Wyoming's legislature meets next week and among the topics will be education spending and budget cuts. Gov. Mark Gordon joined Bob Beck to talk about a number of things including some of the budget challenges the state is facing.
Gov. Gordon: You know, we don't have the revenues, we need to make adjustments in programs. I made a large talk about there's not much fat left [to cut] and we'd already cut pretty substantially. So we've had several years of declining budget. And we're getting right down to the bone and some of the programs that we had to look at, you know, we're in health and and people say, 'Well, why did you focus on health?' We didn't focus on health, health makes a very large part of the budget. And, and if you're going to have to make these reductions, you're going to have to, you know, look at health and some of these programs like seniors, that that was a tough place to have to make those cuts. So, we tried to figure out ways that we could address the issues, but we're down to the very bare bones and, you know, there are a lot of new legislators that came in this year, many of them made "no new tax" pledges. I think they need to spend a little bit of time on the budget to understand exactly the problems that we face with the state going forward. So, I don't think we can continue to cut. But we don't really have any other options right now.
Bob Beck: I know one of the things you've always suggested might be a great idea is to look at exemptions. The committee that handles those, the revenue committee over on the House side has consistently rejected some of those things this week, they said no to lifting the sales tax exemption to data centers. What is the breaking point we're finally something gets done there?
MG: That's a very good point. And I share that same frustration that once we pass an exemption, we never extinguish it. And I can remember going back early before coal really took off in 2001-2002, Sen. John Schiffer at that time talking about, 'well, maybe we can let off a little bit on our sales tax on food, for example.' But we'll just do it as a holiday.' And of course, it never is a holiday. I think we're really close to the breaking point at this point. But, as I've pointed out over the last few years, I think people in Wyoming don't realize just exactly how challenged we are. So, that's been a big push for me this session is to say, 'let's simplify, this so that we have one checkbook and one savings account.'
BB: And what you're talking about, there is an example we've heard legislators over the years talk about one time money we can build this building, because we've got one time funds, you're saying don't do things like that?
MG: I think we really need to look at the budget, much as we do in our own household if there's, you know, something that we think we can build, but we can't maintain it. We shouldn't be building it. We should probably use those resources elsewhere.
BB: Let's talk about education. There was a recalibration committee that you had high hopes would come with some proposals about things beyond funding. Lawmakers came up with a bill that many are wondering if it's constitutional or not, it could cut $100 million out of education and also set the stage for future revenue to pay for that. I'm curious about what you think?
MG: Well, I don't really think they got to the issues. I think the legislature is looking at what it takes to fund education. And I know there are a number of us that are saying, 'what is it that we want education to do?' So, there's some talk about the basket of goods and other things. I'm particularly interested in sort of stepping back from this eternal question of, is there a way we can revisit the Campbell [court] cases? Is there a way that maybe the courts will say, 'gosh, you don't have the money you used to so you're okay to cut the funding?' I'd actually approach it a little bit differently. What are the customers really wanting from education? Whether that is business, parents, taxpayers? And that's kind of where I'm hoping maybe this discussion goes? Because I think the legislature has sort of four alternatives, One is that really not much gets accomplished. We wait another year. Another is a compromise that can be reached, which is some cuts and maybe some revenue enhancements. There's a possibility, I suppose, that the full $100 million will be cut. And then it's probably far less likely for taxes to be raised. As I said, earlier this year, the governor has no ability, nor does the superintendent to adjust the spending rate until we really don't have enough money. And that's, in my mind, a little bit of madness because we really should be ratcheting people's expectations to what our means are,
BB: It seems that if you went back to court and you lost, I think you are 0-4 as a state lifetime on school funding [lawsuits] for those of us scoring at home. But if you went back and you did in fact lose, then the whole debate, doesn't it become around what the court is saying you have to do and how you manage that? Versus maybe coming back this summer and say, once for all, let's just look at overhauling this whole thing. And do it cost based, follow the rules that were set out before and come up with maybe a more modernized system? Do you think that's a possibility?
MG: That's my hope. I think maybe go back, look at the whole thing top to bottom. Again, that's a little bit of what I'm talking about with what are the customers expectations, as opposed to how do we fund this? I think there is this notion that Campbell said, which is probably an appropriate thing, that you have to fund education before you fund anything else that isn't constitutionally mandated. And I think at that time, we were equating better education with more money spent. And maybe there's a different way to look at that.
BB: What's interesting, had you not had the CBM boom, you actually probably would have developed a revenue source outside of energy to fund education. That's at least my recollection of the case at the time. And so it just seems like you're having a difficult time explaining to people that you have to pay for education. And so that's why you're taking out of reserves right now.
MG: Yeah, and I think the mechanisms were put in place during those years to really guarantee education funding. And that's a little bit of the legacy we're dealing with now, we had no anticipation that we would see the kind of revenue shortfalls that we have witnessed over the last couple of years. And so we really know how strained that apparatus is now. I think whether it's this year, next year, or the year after, it will be broken, and we will have to do something.
BB: And that's, unfortunately, the way it's worked in the past, isn't it? It is that we wait for things to break. That'll be exciting, won't it?
MG: Well, that's the point that I've tried to make is that that's not a very sensible way to run education.
BB: What are you being told about COVID and where are we heading as a state?
MG: Well, we've done very well. We're really looking optimistically at spring, where we can start to have rodeos again, the college finals in Casper, Cheyenne Frontier Days, the other rodeos, Jubilee days, etc. We'd love to see those go off without a hitch. We're really working hard to make that happen. And the progress we're seeing is taking us in that direction. I spoke with some old colleagues on the Kansas City Fed last week and we were talking about roughly $1.8 trillion sitting on the sidelines, ready to be used for vacation. So a huge backlog of people wanting to get out and travel with the vaccination program going as it is in Wyoming and elsewhere in the country. I think we should have a much better chance at it this coming year.
BB: Governor, thank you so much and enjoy the legislative session.