CHEYENNE – A supplemental budget proposal that includes roughly $430 million in general fund cuts and the elimination of 324 mostly vacant state positions has gained final approval from the Wyoming Legislature and awaits a decision from Gov. Mark Gordon later this week.
Commonly referred to as the budget bill, House Bill 1 outlines wide-ranging cuts to Wyoming government agencies in response to severe revenue downturns that the state saw last year, as the COVID-19 pandemic amplified the economic struggles of the state’s key mineral industries.
After the Senate and the House adopted separate budget proposals earlier this month with roughly $46 million in spending differences between them, lawmakers from both chambers concurred Monday on a budget agreement reached by a joint conference committee. Under the agreement, much of the funding for Wyoming Department of Health programs that the House wanted to restore will be included in the budget.
A main reason that lawmakers were able to reach a budget agreement with relative ease this session was due to provisions included in the American Rescue Plan, which was signed into law a few weeks ago. Under the federal stimulus package, Wyoming is set to receive roughly $1 billion in aid, but many of those federal dollars hinge on the state maintaining spending levels relatively close to previous years, as Rep. Bob Nicholas, R-Cheyenne, explained to his colleagues Monday.
“As a result of that, our friends down the hall were more conducive to coming to our position, because they had to not lose funds,” said Nicholas, who co-chairs the Joint Appropriations Committee. “And so, what was going to be a long, drawn-out fight turned out to be actually a pretty short, amicable sitting, because we had to do what we had to do.”
Ultimately, the supplemental budget proposal would reduce general fund spending by roughly $430 million in the state’s biennial budget, which was passed last year with about $3 billion authorized in general fund spending. While a substantial portion of the cuts was authorized by the governor last summer in response to the economic downturn brought by the COVID-19 pandemic, the final round of reductions was left to state lawmakers.
With the federal stimulus package hovering over negotiations, the two sides agreed to restore funding for several programs in the Wyoming Department of Health, including ones that provide in-home services to seniors and health care waivers to children with mental health needs and individuals with developmental disabilities. In total, the Wyoming Department of Health saw about $13 million restored to its budget.
Lawmakers also agreed to restore $8 million in appropriations to both the University of Wyoming and the state’s community colleges, along with an additional $15.5 million for UW to buy a student housing complex.
The report from the joint conference committee gained widespread approval in both chambers Monday, with the House endorsing it by a 52-7 vote and the Senate voting in favor of it by a 26-3 vote. The budget proposal now heads to Gordon, who has until midnight Thursday to decide whether to sign it into law, according to Michael Pearlman, a spokesman for the governor.
“It is currently under review, but in general, the governor is pleased that the Legislature agreed with many of the recommendations he submitted in his budget proposal,” Pearlman said in an email Tuesday.
The budget bill would also result in the elimination of 324 vacant state positions, Rep. Evan Simpson, R-Afton, explained on the House floor. While a vast majority of those positions are unfilled, Simpson said the budget cuts implemented last year resulted in 26 layoffs, and more than a dozen additional layoffs will come through the finalized budget bill.
“We can only speculate (that in) July, when the phase three cuts come into play, we’re speculating that there will be an additional 19 layoffs,” Simpson said.
Simpson, who serves on the House Appropriations Committee, noted those figures do not reflect the full picture of the cuts’ impacts, as they don’t include possible layoffs at UW and community colleges, as well as contracted positions that could go away through various reductions.
While ultimately not quite as steep as the $445 million in cuts approved by the Joint Appropriations Committee prior to the session, the supplemental budget’s reductions mark a continuation of a downsizing to Wyoming state government that has been ongoing since the mid-2010s, as the state has seen its general fund spending fall by $1 billion from the levels of its 2015-16 budget. The level of state employees in Wyoming now hovers around what it was in 2003.
Although a majority of lawmakers were supportive of the compromise reflected in the budget, a few members of the House raised concerns about the community-wide impact of eliminating state positions. Rep. Landon Brown, R-Cheyenne, pointed to the town of Rawlins, home to the Wyoming State Penitentiary, as an example of a place that will feel the effects of eliminated positions within the state’s Department of Corrections.
Brown and a few other lawmakers also criticized a portion of the budget proposal that transfers roughly $158 million in severance tax revenue to two of Wyoming’s primary trust funds: the Permanent Wyoming Mineral Trust Fund and the Common School Permanent Land Fund. The budget compromise ultimately split that funding, which comes from the state’s One Percent Severance Tax Account, evenly between the two accounts.
While understanding that those diversions are intended to boost K-12 education funding in the long run, Rep. Dan Zwonitzer, R-Cheyenne, raised concerns about the optics of such mechanisms.
“We are legitimately locking away savings, cutting state employees and putting that money to have investment returns to help K-12 education so that we don’t lose teachers is how I read that,” Zwonitzer said. “Maybe I’m reading too much into it, but I think it’s a legitimate concern.”
In response, Nicholas explained that those funds are tucked away for initiatives that “move the state forward,” such as capital construction projects and school building maintenance. Most of all, Nicholas said, the money from the severance tax account is stored away to hedge against inflation for future generations of Wyomingites.
“When we put it in permanent funds, we reap the benefit for the next 150 years, so it’s just a balance between where and how you do it,” Nicholas said.
After gaining approval on concurrence votes, House Bill 1 now awaits a final decision from Gordon, who began signing bills approved by the Legislature on Tuesday.