State budget slashed by ten percent

“Put simply, we don’t have enough income,” said Governor Mark Gordon last week as he announced a 10% cut across the board on the state’s budget. Wyoming has lost roughly a third of the income it counts on the pay the bills for every program in the state, the governor said, and further cuts will be coming.

Revenue projections suggest that the state’s general fund will have an almost $1 billion shortfall, plus an additional $500 million for school funding. Budget reductions will include mandatory furloughs, a reduction in major maintenance spending, consolidation of human resources personnel across agencies and the loss of jobs for state employees.

During a press conference last week, Gordon explained that the energy industry has been under enormous pressure and has seen significant decline. As an example, he stated that Wyoming had 33 oil rigs running right now; today, there is only one.

Wyoming cannot rely on its rainy day account to see us through the decline, Gordon said. The account might last about a year, “and then we have nothing to fall back on”.

The governor pointed out that it is his constitutional duty to balance the state’s budget.

“I have to reduce what our expenditures are,” he stressed. “I have to cut the budget to make sure that we have a balanced budget”

The first stage of the reductions came at the beginning of the year, when all big contracts were cut and positions were frozen. The next step is the 10% announced last week, which involved cuts that have been identified by each individual agency.

“There is no part of government that isn’t feeling the pain of 10%,” Gordon said, noting that citizens will all feel the effects too. The cuts will include general fund dollars that would ordinarily enter the private sector in the form of contracts and will mean that services available to seniors, disabled and low-income residents will be reduced or no longer available.

The cuts have been presented and are under review and will be made available on the WyomingSense website, said Gordon. The public will be able to make comments.

This is especially important, he continued, because there is another 20% left to cut. The current budget cuts still leave a forecasted shortfall of over $600 million. Agencies have been told they must do more and the people of Wyoming need to be able to weigh in, he said.

Some agencies will not be cutting a full 10% due to “incredibly important” programs, Gordon said; this applies, for example, to the departments of health and corrections and the Wyoming Attorney General’s Office.

“That doesn’t mean they won’t have to make them in the future,” he said.

The next round of cuts will involve the assistance of the Wyoming Legislature, Gordon said. It will be up to those elected officials to decide which of the things that have been mandated in law previously are no longer possible to fund.

One of the measures being taken to cut this first 10% is furloughs, Gordon said. Roughly speaking, this will translate as one day per month for employees who earn above $65,000 per year, and agencies have been asked to make sure there are backups of coverage so that the services people expect can be delivered.

Speaking to the inevitable layoffs, Gordon commented, “I’m the first governor in quite a while who’s actually going to have to lay people off.” It’s not something he likes, he says, but that’s the state of affairs Wyoming finds itself in.

“I have no way to raise revenue. I have to make cuts because I have to balance the budget,” he said.

Gordon also spoke to the state’s plan to bid for land and minerals owned by Occidental Petroleum, preempting the question of why this is being pursued in a time of financial stress. He explained that the money that would be used to purchase this land would not otherwise go towards paying for programs or salaries or supporting towns and counties.

The funds are fully within Wyoming’s investment portfolio and the potential purchase has been reviewed for its benefit to that investment portfolio, Gordon said. Under the circumstances, it is felt that this opportunity will benefit the money that Wyoming people can count on to reduce their taxes.

“We’re not taking any crazy bets and we’re not going out on a limb,” Gordon said. He stated that the deal is about ensuring the best returns for Wyoming on the safest types of investment.