CREG Report Could Reduce Budget Cuts
Wyoming’s revenue forecasting arm known as the Consensus Revenue Estimating Group or CREG had some good news for state officials. CREG says Wyoming’s general fund will see an increase of $141 million from January projections, but state lawmakers and the governor say it’s good news, not great news.
The governor and legislature use the fall CREG report to help determine how much money they will have to spend in the upcoming legislative session. Wyoming’s revenues have dropped substantially in recent years and so while this is just a modest increase, Governor Matt Mead is pleased that it’s not another decline.
“The revenue resembles where we were in 2009 and 2010 and so it’s still not where we’d like to be at all, but it’s still better news than we thought.”
After massive budget cuts over the last couple of years, Mead feared that when the 2018 budget session rolled around that the state would be facing serious cuts in education and more cuts in government. He says things have changed.
“Four months ago it seemed that we were going to be a $100 million short of meeting our standard budget, now we know we will not only meet our standard budget, but we’re going to have a little extra.”
But it’s just a little extra. In fact, when one looks at the numbers, the forecast is actually a little flat. Senate Appropriations Chairman Bruce Burns points out that legislators will still be using reserve funds to balance the budget. Burns says the long-range CREG forecast shows that revenues will not return to where they were a few years ago, so there is only one solution.
“There’s no question we are going have to be cutting more to get down to what the new reality is gonna be.”
But Speaker of the House Steve Harshman disagrees.
“No, I think we are about done cutting.”
Not an insignificant voice in all of this, Harshman says lawmakers have already cut a lot.
“When you look at our general fund budget it’s over 13-percent smaller when you inflation adjust it from the 2003-2004 budget, so we’ve got one of the smallest budgets now that we’ve had in many, many years.”
Harshman says the revenue numbers tell him that large cuts to education are no longer necessary and he thinks there are some cuts they might want to go back and re-visit.
“I know there’s a cut to the cervical cancer program, I just know that will go back in. I think the Department of Health which has 40-percent of the state’s budget, it's been cut dramatically. Care for our elderly, that’s going to be the next big issue in our state over the next ten years. So I think all those are things folks will look at.”
Senate Minority Leader Chris Rothfuss loses patience with those who want to cut more.
“The reality is that over the last few budgets we have cut so significantly and so substantially that it will cost future legislators just to get us out of the holes we are putting ourselves in.”
Rothfuss sites delayed maintenance and prevention programs as issues that will cost the state down the line. Rothfuss is also worried that the slight revenue increase will keep legislators from passing, what he calls needed revenue increases, to make up for the downturn in the energy economy.
“There will be legislators that will look at the CREG report and feel that things are turning around and if we just wait it will all be better. The CREG group did not say that, at any point in the report, when they project out into the future, they project a flat future.”
CREG Co-Chairman Alex Keane agrees with that to a point. He says the energy industry is not likely to rebound soon, with one possible exception.
“The place we see where there is some opportunity for improvement is really in the oil sector. Looking at oil production numbers we could see some volatility there to the positive, so any additional production could generate some additional returns to the state that are not forecast in this.”
Governor Mead says this backs up his efforts to try to enhance Wyoming’s economy through diversification. Despite some of the optimism, House Appropriations Chairman Bob Nicholas admits he’s still concerned.
(Laughs) “Not having enough revenue scares me.”
The governor will present his proposed budget to the legislature’s Joint Appropriations Committee in December.