplemental budget bills were discussed throughout the week before being scheduled for third reading on March 12.
“This bill contains net appropriations reductions of $445,752,880 from the General Fund, of which $479,259 is from 2020 effective immediate appropriations and $445,273,621 from 2021-2022 biennial appropriations,” reads the fiscal note on the bill.
Additionally, the bill reduces 315 full-time positions and 21 part-time positions.
As of March 11 at 8 a.m., the House of Representatives had proposed 42 amendments on the second reading, with only 12 passing the body. In the Senate, only 21 amendments were proposed, of which seven passed the body.
Both the House and the Senate passed the bill on the second reading, with the third reading scheduled for the end of the week.
After Speaker of the House Eric Barlow called the House into session on March 8, the chief clerk read the bill, and Barlow referred the bill to Committee of the Whole, opening explanation of the bill for the session.
“There are no amendments on Committee of the Whole – or first reading – of the budget bill,” Barlow commented. “It will just be time to ask questions on what will be done.”
House Appropriations Committee Chairman Bob Nicholas (R-Cheyenne) and Vice Chairman Lloyd Larsen (R-Lander) took several moments to overview the budget and budget process, providing insight into the work of the Joint Appropriations Committee over the past year.
“From a big picture, think about this: when we left the Legislature last March, we had a $2.97 billion General Fund budget,” Nicholas explained. “When we left in March of last year, we had a balanced budget.”
Nicholas further noted the Legislature is required to balance the budget, and they accomplished their goals in 2020.
“Then, COVID-19 showed up, and by the time we got to May, we went to an $877 million deficit, which was closer to a billion dollars because of the statutory reserve amount. We had to make up for this,” he commented.
In reviewing the past budget cuts by the Wyoming Legislature, Nicholas explained in 2015-16, the standard budget for the State of Wyoming was $3.5 billion. In 2021-2022, the budget was $2.97 billion.
“Roughly, from 2016 to last year, we saw a $500 million reduction over the course of four to five years,” Nicholas explained. “What we have done with this new budget, being presented today, is another $500 million reduction. Our budget will be about $2.52 billion.”
Since 2015-16, Wyoming has seen an approximately $1 billion cut in state government. Nicholas called the number “remarkable,” noting the cuts have been extensive over the last few years.
“It’s interesting to see how those numbers flow and where we have been to put us in perspective,” he explained. “At the end of 2020, there was a surplus of $40 million. We left that for expenditures, in addition to having a balanced budget.”
“We have dropped our budget by $450 million in the last year,” Nicholas said.
The state’s budget shortfall of $877 million, as of May 26, 2020, was based on a 50 percent drop in oil production and a 50 percent drop in oil price.
“There was a time when oil was negative, and we also had a 25 percent drop in the price of natural gas and a 30 percent reduction in the price of coal,” Nicholas explained, citing data from the Consensus Revenue Estimating Group (CREG). “Finally, we had a 30 percent drop in sales tax.”
“But, those numbers were all speculative,” he added. “This was not the worst-case scenario. This is the biggest drop in state government in our history.”
By January’s CREG report and following the recommendations of the Joint Appropriations Committee, Nicholas noted a surplus of $16 million in the budget, with a full statutory reserve and no use of severance tax.
“The reason we were able to do this is because Wyoming had an increase in the price of oil, increase in gas and our sales tax has continued to improve,” he explained. “These numbers are based on what has transpired in prices over the past year.”
Beginning in May of last year, Gov. Mark Gordon froze positions and large General Fund contracts, which resulted in reversions of $67 million which were higher than expected.
Then, as of July 1, 2020, Gov. Gordon required a 10 percent General Fund reduction. The action went into immediate effective.
“Every agency is different in the amount of General Funds versus federal funds,” Nicholas explained, “So these look different in every agency.”
The total amount of cuts ended up at approximately 15 percent, which includes state major maintenance. If major maintenance is excluded from cuts, the cut is approximately 11 percent to the General Fund.
The governor further recommended an additional 10 percent cut, which was not implemented, pending passage of the bills being discussed in March 2021.
“We reviewed all the governor’s work and came up with this budget,” Nicholas said.
In the General government appropriations bill submitted to the Wyoming Legislature, the Wyoming Department of Agriculture received cuts of approximately $3.2 million, with footnotes emphasizing elimination of lines for hemp production and slight reductions in gray wolf depredation compensation, as well as increases for the consumer health and technical services divisions for supportive services and grants and aid payments, respectively.
The cuts amounted to 8.52 percent of all funds, but 11.18 percent of General Fund dollars.
The disparity in cuts between all funds and general funds is accounted for by the different actions taken by different agencies to achieve the 15 percent cut, explained House Appropriations Chairman Bob Nicholas, explaining that some agencies substituted federal funds to cover positions and reinforce budgets.
“Some agencies were able to move things around to limit cuts,” Nicholas commented.
The Wyoming Livestock Board also saw cuts, though they were very minimal, amounting to less than $100,000 in their overall appropriation.
The reduction was a 1.01 percent reduction in total funds, but a 12.29 percent reduction in General Funds.
As of March 11 at 8 a.m., no amendments had been made to either the Wyoming Department of Agriculture or Wyoming Livestock Board budgets.
The total average cuts is 15 percent across all agencies, including major maintenance.
This article went to press prior to the third reading on March 12. Following third reading and likely passage of the bills, a Joint Conference Committee will be appointed to reconcile the differences between the bills.
Saige Zespy is a corresponding writer for the Wyoming Livestock Roundup. Send comments on this article to firstname.lastname@example.org.