Budget Cut of Zero? Say It Ain’t So!

‘The time has come,’ the Walrus said, ‘To talk of many things: Of shoes—and ships—and sealing wax—Of cabbages—and kings—And why the sea is boiling hot—And whether pigs have wings.’
                Lewis Carroll, Through the Looking Glass

As Wyoming’s 2013 legislative session approaches, hand wringing continues over the governor’s call to cut agency budgets by eight percent. In the case of many agencies however, the cuts are curiously underwhelming.

The cuts at the Public Service Commission (PSC) are curious in the extreme, as they amount to zero.

How could that be? How can cutting eight percent from a budget mean nothing is cut?

Put simply, when it comes to government budget cuts, there is less going on here than meets the eye.

The role of Wyoming’s PSC is to regulate electricity, natural gas and telephone service, and to ensure utilities operate safely and at reasonable rates. To do this, it plans to spend about $15.7 million during the 2013-14 biennium.  Eight percent of $15.7 million is about $1.26 million, and yet its budget cut is zero. How did that happen? By magic? Not exactly.

Wyoming government agencies receive funds from three sources: the “general” fund, “federal” funds, and “other” funds. The general fund gets its revenue from part of the sales and use taxes, severance taxes, state investment income, and a few other sources. Federal funds come from the federal government, and other funds come from every other way the government has figured out to pick your pocket.

In the case of the PCS, about nine million of its $15.7 million budget comes from a tax on the retail revenue of utility and commodity providers, about $6.6 million from a tax on sales of telecom services, and $350,000 from federal grants.

The eight percent budget cut, however, is not a cut to an agency’s 2013-14 biennium budget; it is a cut to an agency’s 2014 general fund appropriation.

The PSC gets zero from the general fund — and voila, its budget cut is zero!

What could the PSC do to spend less? Well, one department in the PSC is called the Office of the Consumer Advocate (OCA). Its job is to represent the interests of utility customers. If you didn’t know a government bureaucracy existed to make sure utility companies weren’t ripping people like you off, join the club.

That department was created in 2003 and now costs about $1.9 million to run. It was supposed to sunset (government-speak for be shut down) on July 1, 2013. During the recent Corporations Committee meeting however, its supporters lobbied to have it hang around until 2023 (there is nothing so permanent as a temporary government department).

The OCA has six employees enjoying an annual salary budget of about $980,000. That means the average salary of those six employees is $160,000 per year, and that doesn’t include benefits, averaging an additional $62,000 per year. Not bad for a group most people have never heard of.  Given that this department was supposed to disappear in July 2013, and does little to aid consumers (as I have written about elsewhere) the PSC could do its part for hard-pressed Wyoming taxpayers by eliminating this department. 

So, if you thought the governor’s budget cuts were going to reduce the burden of government on taxpayers, or alternatively, that these budget cuts were cutting departments to the bone, think again.

As the Walrus said, ‘it seems a shame to play them such a trick.’