The 64th Wyoming Legislature opens today in Cheyenne confronted by a revenue crunch that already has forced steep cuts in spending and the prospect for more ahead.
Those spending reductions have forced a re-evaluation of the services delivered by state institutions, including the public schools, the University of Wyoming, the Department of Corrections, and virtually every other agency.
How well lawmakers can address the state’s major concerns will depend on how well they can stay focused on them.
The task could be made more daunting by untested lawmakers and potential party factionalism.
For starters, there’s an estimated $400 million shortfall in public schools funding. Though an unwise Legislature could put off dealing with it for one more year, when the biennium runs out the deficit begins.
Then there’s a prison in dire need of repair and an involuntary hospitalization program that has seen steadily climbing costs, drawing down the already tightened budget of the embattled Department of Health.
Finally, there’s the underlying question that has been simmering during the slump in mineral revenues of the last few years: will this be the year the Legislature considers imposing new taxes to diversify the state’s revenue and protect it from the booms and busts of the energy industry?
Legislators are searching for creative solutions for all these problems. For education, lawmakers are considering legislation that could reverberate through the entire state budget.
Repairing the prison, or building a new one, could be paired with a sweeping criminal justice reform bill.
Curbing the cost of Title 25, the involuntary hospitalization program for people found by courts to need mental health care, could invoke a deeper look at Wyoming’s safety net for those struggling with addiction or mental health issues.
The Legislature has 24 members who are new to lawmaking and a significant number of Republicans who want to pursue a very conservative path on social issues. Already, bills with the potential to deeply divide the public and use up session time have been filed or are being drafted.They don’t have much to do with the intricacies of revenue streams nor the state healthcare system.
All of this will unfold in the midst of a comprehensive transfer of power at the national level. President-Elect Donald Trump takes power on Jan. 20, and a Republican dominated Congress has already begun to shake things up on Capitol Hill. In its crosshairs for repeal is the Affordable Care Act. The national health care law, also known as Obamacare, spurred protracted battles in past legislative sessions over whether Wyoming would expand Medicaid. Given the uncertainty at the federal level, it’s unlikely that question will come up this year.
Education funding crisis could drive a discussion of revenue
By most lawmakers accounts, the education funding crisis is the big question for this legislative session. Dealing with the looming $400 million deficit will generate discussions not directly linked to education itself, including about revenue strategies that move the state beyond the boom and bust of energy markets. A WyoFile story this week features key lawmakers discussing the different approaches to that crisis.
Sen. Henry Coe (R, SD-18, Cody), the chair of the Senate Education Committee, drew on animal metaphors to describe how the education funding deficit will drive the Legislature.
“Everybody’s got their eye on the rabbit here, and the rabbit happens to be K through 12 funding, because that’s the 800-pound gorilla in the room,” he said.
The Legislature needs to take the education crisis as a sign that it’s time to “open up all the coffee cans, and open up the statute books, and take a good hard look,” House Minority Floor Leader Cathy Connolly (D, HD-13, Laramie) said.
Despite the state’s fiscal struggles, many Republican lawmakers apparently will not consider raising new taxes this session. A “Taxpayer’s Protection Pledge,” circulated by the Wyoming Liberty Group during the 2016 election campaign was signed by a number of candidates who won election. They promised to avoid increasing taxes no matter the need to diversify revenue sources.
Wyoming’s mineral riches have allowed residents to avoid much of the property and sales taxes imposed in other states. Lawmakers have yet to substantively take on the problem, despite the inescapable damage of the current energy bust.
Thus far, there are few signs of bills that would change that trend. At a Joint Revenue Interim Committee Meeting in September, lawmakers killed a bill that would have raised taxes on cigarettes to match inflation and a bill that would have increased a tax on wind power. They did vote to advance a bill that would impose the state sales tax on online vendor sales in Wyoming. The committee also advanced a bill that would remove sales tax exemptions from certain industries, after first cutting the number of industries that would be considered from nine to four.
Sen. Cale Case (R, SD-25, Lander) has said the wind power tax bill will come before the Legislature, albeit without committee sponsorship. Rep. Connolly told WyoFile she is working on bills to bring both cigarette and alcohol taxes closer to national averages.
Read Sen. Cale Case’s argument for a higher tax on wind power.
The wind power tax increase and higher taxes on alcohol and cigarettes would not generate enough revenue to meet the state’s budgetary requirements. The question remains whether the revenue committees — headed by Rep. Mike Madden (R, HD-40, Buffalo) and Sen. Ray Peterson (R, SD-19, Cowley) — will examine other tax options.
The alternative, of course, is more reductions across agency budgets. This summer, Gov. Matt Mead cut agency budgets by $249 million. In combination with spending reductions imposed during the Legislature’s 2016 budget session, the governor’s cuts brought the total budget reduction to nearly $317 million, compared to the original 2017-18 biennium budget.
Over the summer, the Department of Health received a lion’s share of the cuts mandated by the governor. The department saw its budget cut by just over 9 percent, as $90 million in state reductions led to the loss of an estimated $40.9 million in matching federal funds.
In December, Director Tom Forslund told the Joint Appropriations Committee it has been difficult to evaluate the impact of the cuts because the department has little control over providers. He warned the committee, as did Gov. Mead, that Wyoming citizens have not yet felt the full effects of the last round of cuts.
“We in Wyoming have a pretty fragile healthcare system,” Forslund told the committee. If a healthcare provider in sparsely populated Wyoming closes or reduces services, those in need could have to travel much further.
Forslund’s department still will struggle even if the Legislature does not ask for additional cuts. The Title 25 program, for example, deals with involuntary hospitalizations. It has seen a significant rise in the number of cases, pushing up program costs to more than $18 million in the last two-year budget period. The program was budgeted at $4 million. When costs overran that amount by more than four times, the Department of Health was forced to take money from other programs. Although Forslund said he had twice requested additional funding to pay for Title 25, he did not receive it.
This year he is asking again for $21 million in contingency funding. The governor has echoed his request. Forslund has said he cannot absorb the cost overruns of Title 25 in 2017, given his already reduced budget.
The Department of Corrections also took a significant cut in June, of nearly $18 million, or 6 percent of its budget. State prisons face staff shortages, and are at 94 percent of their bed capacity, director Bob Lampert told the appropriations committee in December.
He said the department has achieved one of the lowest rates of recidivism in the nation through the implementation of the best-known correctional practices. Cuts could harm that, he told the committee, by reducing programs that provide mental health and substance abuse treatment to prisoners. Since the beginning of budget cuts, the recidivism rate has slid from 23 percent to 27 percent, although that could be coincidence, Lampert said.
One immediate problem the Legislature will have to confront is the physical condition of the Wyoming State Penitentiary at Rawlins, the state’s only maximum-security prison. The penitentiary, sited on unstable soils has been deteriorating for years as walls and floors shift.
Prison repairs, Lampert told the committee, are not “a can that can be kicked down the road.”
The repairs have been estimated at between $87 million and $120 million. A report by engineering firm Martin & Martin estimates the cost of building a new prison at more than $257 million. Gov. Mead has suggested the state, which has a AAA credit rating that it has not been using, consider bonding for the project.
But the Legislature has a long view it can take on this problem as well. Rep. Connolly has expressed disappointment that a legislative task force assembled to review the options for repairing or replacing the penitentiary at Rawlins did not also consider investing in alternatives to incarceration, as it had been asked to do. The Task Force on State Penal Facilities ran out of time, task force chairman Rep. Kermit Brown (R, HD-14, Laramie), testified to the Joint Appropriations Committee. Brown served as speaker of the house in 2015-’16, and has now retired from the Legislature.
A chance to examine alternatives to incarceration does exist, in the form of a sweeping criminal justice reform bill that will be introduced in the House by the Judiciary Committee. According to proponents, the bill could save the state between $17 million and $20 million annually by putting fewer people in prison, for an initial investment of $2.8 million a year.
The bill seems to be garnering support across the political spectrum. Both libertarian and Democratic lawmakers tend to support criminal justice reform, according to Linda Burt, a longtime lobbyist and former director of the Wyoming ACLU.
In the past, she said, criminal justice reform has run into legislative roadblocks, but in this case she thinks things could be different.
“Hopefully at this point in time … they will really look seriously at that reform because that’s one of the ways that we’re really going to be able to cut budgets,” Burt said.
Cultural flash points
Whether budget problems will keep the focus of this Legislature could be the biggest question mark over the general session. Legislators already have proposed non-budget legislation that can be expected to generate considerable controversy.
The Select Federal Natural Resource Management Committee is sponsoring a resolution to amend the Wyoming Constitution calling for no loss of acreage or public access in the management of lands potentially granted by the federal government to the state. Critics have said it’s a bid to encourage a transfer of federal public lands to Wyoming, which they fear will lead to selling the property to private interests or developing it heavily. Encouraging the transfer of public lands to states is a part of the national Republican Party’s 2016 platform.
A subcommittee hearing over the amendment in December raised the public’s ire over process. Many opponents and public lands advocates felt their input was being blocked.
Identity politics will be raised by Rep. Roy Edwards (R, HD-53, Gillette), who has said he is working on a “bathroom privacy” bill. Critics say such legislation would be discriminatory and has the potential to bring further economic harm to the state. Similar legislation damaged North Carolina’s economy last year.
Sarah Burlingame with Wyoming Equality said legislators around the country who wish to enact exclusionary laws are seizing on the momentum of the Trump election and its divisive rhetoric.
Meanwhile a different resolution for a constitutional amendment is being sponsored by Sen. Larry Hicks (R, SD-11, Baggs) and other Republican legislators. This resolution proposes amending the Wyoming Constitution to prohibit discrimination against and also “ban preferential treatment to” people based on their race, sex, color, ethnicity or national origin. The prohibitions would apply to public employment, public education or public contracting.
“It looks to me like it could be a backdoor to lessening affirmative action rights,” Burt said. She compared it to so-called “religious freedom” bills in other states that were designed to be exclusionary.
“It’s sort of covertly mean-spirited for a lot of reasons,” she said.
These constitutional resolutions, and the bathroom bill, may be just the first round of controversial national issues that will come before the Legislature.
Native American concerns
Jason Baldes, director of the Wind River Native Advocacy Center, plans to bring a group of people from the Northern Arapaho and Eastern Shoshone tribes to the Legislature this week. It’s the third year the Center will bring people to lobby.
Last year they advocated for Medicaid expansion and hate crimes legislation, neither of which passed. This year, Baldes said he is advocating for passage of a Native American education bill, which would expose all schoolchildren in Wyoming to a curriculum that includes the story of the state’s indigenous tribes.
The bill is important, he said, to “decreasing racial disparities and increasing understanding.”
His group will also advocate for the tribal liaison program in the Governor’s Office. There is a vacancy in the program, now that former-liaison Leslie Shakespeare has joined the Eastern Shoshone Business Council. Baldes worries the Legislature could choose not to fill it.
The tribes will also advocate against the constitutional amendment concerned with federal lands, Baldes said. In addition to concerns about access, which Baldes said are shared with “sportsmen, outdoorsmen, fishermen and recreationalists,” much of the federal land is being held in trust for the tribes, he said.
Federal lands should stay in the hands of the federal government, he said, but if it’s going to be transferred at all, he sees a different recipient.
“They shouldn’t go back to the state, they should go back to the first rightful owners — and that is the Shoshone and Arapaho people,” he said.
As the minority in what he called “a very right-wing, white state,” Baldes said it’s important for the tribes to send a message to the Legislature, especially with new lawmakers: “We want them to know that we’re here and they represent us as well.”
This report was amended Jan. 10 to clarify aspects of the effort to increase revenues with higher taxes on wind power generation, alcohol, and cigarettes — Ed.