Mead; More budget cuts needed due to falling natural gas prices

Wyoming Gov. Matt Mead announced today he will ask state agencies to double budget cuts for fiscal year 2014 — from the recommended 4 percent to 8 percent — due to the continuing low price of natural gas. As one of the largest natural gas suppliers in the nation, Wyoming’s economy rises and falls on the price of natural gas.

“This year I submitted a budget that held ongoing spending flat, but looking ahead we need to be ready to reduce our spending in line with anticipated reductions in revenue,” Mead said in a prepared statement Monday afternoon. “If we see a turnaround and revenue increases, we may not have to make deep cuts going forward, but this advance planning allows for a more surgical approach if a reduction in spending is needed.”

The 8 percent cut means state agencies, collectively, will have to trim $74.5 million dollars. Mead ordered state agencies to immediately freeze all hiring.

Wyoming analysts, in January, predicted that natural gas would average $3.25 per thousand cubic feet (mcf) in 2012. Natural gas is now at a 10 year low, below $2 per mcf. If the current price holds through the year, it will be a $125 million loss of revenue to the general fund, according to the governor’s office.

“My approach is to try to stay in front of potential pitfalls and be proactive,” Mead said. “What my office and other state agencies will do over the coming months is come up with a plan to ensure we are prepared if revenue decreases. This is how any business owner would act and it is in the best interest of the people of Wyoming.”

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Published on April 23, 2012

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