The Wyoming Legislature wrapped up its work this week with concerns about the future. A downturn in oil prices and worries about a drop in investment income has lawmakers thinking that they may need to make some difficult decisions in the not-too-distant future.
On the day the Wyoming Senate cast its final vote on the state budget, lawmakers were dealing with a huge drop in oil prices. When they craft the budget, the legislature uses projected revenues. This year they were counting on oil production to help pay for the next two years. So when the drop hit the news,
Senate Appropriations Chairman Eli Bebout sounded the alarm.
"And Mr. Vice President, [Devils Tower Sen. Ogden Driskill] the sad thing about this is that we are still so dependent on minerals. And in order to make up the deficit in the next biennial budget to primarily K-12, you are going to have to go primarily intro LSRA and take out about $600 million more dollars," said Bebout.
About 50 percent of the revenue the state gets to pay for services comes from the minerals industry. But Wyoming has gotten less money from its minerals in recent years due to the decline of the coal industry. The LSRA is the Legislative reserve account that holds roughly $1.5 billion. That's basically what they've been using to pay for education.
They used to use coal revenue, which has been declining. The reserve account hasn't dropped much, but if lawmakers need more money and if the economy falters, that fund could be in short supply. Senate Revenue Committee Chairman Cale Case of Lander wondered out loud if they would raise taxes.
"This may be the last year we kick the can down the road do you think? I don't know," Case said.
To be fair, the state did pass a lodging tax this year and also approved a sales tax for municipalities. But that will not bring in enough to make up for the loss in coal revenue.
"You know the real horsepower things are a sales tax increase statewide and an increase in the property tax," said Case. "That's probably where we are going because we can't get them to seriously look at an income tax."
Casper Senator Charles Scott has long opposed tax increases, favoring budget cuts instead. In fact, he almost helped kill the budget in the Senate until he changed his vote. But even he has started to waiver.
"We are going to have to start and I don't think we are going to get out of this unless we do some of that," noted Scott.
Sheridan Senator Bo Biteman strongly disagreed. Biteman spent most of the session scolding Senators about voting down budget cuts he and others proposed to the point of frustration. Biteman is among those who fear if the legislature raises taxes, they'll just increase spending.
"I always have the position that the revenue is the easy way out. And if you don't address the underlying structural issues, the revenue is never not going to be enough. And so you're going to keep coming back and raising taxes more if you can't address the spending side," said Biteman.
Many argue that lawmakers have already cut millions out of state government, with the exception of one area, K-12 education. Wyoming lost a lawsuit many years ago that led to a school funding model that increases costs for inflation and other factors. In other words, schools are guaranteed more money. Many have tried to fiddle with that model with little success. Biteman said school funding has to be reined in.
"Our state revenues are flat, if not declining on a yearly basis and we can't continue to pour more money into something that's going to take more and more of the state budget," said Biteman.
Senate President Drew Perkins said that everyone in education is probably getting a raise this year while the rest of state government is not. The state has lost a number of lawsuits over school funding, but Perkins added that maybe they can try a different approach. He said that many Superintendents make close to $200 thousand a year, despite the fact that there isn't a provision in the model for the Superintendents to be paid that much.
"We've always talked about the constitutionality of funding. The other side of that of that question might be is it being spent in a constitutional manner. Are the districts collectively satisfying the requirements for equal opportunity for education in how their spending the block grants," said Perkins.
Jackson Representative and appropriations committee member Andy Schwartz said he is tiring of the education funding debate. He said the simple answer is to find a way to pay for it.
"If we can deal with the revenue side that changes the picture. And I think we've seen the money we've put into education in the last ten years has had really positive results with the education our kids are getting," said Schwartz. "So I'm hesitant to say that we need to cut."
Schwartz said lifting the many sales tax exemptions in the state would generate substantial revenue, along with some other reforms. In other words, we continue to go round and round.
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