Legislature 2014: What you need to know about the budget session
By Gregory Nickerson
— December 3, 2013
The countdown to the 2014 session of the Wyoming legislature began last week with the release of Gov. Matt Mead’s budget proposal for 2015-2016. Over the summer, the state posted record revenue from investments. Those returns have put Wyoming in better fiscal shape than last year, when lawmakers cut General Fund spending by 6.5 percent.
During the interim lawmakers held dozens of committee meetings to discuss issues and draft new bills. Now, at the beginning of December, most of those meetings have concluded. Legislators have identified the topics and funding priorities that will come into play in the 2014 budget session, which begins February 10 and lasts just 20 working days. But there’s still time for Wyoming citizens to be heard.
For the second year running, WyoFile plans to deliver in-depth coverage in the months before the legislature convenes. The upcoming budget session is shorter, and it’s important to follow because lawmakers will divvy up $3.4 billion in General Fund money for the 2015-2016 biennium.
The Joint Appropriations Committee is charged with crafting Wyoming’s spending policy. The 2015-2016 budget will be hashed out in this room in the State Capitol during four weeks of meetings in December and January. (WyoFile/Gregory Nickerson — click to enlarge)
With just four weeks of legislative action, it’s difficult for citizens to provide input because everything happens so fast. It’s also a challenge to affect budget policy because the Joint Appropriations Committee (JAC) makes many of its decisions between January 21 and January 24, two weeks before the session actually starts. If you really want to have your opinion heard, contact one of the members of the JAC before January 21 rolls around.
Through the interim, WyoFile has already covered Gov. Mead’s proposals for salary increases at the University of Wyoming, plus his recommendation for building a unified state network to boost Internet capacity across Wyoming. WyoFile has also kept a close eye on developments in pre-kindergarten education, and the ongoing discussions about Medicaid expansion and the Affordable Care Act.
In the next two months, the WyoFile team will build on that coverage to provide you the big picture of what’s happening in your citizen legislature, as well as the finer details that ultimately impact people’s lives. As a non-profit organization, our primary objective is to provide educational news coverage that enriches readers’ understanding of issues so they can become more engaged in civic matters in Wyoming.
Gov. Mead’s budget message
Last week Gov. Matt Mead (R) released his proposed budget for the 2015-2016 biennium, setting the stage for four weeks of legislative wrangling that will begin in February.
In the 2013 session of the Wyoming legislature, lawmakers cut 6.5 percent in ongoing spending for agency budgets, which amounted to a $61 million reduction in executive branch funding for the 2014 fiscal year. (Additional one-time spending of $139 million more than made up for the cuts.) In light of the most recent revenue projections released in October, Mead doesn’t think additional cuts will be necessary for 2015-2016.
“Financially we are on surer ground than we were a year ago,” Mead wrote in his budget message. The state saw revenues that exceeded forecasts, mostly through $346 million in capital gains on the state $15 billion in investments. In fact, the state saw a record $1.381 billion in revenue to the General Fund in the 2013 fiscal year that ended June 30.
“We are blessed that events in 2013 surprised us in a positive way,” Mead wrote. “We had a lot of moisture, a mild wildfire season, and a good deal of investment income that could only have come our way because we are historically frugal and therefore had money invested.”
Highlights of Gov. Mead’s budget proposal. (Legislative Service Office — click to enlarge)
Mead’s proposed two-year spending package provides for $3.408 billion in spending on General Fund programs. It also proposes spending $1.7 billion for K-12 schools and $420 million for school capital construction.
That’s almost identical to the $3.412 in General Fund spending Mead recommended for 2013-2014, which was cut down to $3.348 billion through legislative action in the last session.
The most significant of Gov. Mead’s budget proposals include $175 million in funding for towns and counties, to be split 60/40 between operations and maintenance. Mead also proposes $50 million for 2.5 percent raises for state and university employees. Community college employees will see a smaller raise of 2 percent because their administrations have had more flexibility in boosting pay through other means, Mead wrote.
Mead signaled earlier this year that he would push for pay raises in the next biennium budget, because some employees haven’t received a raise in four years. (Read this WyoFile piece for more.) The raises, and a merit pay package for high-performing employees, will be allocated according to an employee evaluation system called the “Hay Plan” that the state adopted in 2011.
Importantly, Mead wants the state to pick up the tab for increases to state employee retirement contributions that lawmakers mandate. If the contributions aren’t covered by the state, employees could see their required retirement contributions eat into their take home pay by 2.68 percent.
Notably, Mead’s budget proposal puts a strong emphasis on capital construction for state institutions, the university, technology, water pipelines, and landfills. Much of the construction funding is one-time spending, though some projects will add to ongoing maintenance costs.
Many of these projects will be funded out of the Strategic Investments and Projects Account (SIPA). Lawmakers created the SIPA last year as a vehicle for collecting unanticipated capital gains revenues from investments, and then holding them for specific investments. The new account helped to alleviate tension over the legislature appropriating unanticipated money for pet projects that Gov. Mead had no input in. Though the account is less than a year old, Mead has quickly adopted it as a way to promote his top priority-projects, which he hopes the legislature will also fund.
“Infrastructure is another form of savings and it does not fluctuate with the market,” Mead wrote. “Infrastructure projects from highways to school buildings, from technology corridors to water systems and from the Capitol renovations to college classrooms are long-term investments that return dividends to the State in real and diverse ways.”
Capital construction and other non-traditional investments in Mead’s budget proposal include:
$80M for capital construction at the Wyoming State Hospital in Evanston and the Life Resource Center in Lander.
$44.4M for National Guard buildings
$36M for tech center capital construction at Laramie County Community College and Eastern Wyoming College
$25.8M for the Gillette Madison Pipeline Project
$23.5M for enhancing programs at the university’s College of Engineering, plus capital construction for the High Bay Research Facility, and an endowed chair in Petroleum Engineering
$15M for building a unified state network,
$15M for the Wyoming Wildlife and Natural Resource Trust Fund
$15M for landfill remediation
$13.1M for capital construction at the Boys School
$10M for courthouse security
$10M in General Fund and $10M in federal funds to reduce the number of individuals on the disability waiver waiting list.
$6.8M total for the WyoLink emergency responder network
$5M for the remodeling of the university’s Arena Auditorium
$5M for the energy initiative programs and the orphaned wells project
$4.3M for Travel and Tourism promotion
$3.68M for air service enhancement
What’s not in the budget
Part of every budget involves making decisions on what not to fund. This year, Mead has advised against fulfilling a $50 million exception request for additional funding for the Wyoming Department of Transportation. That’s because the gas tax that passed in the last legislative session has provided enough revenue that Mead thought the state could use the General Fund money elsewhere.
Additionally, Mead has made clear that he does not support an optional expansion of the Medicaid program, which was a major issue in the 2013 session and remains a critical policy discussion in Wyoming.
Prior to the last session, the Department of Health released a report indicating that the optional expansion of Medicaid would bring in $737 million in federal funds between 2015 and 2020 to provide added services for Wyoming residents. At the same time, that federal money would generate about $47 million in savings to the state budget. Lawmakers and Mead have both taken a stand against the optional Medicaid expansion, on grounds that federal funds cannot be relied on.
“…I cannot, now, in good conscience, recommend the State sign on to a plan that is both poor in design and poor in implementation,” Mead wrote in his budget message. “The challenge for the State is to look for opportunities and continue to monitor what, if any, progress is made by the federal government to improve the ACA.”
Mead’s budget does provide $4.5 million for medical homes, aging and disability resource centers, immunization, and the e-health partnership. “These efforts are geared to improving access to care, prevention and more effective care,” Mead wrote.
Joint Appropriations Process
Before the legislature convenes in February, the Joint Appropriations Committee (JAC) will spend four weeks holding biennial budget hearings for each state agency. This small subset of six representatives and five senators works ahead of the session to settle out most of the debate before introducing a pair of identical budget bills into each chamber of the legislature. Those “mirror” bills are worked over separately by each chamber then brought together to create a conference bill that reconciles the differences in the House and Senate version.
The first two weeks of the JAC meetings will begin Monday December 9 and run until Friday December 20th, then recess until another session that runs from January 13 to January 24. The final week of the JAC meetings in January are reserved for “working over” the budgets, or making changes to the proposals recommended by Gov. Mead and agency heads. Click here for the full JAC schedule to see when agencies are scheduled to present. Those that don’t want to travel to Cheyenne for these lengthy hearings can listen to a live stream at the Legislative Service Office’s budget website.
If you’d like to get involved, see WyoFile’s guide to the contacting Wyoming lawmakers: It’s your legislature, get it’s attention.
WyoFile’s 2014 legislative coverage
Looking forward, WyoFile will be tracking the JAC hearings, plus providing legislative preview features on healthcare, Game and Fish Department funding, education, natural resource issues, and capital construction.
While Gov. Mead has followed the legislature’s lead on deciding not to move forward with optional Medicaid expansion, there may be further discussions on how many Medicaid and Medicare patients hospitals must accept. That’s become an issue recently because of a proposed for-profit hospital in Casper. Sen. Charlie Scott (R-Casper) plans to introduce legislation that would require for-profit hospitals to accept some percentage of charity care.
In education, lawmakers will continue to modify their plans for school accountability, and work on a bill to create a position in the Department of Education to coordinate early childhood programs across various state agencies. WyoFile reported on the pre-kindergarten issue in this article. Lawmakers could see opposition arise to the state’s accountability program, but legislative leadership seems strongly behind the effort, and will likely have the votes needed to fend off any proposals to roll back the policy.
Across many state agencies, lawmakers are seeing a need to reform retirement systems. In a letter released in response to Mead’s budget message, Republican leaders in the legislature noted the state has a funding deficit of $1 billion in its retirement system. A number of bills coming out of the Judiciary Committee and the JAC will aim to address retirement contributions for firemen, law enforcement employees, Emergency Medical Technicians, and other State employees. Mead’s insistence that the state should cover these costs might not go over well with legislators.
During the last session, battles between the moderate and conservative wings of the Republican party over social issues flavored much of the debate. Those intra-party tensions also shaped discussion of House Bill 104 that transferred duties of the Superintendent of Public Instruction to an appointed director.
However, battles within the Wyoming GOP likely will not be as intense as last year because it is a budget session, and philosophically controversial bills may not even make it onto the floor for debate. That’s because non-budget bills require a two-thirds vote to be introduced to the floor. Even so, different camps within the Republican Party may stake out opposing positions on spending bills.
The frustration toward the federal government over land use policies and healthcare will likely continue in Wyoming’s legislature, even as lawmakers craft a budget that spends billions in federal funds and mineral revenue generated on federal lands.
If you’d like to read more about where the legislature left off at the end of the 2013 session, read this WyoFile feature and this Capitol Beat blog.
Gov. Mead’s Budget Message
— Gregory Nickerson is the government and policy reporter for WyoFile. He writes the Capitol Beat blog. Contact him at greg@wyofile.com. Follow him on twitter @GregNickersonWY
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