State budget should be based on cash on handGuest column by Eric Barlow
— February 7, 2014
The Wyoming Legislature is convening to consider the State’s budget for the next two years. The Joint Appropriations Committee has completed their review of Governor Mead’s budget proposal and made adjustments they determined prudent. This process stands in stark contrast to the fiscal contortions played out in Washington recently, and the likelihood that more will ensue.
Now aside from what is likely our shared dismay with the genesis and impacts of the federal situation, are there lessons for Wyoming in the way Washington has handled their responsibilities? I believe there are and offer three proposals for your consideration.
First, Wyoming should only spend what it actually has. Presently our budgeting scheme is based on expected revenue — what we hope to collect before the bills come due. That may be the way I live, and so may other working folks, and it is certainly better than borrowing like the federal government is to meet its current obligations. However, Wyoming has the opportunity to budget based on monies already in the bank. There is currently one year’s worth of cash on hand. Using these monies in a “forward funding” manner will allow Wyoming to better control its budget in several ways.
First, we will only spend what there is. Period. Secondly, our reliance on revenue forecasts based largely on energy prices and production levels will be reduced. And finally, budget adjustments can be more clearly driven by policy priorities, not fiscal limitations or abundances, whether anticipated or not. To accomplish this we simply accumulate revenue on a calendar year basis and spend it the next fiscal year. As there is a legislative session in each intervening timeframe, this allows necessary adjustments to be made. Most importantly, our fiduciary responsibilities are then based on our bank balance, not the hope of collection.
Next, Wyoming needs to have a meaningful discussion about our relationship to federal programs and the dollars associated with them. They all have “strings” and we need robust means of ensuring their acceptance and utilization is consistent with Wyoming priorities, not someone else’s. For example, the federal government shutdown this past year resulted in several hundred furloughed “state” employees. This begs a fundamental question: if the work is important to us, should we be paying for it ourselves? This review is not a simple task as Wyoming receives a plethora of federal program monies, many which may be quite beneficial. However, a careful examination of the programs and funds associated with them is prudent and will help ensure our acceptance is informed and augments our priorities.
Finally, we need a general Wyoming emergency fund. In recent years, we have had several natural events which caused significant challenges and required considerable resources to address. Included were mudslides, flooding and wildfires, all of which necessitated the Governor scour through agencies to find funding to address real and immediate needs. This disrupts agencies, programs and impacts the services Wyoming citizens receive. This can be rectified with the establishment of a fund for use by the Governor to address significant public needs which cannot be addressed within the operational budget of the responsible agency. Rebuilding roads and bridges, or protecting lives and property are too crucial a government function to be based on the success of a scavenger hunt. Let’s set a block of monies aside and establish guidelines for their use, all the while hopeful we will not need it.
In conclusion, government does not “earn” what it receives, but rather it collects from the earnings of others for its purposes. Therefore, it should be held to the highest of standards. Wyoming is uniquely positioned to raise our own bar by spending only what we have on hand, scrutinizing our programmatic and fiscal relationship to the federal government and establishing an emergency fund. Each of these ideas can further solidify a more fiscally responsible and responsive Wyoming which is what we should expect from all levels of government. Let’s do Wyoming’s part.
— Eric Barlow (a Republican) is the House District 3 representative, covering areas of Campbell and Converse counties. He is a rancher and veterinarian who lives in Gillette.
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