CHEYENNE — Gov. Mark Gordon proposed a balanced general fund budget of nearly $2.3 billion for the 2023-24 biennium Monday that will be considered by the Wyoming Legislature during the 2022 budget session.
Recommendations for state agency funding compared to the previous budget stayed flat, but close to $453 million is proposed to be allocated to the Legislative Stabilization Reserve Account, better known as the “rainy-day fund.” This was made possible by the use of American Rescue Plan funds as a replacement for general fund dollars, and is intended to help prevent future distribution cuts.
“My goal is to ensure that we are prepared to endure future revenue challenges as they are forecast in the long term,” Gordon said.
Appropriating funds to the savings account and recommending a more “frugal” budget this biennium are actions taken in response to the historic drops in revenue the state has seen the past two years. The governor attributes this loss to regulations enacted by the Biden administration regarding fossil fuels and other state industries.
“I don’t think anyone in Wyoming is suffering under any misconception about this administration, which has a single-mindedness about trying to remove fossil fuels,” he said. “Those obviously are a major portion of our revenue streams.”
Gordon said this is also the reason extensive reductions were necessary in the previous budget proposed. When going into the 2022 budget session, he said he didn’t want to make further cuts to funding by deferring maintenance any longer or compromising education institutions.
The governor also expressed concerns related to cuts made last year. Gordon explained that many of the reductions have yet to go into effect or have only begun to impact constituents this year. The most significant cuts have not yet burdened private businesses and entities that provide Medicaid services for people with disabilities, but are set to go into place next year.
“Reductions in state spending are also masked by billions of dollars of federal aid that we’ve been able to use for special purposes,” he said. “Consequently, we cannot be absolutely clear about how or when the full impacts of these reductions will arrive.”
Another consideration made by the governor’s office when creating the supplemental budget approved earlier this year was inflation and its impacts. The state saw an inflation rate increase of 7.7% in the second quarter of this year from the previous quarter, which the Wyoming Economic Analysis Division reported was the highest jump seen since the 2008 recession.
“Rising costs for gas and electricity are going to mean it will cost more just to keep the lights on this winter,” Gordon said. “Our agencies will feel the impact and see it in the cost of providing services.”
The governor said this will impact many communities, businesses and industries across the state. In an effort to fight those repercussions, he proposed a market pay adjustment worth nearly $53 million for compensation of all state employees in executive branch agencies, higher educational institutions and the judicial branch.
Salaries are below even the market rate from 2017, according to the state Department of Administration and Information, and Gordon said this has resulted in a significant portion of the workforce having to take a second job. The adjustment would help mitigate those pressures, and make Wyoming a competitor in the employment market.
“This market adjustment proposal is the largest single exception request that I have proposed,” Gordon said. “It is unquestionably one of the largest issues, as providing services for citizens is effectively what is at stake.”
Outside of the general fund, more than $1.8 billion from the School Foundation Program was recommended for education in the upcoming budget, and nearly $251 million was allocated for the School Capital Construction Account. Gordon said education was another important investment and emphasis, which requires a strong school system.
The governor’s 2023-24 biennium budget proposal will be reviewed by the Wyoming Legislature’s Joint Appropriations Committee during a series of hearings between now and the Feb. 14 start of the budget session. Those hearings are scheduled to begin with a presentation by Gordon to the committee at 8 a.m. Dec. 1 in Room E301 of the state Capitol.
The next spending recommendation to come from the governor’s office will likely be in December, when appropriation proposals for the American Rescue Plan funds will be finalized.