The legislature’s Joint Appropriations Committee has wrapped up its first week of budget hearings. The committee heard from the governor early in the week and has started reviewing agency budgets. The governor wants to eventually divert money going into the state’s permanent mineral trust fund in an effort to keep the state budget where it is. While lawmakers have mixed thoughts on that idea, but they are more concerned that the governor has not given more thought to a major budget threat.
One who likes the governor’s overall approach is Laramie Representative Cathy Connolly. Despite the fact that revenues are projected to decline over $600-million dollars by 2018, Connolly said the state has plenty in reserve to not make massive budget cuts. She said the legislature has been socking lots of money away and now it’s time to slow some of that down.
“Right now I think that we need to I think to look at those savings policies that we have, so that we can do the kind of spending that we absolutely need to do,” said Connolly.
Connolly is a Democrat, but the majority of the Joint Appropriations Committee are Republicans who aren’t so sure the governor is thinking through the revenue decline. House Appropriations Chairman Steve Harshman said he doesn’t think the state needs massive cuts or layoffs and he wants to keep moving forward with some construction projects.
“We are going to use some revenue somewhere, I mean I don’t know anybody going to cut over ten percent and have reductions in force. I just don’t think we are at that point yet, and I don’t think the people we represent would want us to do that.”
But the thing the governor did not address to Harshman’s satisfaction is what to do about a projected 700 million dollar shortfall for schools. During his budget hearing, the governor made it clear he wants the state to cut back on school construction before he considers any tax increases.
“I believe it’s the wrong time to do that, not that I don’t think there’s an issue that needs to be dealt with. But I think that greatest burden of any increase would be put upon the industries that are struggling now.”
Harshman said that he disagrees with that approach.
“Well, it’s tough because if you aren’t going to do it with tax increases, there’s going to have to be more cuts.”
Casper Senator Drew Perkins is more direct.
“Until or unless we find a solution to the school side of the funding, that will sink the ship of state as far as the budget goes.”
Perkins said they have to do something.
“We are going to have to make a choice of are we going to fund schools differently, do we expand the tax base for schools, or do we look at and reorganize the whole issue.
School construction used to be paid by local taxpayers who would pass a bond issue. That would result in a temporary property tax hike until the new school was built. But a Supreme Court ruling in the 1990’s said the state was responsible for paying for school construction. At the time, Senator Phil Nicholas was a fan of a statewide property tax to pay for school construction. Then along came millions of dollars in money from coal leases, and school construction was paid using that money. But that money is disappearing and the state needs millions of dollars starting in 2017. Nicholas agreed with Mead that the industry would feel some pain. But he added they need to think big picture.
“What’s the higher burden, giving them a small tax now and begin to fill the lack of revenue that we are losing from coal lease bonuses or to wait until the hole is so big that you have to go out and make a large tax? And the only large tax that could fill that void is a sales tax.”
Nicholas is pushing lawmakers to at least consider legislation that could get them moving towards solving the problem this year, but he admits it could be a tough sell. Members of the appropriations committee say they can’t wait too long for a solution, because the next budget session could be worse than this one.