Wyoming state budget (2008-2009)

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State Information


Wyoming was not facing a budget deficit for fiscal year 2009 or 2010.[1] But with energy revenue declining in the state, Gov. Dave Freudenthal said that hard decisions would have to be made for the FY 2010 budget. The governor had already asked that state agencies prepare for possible funding cuts from 5 to 10 percent.[2] "Hard decisions that have to do with saying ‘no’ in a way that we’ve never had to say it before. In prior years, we would say ‘no, maybe next year.’ This year we may be compelled to say, ‘no, and maybe not for a long time,’” said Gov. Freudenthal. But despite a disappointing revenue forecast the governor urged for investments to continue (for example, continued funding for Abandoned Mine Lands that was geared towards research of clean coal technology, coal gasification and questions surrounding the air quality and ozone challenges in western Wyoming).[3]

Impact of budget woes

See also: State budget issues, 2009-2010
  • In February 2009 Wyoming's unemployment rate of 3.9 percent remained the lowest in the nation despite a loss of 800 employees from Wyoming oil and gas companies.[4]
  • In January 2009 more than 5,700 Wyoming workers filed new jobless claims in all employment sectors, a 98 percent increase from January 2008. New claims filed in the natural resources and mining sectors increased 265 percent compared to January 2009. The retail trade, leisure and hospitality, and financial activities were also experiencing increases in jobless claims.[2]
  • In anticipation of falling state revenue, Gov. Freudenthal warned state agencies to prepare for possible funding cuts from 5 to 10 percent in the fiscal year that began in July.[2]

Budget background

See also: Wyoming state budget

Wyoming operates on a biennium budget. The biennium includes a 24-month period from July 1 of odd-numbered years to June 30 of odd-numbered years, such as the 2007-09 biennium, which ran from July 1, 2007 to June 30, 2009 All state agencies present their requests and past revenue and expenditure data by September or October for the governor's consideration. The Consensus Revenue Estimating Group meets in October and develops revenue forecasts for the upcoming biennium. Following this, the governor compiles a recommended budget that must be presented to the legislature by December 1 of each year. Both the House and the Senate host a series of hearings to work through the budget. The entire budget working process takes 4 or 5 weeks and is completed at least one week before the budget session begins. Once both houses agree on the final budget bill, the bill is passed into law.[5]

Budget figures

The following table provides a history of Wyoming's expenditures and gross domestic product (GDP).

Fiscal year Expenditures (billions) GDP (billions)
2000 $3.7[6] $17.3[6]
2001 $4.0[6] $18.2[6]
2002 $4.3[6] $19.6[6]
2003 $4.7[6] $21.7[6]
2004 $5.1[6] $23.4[6]
2005 $5.6[6] $26.6[6]
2006 $6.0[6] $29.9[6]
2007 $6.4[6] $31.5[6]
2008 $6.8[6] $33.2[6]
2009 $7.2*[6] $35.0*[6]
  • NOTE: The figures for FY 2009 had not been finalized at the time this data was compiled.

Ideas about why the crisis occurred

  • The energy industry had kept Wyoming financially sound; however, s the sagging industrial demand for natural gas was pulling the state down into the recession, according to government and energy industry officials. In 2008 natural gas averaged $6.56 per thousand cubic feet compared to the price of $2.75 in early 2009. According to the state's Economic Analysis Division, each one-dollar decline in gas prices cost the state roughly $270 million in lost tax revenue.[7]
  • Marion Loomis, executive director of the Wyoming Mining Association, said demand for bentonite, which is used in the manufacture of steel, would decline. Coal for steel plants and aluminum plants would most likely also decline. Loomis said the state hadn't seen much decline in the demand for soda ash, which is used in the manufacture of glass, of which the automobile industry is a large consumer.[2]
  • According to the state’s Consensus Revenue Estimating Group, the February 2009 deposit to the general fund was $89,831,789, putting year-to-date receipts at $606,344,061. The general fund total exceeded forecasts by 7.3 percent. In January 2009 the surplus was 5.8 percent.[8]

Proposed actions

Governor Dave Freudenthal

Wyoming may not have had a current budget gap to worry about, but in light of declining energy revenue the governor requested that all state agencies prepare for 5 to 10 percent budget cuts.[7][2] At the request of state lawmakers and in light of revenue numbers Gov. Freudenthal revised his recommended budget to reflect the changes in the state economy. Freudenthal’s January draft outlined an estimated $216 million reduction in general fund appropriations, and left an unappropriated general fund balance of approximately $32.6 million. His original December budget recommendations included general fund appropriations of $440.27 million and left an unappropriated balance of $67.38 million. In light of the revisions the following items were no longer recommended: $10.3 million for adjusting state employee salaries to market levels, $10 million to the Wyoming Wildlife and Natural Resources Trust, $67 million for local governments, $20 million for University of Wyoming endowments and $47 million for additional school construction. In regards to the University funds the governor noted that his recommendations would allow the university to access $10 million in existing but unused matching funds.[9]

No property tax relief

In an effort to provide residents with property tax relief the governor urged the funding the Homestead Exemption bill. Sen. Phil Nicholas said, "We look at the declining revenues, and in light of the fact that we're going to be looking at cuts in the budgets, we're more interested in saving jobs." Rep. Rosie Berger said that even though she supported the tax relief measure, "It just doesn't make sense over the last few weeks as we've been reviewing our budget and looking at our (revenue) estimates that we could offer that, and yet continue offering other services to the people of Wyoming."[10] Both the governor and House Speaker Colin Simpson had made property tax relief a priority for the legislative session. The governor said, "I can understand why they did what they did, and I don't intend to criticize them for it. I'd rather our revenue picture was different. I think it's just a harbinger of things to come."[10]

Economic stimulus package

Wyoming was expected to receive approximately $498 million from the $787 billion dollar economic stimulus.[11] All told, the federal stimulus plan would create or save 8,000 jobs in Wyoming, based on White House estimates.[12]

According to preliminary reports, Wyoming was expected to receive:

  • $26.2 million in Title I funds[13]
  • $26.92 million in IDEA funds from the U.S. Department of Education[13]
  • $215 million for capital infrastructure and environmental protection[11]
  • $210 million for diesel emissions reduction[11]
  • $59 million for Federal Medical Assistance[11]
  • $14.3 million for Unemployment Insurance Modernization[11]

Budget transparency

As of 2009, Wyoming had no statewide, official spending database online, although legislation that passed in 2009 mandated that a public finance site be operational by no later than January 1, 2010.[14]

Legislation

  • Wyoming House Bill 144 (2009)[14]

Government tools

The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:

Criteria for evaluating spending databases
State database Searchability Grants Contracts Line item expenditures Dept./agency budgets Public employee salary
None n/a n/a n/a n/a n/a n/a

Economic stimulus transparency

  • The American Recovery and Reinvestment Plan of 2009 designated $787 billion to be spent throughout the nation. Of that $787 billion stimulus package, it was estimated that 69%, or over $541 billion, would be administered by state governments.[15]
  • Wyoming was expected to receive an estimated $400,407,162.[16]

Error in ARRP

On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that did not exist. According to Recovery.gov, the plan showed its funds would go to 884 Congressional Districts, though there are only 435.[17][18]

According to the ARRP website, the stimulus package sent almost $1.5 million to five congressional districts in Wyoming and created 6.3 jobs. An additional $471 million was sent to two other districts in the state. However, Wyoming has only one district, District 00, and that district received just under $30 million, which was $410 million less than District 1, a non-existent district. In total, $442,318,511 went to 6 fictional districts to "create/save" 785.3 jobs.[19]

Support for creation of the database

House Bill 144, which required that a site be operational by January 1, 2010, was supported by the Wyoming Taxpayers Association.[14][20]

Public employee salary information

See also: Wyoming state government salary

See also

External links

Additional reading

References

  1. Center on Budget and Policy Priorities, "State budget troubles worsen," March 13,2009
  2. 2.0 2.1 2.2 2.3 2.4 Associated Press, "Wyoming reports nation's lowest jobless rate," March 11,2009
  3. Gov. Freudenthal, "Wyoming must continue to invest and prioritize, Governor says," accessed April 1,2009
  4. Associated Press, "Wyoming loses 800 energy jobs in 1 month," April 1,2009
  5. State of Wyoming, "Explanation of Wyoming's budget process," accessed April 1,2009
  6. 6.00 6.01 6.02 6.03 6.04 6.05 6.06 6.07 6.08 6.09 6.10 6.11 6.12 6.13 6.14 6.15 6.16 6.17 6.18 6.19 US Government Spending, "Wyoming State and Local spending," accessed March 31,2009
  7. 7.0 7.1 Associated Press, "Falling gas prices hit Wyoming," March 28, 2009
  8. Wyoming Business Report, "CREG Report: Surplus inches higher," March 20,2009
  9. Gov. Freudenthal, "Governor sharply reduces supplemental budget recommendations," accessed April 1,2009
  10. 10.0 10.1 Associated Press, "Wyoming budget negotiators ax property tax relief," March 3,2009
  11. 11.0 11.1 11.2 11.3 11.4 Star Valley Independent, "Governor’s office details Wyoming’s share of economic stimulus," March 26,2009
  12. American Recovery and Reinvestment Act, "Estimated job effect," accessed April 1,2009
  13. 13.0 13.1 Casper Star-Tribune, "Education stimulus money arrives," March 31,2009
  14. 14.0 14.1 14.2 Wyoming House Bill 144, "Transparency in Government"
  15. National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
  16. Wall Street Journal, "Stimulus Spending by State," March 12,2009
  17. $6.4 Billion Stimulus goes to Phantom Districts, Watchdog.org, November 17, 2009
  18. Stimulus Creates Jobs in Non-Existent Congressional Districts, Watchdog.org, November 16, 2009
  19. Wyoming, Watchdog.org, November 17, 2009
  20. Wyoming Taxpayers Association, "Legislative Summary," January 30, 2009