A slimmer slice of the supplemental surplus?

Posted 2/15/11

The JAC’s proposed $215-million general fund supplemental budget stands in addition to the established, two-year, $2.9 billion budget the Legislature approved last year to carry the state through mid-2012. Federal funding for highways and some …

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A slimmer slice of the supplemental surplus?


Local leaders, legislators discuss budget

This week, state legislators will work through Wyoming’s supplemental budget bill, deciding, among other things, how much money to provide for local governments.

The budget bill, crafted by the Joint Appropriations Committee, recommends several critical departures from the draft budget Gov. Matt Mead proposed last month. Notably, the JAC’s budget fails to endorse the governor’s call to create a permanent stream of funding for local governments.

The JAC’s proposed $215-million general fund supplemental budget stands in addition to the established, two-year, $2.9 billion budget the Legislature approved last year to carry the state through mid-2012. Federal funding for highways and some other projects is in addition to that.

Powell Mayor Scott Mangold said he is frustrated that legislators failed to approve a measure that would have given more sales tax money to local governments (see related story on Page 3). He also is concerned that legislators have departed from Mead’s proposal to create a consistent funding formula for local governments.

While the media has publicized Wyoming’s budget surplus, Mangold said that surplus isn’t going back to cities and counties, where residents live. Rather, the money goes into “extra, extra saving accounts” for the state, he said.

“The state has extra money, but it’s not coming back to citizens. It stays with the legislators,” Mangold said. “The surplus isn’t being redistributed as it should be.”

The Joint Appropriations Committee’s proposal calls for $35 million in one-time additional funding for local governments. By contrast, Mead’s proposal would provide about $50 million.

Mead has called on lawmakers to divert one-half of 1 percent of the state’s statutory severance tax on minerals and splitting it into thirds: to local governments, highways and the state’s rainy day fund. The money currently goes into permanent state savings.

He said the $50 million through the fund would allow local governments to plan projects with certainty they haven’t had as their handouts from the state have waxed and waned in recent years with the fortunes of the state’s volatile energy industry.

“This is money that not only would be used to invest in infrastructure, not only to invest in our localities, but also to invest in savings,” Mead said last month. “It’s a good investment all the way around.”

Rep. Dave Bonner, R-Powell, who also is the publisher of the Tribune, said there is a possibility the Legislature will add an additional $10 million to its proposed $35 million with a budget amendment today (Tuesday) or Wednesday.

“There’s no way of saying if that will be successful, but I can say there is strong support for local governments in the Legislature,” Bonner said in an e-mail. “After all, everyone has a city-county constituency. I have not heard one legislator suggest that any city/county should raise their local sales tax before coming to the Legislature for funding assistance. No one down here promotes tax increases.”

For the current biennium, the Legislature provided $87.5 million in direct payments to cities and counties — reduced from $145.7 million in the 2009-10 biennium. The state severance tax distribution provided roughly $78 million for cities and counties in the 2011-2012 budget.

“We have been quite generous with the local governments and will continue to do so when they also have problems,” said Rep. Pat Childers, R-Cody. “It has been announced that we have a ‘projected’ budget. That projection could disappear.”

While the state is saving money in its “rainy day” fund, Mangold said that things are rainy for some city governments, such as those in Cheyenne and Rawlins, where they’ve fired employees. Powell did enact a hiring freeze, but has not had to lay off any employees.

“It’s a rainy day for a lot of those communities,” Mangold said. “It’s still a rainy day. Powell doesn’t have it as bad as some communities … (but) we’ve learned to not start projects unless it’s absolutely necessary.”

Mangold said city governments need a consistent funding model like the one Mead proposed. Under the governor’s proposal, the funding diversion to local governments would have been in place for at least seven years.

“We try to plan ahead, but we can’t plan ahead,” Mangold said. “We’re at the whim of the legislators.”

Mangold said it’s difficult for Powell to plan five years in the future, because there’s no way of knowing what the funding will be in five years.

With no long-range funding plan from the state, “just maintaining from year to year is no way to run government,” Mangold said.

“The state doesn’t have a consistent funding stream,” said Rep. Elaine Harvey, R-Lovell, in an e-mail to the Tribune. “We are dependent on most of our income from minerals and that includes a volatile natural gas market. We are dependent on the winters being cold, the East Coast not developing their newly discovered supply, the market holding steady and the federal government not allowing coal or natural gas to generate electricity.”

City Administrator Zane Logan said he understands state funding goes up and down with the energy industry.

“We know it wouldn’t be an exact amount (each year), but at least you’d have something to go off,” Logan said. “As it is, we’re just at the mercy of the Legislature ... there should be a way of analytically doing this.”

Harvey noted that state agencies also face tighter budgets, just like city governments.

“The state is operating under hiring freezes,” Harvey said. “We have not restored the 10-percent cut to state agencies that was enacted two years ago. The state is not asking local governments to (do) more than we are doing within state government.”

Logan said he appreciates the state’s position and is glad that lawmakers are conservative with state funds. He added the city of Powell aims to “demonstrate at a local level how to be fiscally conservative and still balance services and infrastructure.”

While he understands the need for saving money from Wyoming’s surplus and applauds legislators for doing so, Logan said he thinks the state also should consider the needs of residents here and now.

“There comes a point where you have to think about and look at the businesses and people of Wyoming,” he said.

(The Associated Press contributed to this story.)