Wyoming Liberty Group
Wyoming’s Budget Blues
A Rainy Day Fund Raid with a Twist of Sour Lime
Wyoming stands at a fork in the road. Throughout the 2000’s, politicians played Santa Claus with a severance tax bonanza. Saving some of that windfall in a variety of savings accounts mitigated this pork-fest.
Now, as the minerals boom turns to bust, many of our elected representatives look covetously at those savings as a way to shield themselves from the difficult choices involved in limiting government to a level remaining taxpayers can afford to fund.
Governor Mead’s current budget proposal takes us down the wrong road.
The governor is rehashing his old strategy with a twist. As his call to raid the Rainy Day Fund failed last time, his call this time includes a provision to pay the fund back. But this provision, however imaginative, merely steals from Peter to pay Paul. Governor Mead plans not to raid, but to borrow – temporarily – from the Rainy Day Fund. The money to pay the Rainy Day Fund back will come from money that would have gone into the Permanent Wyoming Mineral Trust Fund (PWMTF).
Instead of putting difficult decisions off to a later day, the legislature must decline to make the change to W.S. 39-14-801(b) that would allow this diversion from the PWMTF and instead bring spending down to a level Wyoming taxpayers can afford.
The Consensus Revenue Estimating Group (CREG) projected general fund revenue to fall to $2.09 billion and the Budget Reserve Account (BRA) revenue to fall to $850 million in the 2017/18 biennium. This means the money available for government operations (including the $104.5 million BRA carryover), is $3.045 billion. This is what the governor has available to spend.
The governor presented an operating budget of $3.016 billion, amply covering government operations and leaving about $30 million extra. So far, so good.
Then comes trouble. The governor’s spending wish list totals an additional $488.5 million. But wait! We only have an extra $30 million! Where is this extra going to come from? You guessed it—the Rainy Day Fund.
What is so important that hard earned savings must be sacrificed? To start, more spending, $153 million more, on capital construction. Like what?
For starters, the governor wants $37.5 million to continue building the Taj Majal in Cheyenne. The also governor wants to spend another $50 million buildings at UW. Both the Capitol renovation and the building boom at UW require a review, as taxpayers cannot afford to fund pork barrel spending any longer.
Besides more buildings, what else is indispensable? The gas tax grab a couple of years ago just wasn’t big enough to create a long term source of funding for roads—go figure—so the governor wants to grab $25 million from the Rainy Day Fund to fund road maintenance.
Oh brother. What else?
In addition to its standard budget of $25 million, Gov. Mead wants the tourism department to get an additional $3 million from the Rainy Day Fund for international market expansion. While it is true, tourism is important to the state, and yes, advertising works, industries should pay for their own advertising and savings should not be used to pay for jet-setting trips for bureaucrats.
It wasn’t all bad news. Programs funded by the tobacco settlement fund, unsurprisingly, were costing more than the revenue available to pay for them. Governor Mead said it is time to evaluate these programs, they must contract, and he recommended a reduction on $12 million, almost covering the deficit of $14 million. Too bad we didn’t see more of this elsewhere.
The governor’s budget is the first of three steps in the budgeting process. In step two, the Joint Appropriations Committee reviews the governor’s budget then the budget will be debated on the floors of the House and Senate. Like last year, we hope the legislature reduces, if not eliminates, Governor Mead’s spending wish list but this time creates an environment of real and sustained spending reductions. Otherwise our children and grandchildren will be left with a legacy of debt and higher taxes.