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Governor suggests stark budget cuts

 

November 19, 2020



Another half billion dollars will be chopped from the state’s budget if Governor Mark Gordon’s supplemental budget is approved by the Legislature in January.

The proposal, released on Monday, reflects an average cut of 15% to state agencies. Speaking during a press conference, Gordon commented that he was handed a $3.3 billion budget when he took office; if the supplemental budget is approved, it will total $2.4 billion, “a pretty substantial reduction.”

“It is a proposal that meets my statutory requirement to present a balanced budget and my commitment to the Wyoming people to live within our means,” the governor said in his letter to the Legislature introducing the proposal.

“There are choices that have had to be made. There are many more, not the least of which is to charge the Legislature with reducing the obligations it requires of government,” the letter says, referring to Gordon’s previous statements that the final round of cuts will need to be made by the Legislature itself, by deciding which services Wyoming should and should not be required to provide.

The budget includes around $515 million in reductions and the elimination of 380 state positions. This includes a proposed cut of $135 million to the Department of Health, the largest general fund-supported agency in Wyoming.

“It is a harsh reality that at this point every cut will hurt,” Governor Gordon said.

The University of Wyoming and community colleges have a general fund budget of $700 million, almost a quarter of the total. The governor has proposed a 15% reduction to higher education, including the elimination of degree programs in agriculture, psychology, journalism, accounting and engineering.

Some agencies, including the Governor’s Office, will see cuts of almost 20% if the budget is approved.

With all those cuts made, the deficit would be reduced to $300 million from what was $1.5 billion in May. The remaining deficit comes from K-12 education spending.

“If it’s left unchecked, without doing some adjustments in education spending, that shortfall could be $600 million in two years,” Gordon said during his press conference.

This can be covered for now through dollars from the Rainy Day Fund, which currently sits at around $1.4 billion. However, Gordon warned that circumstances mean school funding needs to be evaluated.

Gordon’s proposed budget also attempts to streamline and simplify the state’s fiscal apparatus, eliminating narrow and specific accounts so that it is no longer a “commotion of coffee cans.”

“This budget really does try to move to a one-checkbook-and-one-savings-account approach. That’s the sort of thing that I think people in Wyoming will find a lot more transparent, a lot more accessible, and it helps with the budget process particularly in lean times,” Gordon said.

In the budget proposal, Gordon detailed the circumstances that have led to such drastic cuts. There have been “ominous indications” of hard times for a while, he said.

A year ago, he said, he asked agencies to outline their priorities and describe how each one proposed to approach a reduction in expenditures.

“At the time, I merely wanted to suggest that even if the state was facing leaner times, we still had time to plan and adapt, but that we had better get on with it,” Gordon says.

The 2021-2022 budget thus tried to reposition the state for leaner times.

“In March, the wheels came off,” Gordon says, referring to the oil price war instigated by Saudi Arabia.

Coal and natural gas have also continued to decline, he says, then along came the economic shock of COVID-19.

“2020 has been an absolutely devastating year and it has been a year which brought the budgetary issues Wyoming faces into sharp relief,” Gordon’s letter said. In urging the Legislature to pass the supplementary budget, he said, “Where we once could take some time to consider our course, we now face a stark reality that, if we do nothing, our reserves will be depleted within two years.”

 
 

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