- Associated Press - Monday, June 20, 2016

CHEYENNE, Wyo. (AP) - Wyoming Gov. Matt Mead is set to unveil budget cuts on Tuesday that he says likely will require a small number of state employee layoffs even as the state guards its massive “rainy day fund” against the possibility the current downturn in energy production will last for years.

Driven by downturns in energy revenues, Mead is proposing 8 percent cuts to the nearly $3 billion budget state lawmakers approved earlier this year for the two-year funding cycle starting July 1. To reach the 8 percent mark, he needs to propose about $232 million in cuts.

Mead said five largest state agencies will see bear the brunt of the cuts. Those are the departments of health, family services, corrections, the University of Wyoming and the state’s community college system. He said a few small agencies, such as the state Public Defender’s Office, won’t be cut because they’re already strapped for resources.

Mead is set to brief members of the state’s Joint Appropriations Committee on the cuts Tuesday morning in Cheyenne. He and his staff have been meeting with state agency directors to map out the budget cuts since a state revenue forecast in April warned energy prices were falling fast.

“It’s no secret that the Legislature and I have a lot of disagreements on the budget,” Mead told The Associated Press in a recent interview. “And I do believe that if we had followed my budget recommendations, that while we would still have to be making cuts now, they may not be as many cuts. And of course that includes what would have been the option of Medicaid expansion as part of that.”

State lawmakers earlier this year rejected Mead’s recommendation to accept federal funds to expand the Medicaid program in the state to offer health insurance coverage to roughly 20,000 low-income adults. Expansion of the program is a key element of the federal Affordable Care Act. State studies estimate that expanding the program would have saved the state about $30 million in the coming biennium by reducing pressure on other health programs.

“So, when I present the budget on Tuesday, I think it’s as good as we can do under the circumstances,” Mead said. “But I’m not happy with it because we’re cutting in places that I know are going to impact citizens of Wyoming, I know they’re going to be felt not just in the public sector, but in the private sector.”

Kari Gray, Mead’s chief of staff, said Monday that it appears about 10 state employees will lose their jobs due to program cuts. She said the final figure had not yet been determined.

Dean Fausset, director of the Wyoming Department of Administration and Information, said Monday that Wyoming had 8,566 employees as of Dec. 31, not counting workers at UW or the state’s community colleges.

Despite the decline in revenues, Wyoming has more than $1.5 billion cash in the state’s so-called “rainy day fund” - money that state lawmakers have set aside over the most recent energy boom cycle. They plan to spend roughly 10 percent of the fund per year to help cover what many analysts have said could be a 10-year downturn.

“The state’s trying to be disciplined, knowing that we have to trim our sails,” Mead said. “But at the same time, we have to continue to try to answer the question, what is the rainy day fund for? And I think it is for rainy days like we’re experiencing now, and I think it is appropriate to be using it now.”

Sen. Drew Perkins, R-Casper, sits on the Senate Appropriations Committee. He said lawmakers recognize that they can’t spend the state’s reserves all at once. “We recognize that the state and the savings, and the permanent mineral trust funds, and all those things, they’re not just ours, they belong to our kids and our grandkids,” he said.

Wyoming, the nation’s leading coal-producing state, has seen hundreds of layoffs so far this year as many of the nation’s largest coal companies have sought bankruptcy protection.

Jonathan Downing, director of the Wyoming Mining Association, said that while coal companies have gotten leaner than they’ve ever been, some companies have seen some recent increases in shipments.

“It has been a tough couple of years for the industry, but I think there’s still optimism out there,” Downing said.

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