- Associated Press - Thursday, February 11, 2016

CHEYENNE, Wyo. (AP) - The state of Wyoming would spend through roughly $1 billion of savings over the coming two years under a budget bill that cleared a crucial committee vote this week.

The Legislature’s Joint Appropriations Committee on Wednesday night approved the general government appropriations bill for the two-year period that starts this July. The House and Senate will start hearings on mirror versions of the bill next week.

Faced with low energy prices and economic forecasts that predict increasingly tough times ahead, the committee voted to impose a 1.5-percent budget cut on most state agencies over the next two years. The Wyoming Department of Health would be exempt from those cuts.

The committee rejected Gov. Matt Mead’s proposal to spend roughly $450 million out of the state’s $1.8-billion “rainy day fund.” Mead had proposed reducing the flow of energy revenues into permanent savings and diverting that money instead into the rainy day fund to keep it intact over time.

Rep. Steve Harshman, R-Casper, is chairman of the House Appropriations Committee. He said Thursday the committee voted to reduce spending out of the rainy day fund to $310 million over the next two years.

Of that $310 million, Harshman said the committee voted to allocate $36 million to cover general government operations, $90 million for local governments and $80 million for school capital construction. It would leave the last $104 million in reserve.

In addition, Harshman said the bill calls for spending all the roughly $675 million the state how has in reserve for schools over the next few years.

“We’re going to spend a lot of savings,” Harshman said. “Probably a billion worth of savings in the next three years.”

Sen. Tony Ross, R-Cheyenne, chairman of the Senate Appropriations Committee, said Thursday the committee approached the budget bill with the aim of narrowing the gap between ongoing revenues and expenditures to avoid a structural deficit in the face of falling revenues.

Wyoming for years has relied on federal coal lease bonus payments to fund school capital construction. However, with the coal industry increasingly on the ropes, the state now predicts those funds are going to evaporate.

For the two-year funding cycle that covers fiscal years 2019-2020, state financial analysts have said recently the school foundation program faces a shortfall of over $500 million.

Ross said the state now is spending the last of its coal lease bonus money on school projects.

“But we can’t continue on the trajectory we’re on right now,” Ross said. “There’s $490 million plus in the pipeline right now, the money’s been appropriated. We’re still continuing to do stuff. But at some point in time, we simply just don’t have the money.”

Democratic lawmakers say they’re disappointed the committee rejected Mead’s recommendation to accept federal funds to expand the Medicaid program to offer health insurance to some 20,000 low-income adults. The full Legislature could reconsider the issue through a budget amendment.

Mead has said expanding Medicaid promises to save the state more than $30 million over the coming biennium by reducing demand on other health programs. However, the Wyoming Legislature has voted repeatedly in recent years to reject the expansion. Many lawmakers saying they don’t trust federal promises to continue to pay the bulk of program costs.

Rep. Cathy Connolly, D-Laramie, serves on the House Appropriations Committee. She issued a blistering statement on Thursday criticizing committee Republicans for cutting programs and failing to recommend Medicaid funding.

“The Joint Appropriations Committee continues to slash and burn their way through the state’s budget, cutting much needed programs that would benefit the lives of the most vulnerable in our state,” Connolly said.

Harshman said he doesn’t expect the full Legislature will reverse its post position on Medicaid expansion. Expanding the program to cover low-income adults is a key element of the federal Affordable Care Act.

Harshman said he believes many legislators have concerns about the prospect of subsidizing health insurance coverage to people who are able to work.

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