Governor proposes conservative budget

Governor Mark Gordon’s proposed budget for the next biennium is a conservative one, recognizing that the pandemic-related “funding tsunami” has receded but the circumstances that led to program cuts three years ago still exist.

However, it also addresses immediate challenges faced by Wyomingites, such as expanding property tax relief to $20 million.

“It is not easy to have to reduce programs, especially those providing services for our most vulnerable populations. And yet that is what circumstances in 2020 compelled us to do to seniors, veterans and those with disabilities – including children,” he wrote in his budget message.

“Those cuts were not our first choice by any means. Some may remember the opposition to our closure of highway rest areas within a convenient distance to towns – a far less disruptive service to cut. Unfortunately, some of what we had to consider then is still present today.”

Gordon’s approach to the budget, he said, recognizes that the state must prepare for a future that could see declining revenues and continuing inflationary pressures.

“It focuses on needs and not wants, but addresses the pressing challenges of today – a continuously overreaching federal government; workforce shortages; inflation; an unacceptably high suicide rate; and property tax relief for the truly needy,” he said.

Immediate Challenges

Gordon’s budget, he said, bears in mind the end of the American Rescue Plan Act, which means replacing it with general funds. This accounts for almost $324 million, most of which is in the Department of Corrections and Department of Health.

“Wyoming has been fortunate to be the beneficiary of high natural gas prices and an influx of federal funds since the pandemic,” Gordon said. “However, now we must adapt to the absence of those federal dollars and the impact to our ongoing spending. It requires us to make difficult decisions about meaningful programs, and to determine how we are going to address our current challenges as well as the needs of future generations.” 

The proposed budget also recognizes the continued pressure of inflation, which peaked at ten percent but is beginning to abate slightly. According to Gordon, the Wyoming Cost of Living Index is at 4.6% for the second quarter of this year and housing inflation is up 6.1% from a year ago.

Last year, $8.3 million was distributed to nearly 9000 households through the property tax relief program. This budget proposes expanding the program for the full biennium by designating $20 million for the next two years.

To protect Wyoming’s interests, Gordon proposes ensuring the state can continue to defend its interests in court by increasing spending authority for the Federal Natural Resources Planning Account by $1 million.

“These funds showed their value this year when we were able to quickly deploy them when the Bureau of Land Management put forward an unacceptable preferred alternative for the Rock Springs Draft Resource Management Plan,” he wrote.

In the light of what he called “an onslaught of federal rulemaking”, especially by the Environmental Protection Agency, he also proposed “fortifying” the Department of Environmental Quality with staff and contracting resources to maintain primacy when possible, support industries navigating new rules and support efforts to write and implement changes to regulations to best reflect Wyoming’s position. This proposal of $3.4 million, he said, is needed for Wyoming “to control her own destiny”.

Gordon also proposed adding $695,000 to the Office of Consumer Advocate in the light of electric utilities proposing rate increases and new structures to produce and transmit powers. Wyoming’s export of 80% of the power it produces means policies in other states have an outsized influence on our communities, he wrote.

Finally, Gordon proposes adding $4.6 million to the Office of Homeland Security to defend critical infrastructure such as pipelines, fiber optic corridors, interstates and the nuclear Air Force base.

Housing Shortage

Gordon points to a lack of housing as a “binding constraint” for the growth of Wyoming’s economy and proposes two ways to address the shortage.

The first would be to address the fact that “Wyoming has over-regulated housing development”, which he said local cities are already taking action on and policy solutions are under development with the Regulatory Reform Task Force.

“However, deregulation alone will not fix this problem,” he wrote. “Because of our extremely low property taxes, cities, towns and counties do not have enough funding to build arterial infrastructure, like sewer, water, streets and other utilities to encourage new housing development.”

Gordon proposes $25 million in matching funds for the State Revolving Fund for clean and drinking water projects, which can be used to leverage federal dollars. He also suggests a $40 million investment in the Wyoming Business Council’s Business Ready Communities grant program.

Mental Health Crisis

“The crisis is real,” Gordon wrote, imploring that Wyoming stop kicking the can down the road in addressing the mental health issue.

To truly make an impact on the suicide rate, he said that investments must be made in a “culture of change” to normalize the conversation around seeking assistance.

In 2022, he wrote, the 988 suicide hotline received 5181 calls. However, only 2% required an emergency activation, while the rest were de-escalated over the phone.

Wyoming has a shortage of mental health professionals, Gordon said, offering a package of funding that includes funding for community mental health centers, an increase in funding for dedicated providers who serve youth and expansion of the 988 hotline’s capacities to add text and chat services.

Long Term View

Last year’s budget set aside nearly $1.5 billion in savings, mostly for the permanent funds, and Gordon proposes adding another $265 million to the Permanent Mineral Trust Fund this year, increasing the rainy-day fund to $1.6 billion and adding $265 million to the Common School Permanent Land Fund. He also leaves $48.9 million for legislators to consider for savings or investments.

Gordon would also like to allocate funding for changes affecting the energy industry and programs to support workforce development and economic diversification.

This includes $8.2 million for on-the-job training through the Workforce Development Training Fund and $5.3 million to continue to support payments for tuition, training costs and support services.

Gordon recommends $5.1 million to keep supporting rehabilitation training for people with disabilities and $1.7 million for WyRelocate, which targets and recruits specialized talent.

Gordon also proposes an extension of the Governor’s Energy Matching Fund program and support for approaches to use and store carbon dioxide, so that Wyoming’s coal mines can continue to produce and supply reliable, dispatchable power. 

“We continue to be challenged by a federal government whose executive policies are holding back our most profitable industries like oil and gas and coal that have done so much to fund our schools, our programs, and our abilities to meet the needs of Wyoming citizens,” Governor Gordon said. “In totality, this budget proposes living within our means, not just in this biennium, but in those to come. It keeps ongoing spending at a level we can sustain.”