Wyoming Liberty Group
Bills to hate and bills to love—this session had it all. With a large and growing budget deficit, the supplemental budget bill turned out better than expected. After the legislature bailed out Governor Mead’s deficit budget, it left a small budget surplus. However a large part of cash used to bail out the state’s deficit came from one-time funds. With dark clouds on the horizon for 2017-18, what might we expect for the next budget session?
“We need to look like we are doing something for that community.”
Wyoming Sen. Wasserberger, Joint Appropriations Committee, January 26, 2015
Facing declining mineral tax revenues, the desire to continue spending and the inability, so far, to raid the rainy day fund, Gov. Mead’s push to diversify the economy to create jobs and generate more tax revenue shifted into overdrive. His direction? The governor made yet another announcement about an investment by his chosen one – Microsoft’s data center. Yes, Microsoft is investing more in the state, but in exchange, the governor is doling out more corporate welfare. Corporate welfare is a costly way to appear to be doing something to diversify the economy to create jobs and increase tax revenue.
Reviewing how government taxes and spends, with an eye to doing less of both, is a good idea. But how to go about it? One option reviewed by the Wyoming legislature would have created a review called Vision 2020, but its ambitions focused on issues other than living within the means of taxpayers. After breezing through the senate revenue and appropriations committees and passing 25 to 5 in the senate, the house revenue committee killed the Vision 2020 bill with a 6 to 3 no vote. Had the goals of the task force focused on bringing the size of government in line with its falling cash flow instead of acting as a cover for the governor’s apparent desire to stream more money into the raidable rainy day fund, perhaps the bill’s proponents would have had better luck.
Facing a state budget deficit, declining revenues and the desire to continue spending, Gov. Mead asked, “What constitutes a rainy day?” This thinly veiled call to raid the state’s rainy day account to fund his spending priorities was ignored by the legislature. Instead, the legislature began the search for more revenues by developing a task force called Vision 2020. But if the legislature keeps its focus on revenue mining instead of spending withdrawal, it is merely delaying the rainy day fund raid –or worse, it is leaving a legacy of debt and higher taxes to our children and grandchildren.
To spend, perchance to Dream of spending; Aye, there’s the rub.
Wyoming’s government is searching high and low for money for priorities, but just what is top of mind? The government is facing a $222 million budget deficit in the 2015-16 biennium but has money squirreled away in other accounts to contine spending, but on what? Just what are these other accounts? But even more important: why one priority and not another?
Wyoming’s Department of Transportation tells the sorry tale.
Like the beautiful voices of the Sirens of Greek mythology, large savings accounts are luring Wyoming’s ship of state to fiscal doom. The deficit in Wyoming’s traditional spending accounts has increased from a relatively miniscule $4.4 million to a whopping $217 million, for a total deficit of $222 million in Wyoming’s 2015-16 biennium budget.
Has this deficit motivated Gov. Mead to call for lower spending? No. Instead of asking agencies to tighten their belts, or even reducing his own additional spending request of $156 million, the governor upped his supplemental by almost $10 million, leaving the state in a deficit position of $389 million for the biennium.
Governor Mead’s supplemental budget presentation outlined the vast amount of money the state has squirrelled away in savings accounts. According to Gov. Mead, “These funds continue to grow and they return investment income to support ongoing operations.” So far so good, as saving to create a fund to generate income to live from is a time-honored form of investment.