Experts: Legislature will need to spend money to save money

CHEYENNE — With the state Legislature’s budget session set to begin this week, lawmakers will likely spend hours debating how to address the state’s projected revenue shortfall. Yet some state officials and lawmakers hope part of that shortfall can be addressed through work that’s already been done.

For the last three years, the Wyoming Government Efficiency Commission has worked to find ways to make the state run more smoothly. Their work essentially wrapped up last July, when the commission sent 19 recommendations to Gov. Mark Gordon and the state Legislature.

The national consulting firm Alvarez & Marsal said the recommendations could save the state nearly $86 million in the 2021-22 biennium, if all of them were to be implemented. The firm, which was hired by the state in 2018 on a one-year, $1.8 million contract, said its preliminary recommendations could net the state savings of about $170 million over a five-year period.

It would cost the state $11 million to implement the recommendations over that same five-year span, according to the report, which was released last summer.

Recommendations approved by the Efficiency Commission that had the highest return on investment, as well as relatively low risk, included identifying and selling surplus government assets, ensuring reimbursements from the Wyoming Department of Health to medical providers were accurate and hiring more state auditors.

Those three ideas could potentially net the state about $30 million in savings over a five-year period for an investment of about $1.6 million, according to the report.

Gail Symons, a member of the commission, said at the time the recommendations were presented that Alvarez & Marsal had qualified risk based on several factors, including the political risk and potential pushback from a recommendation.

“[The risk included] the likelihood that the Legislature will hold their nose on it and do a thumbs up or thumbs down,” Symons told the Wyoming Tribune Eagle last July.

Spend money to make money

Some of the recommendations, like rehiring administrative positions in the Department of Audit and Department of Revenue, have already been done. But most of the rest are still up in the air.

State Auditor Kristi Racines, who served on the commission in its final year of activity, said it’s important to realize finding efficiencies sometimes requires the state to spend money to make money.

“We all want to save money, but sometimes being efficient means saving time, and more often than not, it doesn’t mean saving money right away,” Racines said. “Some of these efficiency initiatives take an upfront investment that you don’t necessarily see the return back right away.”

Rep. Jerry Obermueller, R-Casper, who served as vice chairman of the commission, said the commission operated with a “forward-looking” perspective.

“If people were looking for specific, immediate cuts, this wasn’t the process to identify that,” he said.

For example, one of the commission’s main recommendations that will be on the table during this session is to let Wyoming school districts request reimbursements through Medicaid for services like speech therapy provided to students in special education programs.

While such a program would cost nearly $500,000 in the first biennium of implementation, it would save Wyoming about $2.8 million by its third year – an example of the long-term payoffs that can come from the commission’s recommendations.

Last month, the Legislature’s Joint Appropriations Committee approved a bill setting up such a Medicaid billing program, and it will be up for debate during the budget session that starts Monday.

In a statement provided to the Wyoming Tribune Eagle, Michael Pearlman, a spokesman for the governor’s office, said Gordon supports exploring the idea with the Legislature and local school districts to determine the billing program’s feasibility.

More work needed

Rather than requiring legislative action, other recommendations outlined the need for more collaboration across departments. One that has the attention of the governor would consolidate some of the many boards and commissions to boost their efficiency.

In his email, Pearlman acknowledged that initiative might not get done this session, but reiterated Gordon’s interest in pursuing the possibility.

Meanwhile, other lawmakers say that not enough has been done to ensure the recommendations will actually be carried out, especially considering the commission was phased out this year.

Rep. Chuck Gray, R-Casper, plans to introduce a budget amendment that would effectively require each state agency to reduce its source spending, which is how much each department spends on things like computer software and other departmental needs, by a certain percentage.

In a statement provided to the Wyoming Tribune Eagle, Gray said he was disappointed Gordon and the commission have not done more to implement reductions in the budget, adding that nonbinding targets are unlikely to be met.

“The strategy that will yield true reductions in expenditure is to allocate the recommended reductions within the actual agency budgets,” said Gray, who served as an alternate member on the commission and attended its meetings. “For that reason, I’m preparing budget amendments to actually place reductions in the budget.”

Along with an amendment to address source spending, Gray plans to submit another amendment to cut state agencies’ funding by 1% across the board.

While every commission recommendation may not be implemented during the nearly five-week budget session, lawmakers and state officials like Racines hope the conversation started by the commission will continue beyond its lifespan.