By Dustin Bleizeffer, WyoFile.com
(originally published November 30, 2012)
Gov. Matt Mead will ask lawmakers to approve “major fiscal policy” changes intended to level out the up-and-down nature of Wyoming’s mineral-based revenue cycle. The governor will also push for a fuel tax increase of about 10 cents per gallon to maintain highways.
Mead announced the measures Friday morning at a news conference marking the release of his supplemental budget proposal. When the Wyoming Legislature meets in January for its general session it will mull significant budget cuts to align state spending with declining revenue from weak natural gas pricing and a modest slowdown in coal production.
Regarding the fiscal policy changes, Mead said, “In a state that is heavily reliant on mineral prices, these things (revenue fluctuations) can happen, so I asked for a more smooth, stable trend-line that allows us to project out where we want to be and need to be.”
To help stabilize Wyoming’s budget Mead wants changes in state statute to allow lawmakers to divert one stream of revenue that normally goes to the Permanent Mineral Trust Fund to the Legislative Stabilization Reserve Account (LSRA), also known as the “rainy day” account. The statute change would also allow lawmakers to take money from federal coal lease bonus bids and put it into the rainy day account. For years, Wyoming’s portion of federal coal lease bonus revenue has been dedicated to school construction in Wyoming.
Shifting these two revenue streams to the LSRA would swell the account to an estimated $2.2 billion next year, and beyond $3 billion for the next fiscal biennium, according to Mead.
The third portion of Mead’s proposed fiscal policy change would require that the state conduct a more comprehensive revenue estimate for its investments and capital gains. Last year, there was an unexpected $30 million on the budget table that the governor’s office didn’t even consider because it wasn’t part of the state’s normal revenue forecast.
Regarding a fuel tax, the governor said he wants to force Wyoming lawmakers to come up with a long-term plan to pay for highway maintenance because putting off maintenance only creates more cost down the road. He said if the Legislature doesn’t approve of a fuel tax, he will ask that a portion of mineral severance taxes be dedicated toward transportation maintenance.
Gov. Mead also said the state discovered an unexpected health insurance premium overpayment of $16.9 million, which gave him confidence to recommend $11 million toward raises for state employees.
In all, the Wyoming Legislature has about $3.4 billion to manage when it meets in January. Mead will present his supplemental budget proposal to the Joint Appropriations Committee in December, then the Legislature’s general session begins January 8.
For more on Wyoming’s ongoing budget discussions, read these WyoFile features:
— “Fiscal Plateau: Lawmakers trim budget to match declining revenue,” by Gregory Nickerson, November 20, 2012
— “Cheyenne Confidential: How Wyo’s lawmakers spend your $3.4B,” by Geoffrey O’Gara, November 20, 2012
— “Lawmakers in the Classroom: The Battle for Wyoming’s Schools,” by Geoffrey O’Gara, November 27, 2012
— Also check back at WyoFile weekly for its ongoing Legislature 2013 special report.