Wyoming legislature wraps budget, looks to interim and special session

After 19 days of non-stop debate, the Wyoming’s 2014 legislative session is over.

The legislature adjourned last Thursday after meeting for just shy of four weeks. During that time, legislators considered some 300 bills for introduction, and passed 132 into law. They also passed a budget allowing for $3.5 billion in General Fund spending, plus $1.67 billion for K-12 schools, and $1.56 billion in federal funds.

“It’s been a three month process,” said Sen. Eli Bebout (R-Riverton). “A lot of us didn’t get what we wanted but there was more good than bad. Overall, I feel decent.”

As the session came to a close, lawmakers laid out plans for the interim. The most significant topic of discussion will be the role of the Superintendent of Public Instruction, which lawmakers purposely set aside to better deal with budget matters during the short session.

However, the matter hardly went dormant. It’s been more than a month since the state Supreme Court struck down Senate File 104 and ruled that the legislature must restore general oversight of Wyoming’s schools to the office of the Superintendent of Public Instruction, which is currently held by Cindy Hill.

As the state awaited an order from Laramie County District Court on how to proceed, Hill took matters into her own hands on the last day of the session by announcing she would show up at the Department of Education on the morning of March 10 to return to her former job.

Hill did as she promised, walking up the stairs to the department surrounded by a gaggle of news reporters and cameramen. However, she was turned back when WDE Director Richard Crandall explained that the superintendent will not be in charge of the department until the District Court issues further orders.  In the meantime, some lawmakers say the Department of Education is running smoothly.

“For the first time in a long, long time the department of education is operating very well, said House Speaker Rep. Tom Lubnau (R-Gillette). The legislature is getting the info it needs and the school districts are getting the info they need, and the politics are taken out of education. That’s the part of the story that hasn’t been told.”

The Supreme Court has ruled. But no one is entirely sure what the ruling will mean for the department. Legislators say they are prepared to obey the District Court order and return for a special session, if needed.

“We are all informed on the issues, and we will be prepared to go into a special session or do whatever is necessary to deal with disentangling Senate File 104 based on the direction we are given from the district court,” said Rep. Rosie Berger (R-Big Horn).

Budget numbers

The $3.5 billion in General Fund spending for the next biennium is nearly flat compared to the budget for 2013-2014. Yet by prioritizing spending and rolling forward cuts made previously, lawmakers gave raises to state employees and added benefits for those with disabilities.

“You always wish that you had more money to give good people higher raises,” said Lubnau. “But I thought that we balanced the income picture of the state with the future interests of the public.”

At the same time, lawmakers will begin the next biennium with $57 million more than the 2012 balance of the Legislative Stabilization Reserve Account, also known as the “rainy day fund.” Permanent savings will also continue to grow. During 2015-2016, Wyoming is projected to sweep some $744 million in severance taxes into the Permanent Wyoming Mineral Trust Fund.

“You look at government from 2000 there was a steep incline and we’ve really leveled it off, said Sen. Eli Bebout, the co-chair of the Joint Appropriations Committee..  “The new norm is to be conservative in our spending and assess the needs in different areas. We came up with another $20 million for the Developmental Disability waiver list. We came up with money for the mandatory ACA [Medicaid] expansion, and yet we are still going to try to maintain relatively flat in terms of government growth and employees.”

Highlights of the budget

The budget bill contained a number of large transfers from the General Fund to other accounts:

• $60 million to the School Foundation Program Reserve Account (SFPRA).
  • Another $40 million from the Strategic Projects and Investments Account will go to the SFPRA.
• $38.6 million to Water Development Account III, restoring funds previously taken from that account.
• $37.5 million for restoration of the State Capitol and the Herschler Building.
• $5 million to the fish hatcheries account with the Permanent Land Fund.
• $3 million to Water Development Account I.

The Legislature passed a number of bills containing significant appropriations:

• $6.5 million for public employee pension plan contributions (HB 46).
• $18.5 million for operating the legislature (SF 11).
• $24.4 million for Business Ready Community Account. (Cody Labs bill: Read this Cody Enterprise article for more.)
• $15 million for grizzly bear management and paying insurance costs of Game and Fish Employees out of the General Fund, rather than agency-generated funds.

Unlike most agencies, the Game & Fish gets much of its funding from non-General Fund sources, namely hunting and fishing license fees. However, revenue from licenses has not kept up with rising costs.  While some hailed the Game & Fish appropriation from the General Fund as a solution to the department’s funding shortfalls, others thought it would erode the agency’s independence.

“It is a bad choice from a public policy standpoint that the Legislature will be more involved,” said Bebout. “[The Game & Fish will] get the money short term, but you’ll get the Legislature wanting to meddle.”

The Gillette Madison water pipeline project will get $25.8 million, drawn roughly equally from Abandoned Mine Lands funds and the Strategic Projects and Investments Account.

Cities and towns will receive $175 million in state aid distributed according to a formula that benefits revenue-challenged counties.

The Wyoming Value Added Energy and Industrial Plan provides $17.25 million for projects to expand the state’s economy. Of that amount, $15 million will go to an “integrated test center” to remove carbon dioxide from coal-fired power plant.

“For energy to continue to be our number one provider in revenue, we need to make sure we are doing what we need to do to remain leaders,” said Gov. Matt Mead (R) in his closing remarks to the Senate. “The integrated test center says to the rest of the country that coal is part of our today, tomorrow and our future and rightly should be so.”

Another $1 million in the value-added plan will go toward developing initiatives in the state energy strategy, while $850,000 will go for developing trade with foreign markets, with a focus on deep-water ports for coal exports.

Smaller amounts will go to the promotion of liquid natural gas exports, natural gas to liquids processing, electronics manufacturing, a core sample repository at the university, and planning for an energy mega-campus resembling the Heartland petrochemical processing zone near Edmonton, Alberta. During the session legislators took a trip to Canada to learn about the project.

“This is only a conceptual idea right now,” Rep. Kermit Brown (R-Laramie) said in a press release. “But if Wyoming is going to get beyond being seen as a colony only mined for it’s resources, we have to find ways to add value to our production chain.”

Wyoming’s K-12 schools will receive $1.6 billion in operating funds, and $411 million for construction and major maintenance.

Several legislators commented that Wyoming’s seven community colleges did very well in this session. They received $46 million for capital construction and $14.5 million in enrollment growth funding, in addition to $3.3 million for salary raises for 2015 only.

The University of Wyoming received $28.5 million in one-time appropriations, plus $12.5 million for salaries equal to a 2.35 percent raise in both 2015 and 2016. However, mandated increases in employee contributions to the state retirement fund will cut the effect of those raises back to about 2 percent each year. Click here to read more about the university’s appropriations from this session.

State employees will also receive 2.35 percent salary raises in 2015, which will compound to 2.6 percent in 2016. The funds for executive branch raises total $23.7 million, which includes $2 million for merit pay.

The K-12 system will receive an External Cost Adjustment of $38.5 million over the biennium. Part of that money will go toward pay raises for K-12 employees.

As part of the budget negotiations, lawmakers took out any  state money for covering mandated increases in employee share of contributions to the state retirement fund, shifting the money to salary raises instead. By 2017, employees will pay 2.67 percent of their salary into the public employee retirement fund, while the state will pay 13.45 percent of the employee’s salary into the fund.

Even after making hundreds of amendments to the JAC’s budget bill, the governor and the JAC members were able to recognize the essential skeleton of the bill.

“In the end the difference between the governor’s recommendation and the JAC recommendation was less than 30 million dollars, said Sen. Drew Perkins (R-Casper), a member of the JAC. “In some cases we funded the same things from different sources.”

Deep in the amendments, the budget bill became the venue for resolving, if only temporarily, a number of other thorny issues, including the negotiation of a Wyoming solution for Medicaid expansion. Another last minute amendment enabled the state to continue examining some standards for science curriculum, while dropping consideration of the Next Generation Science Standards, which some consider controversial for treating anthropogenic climate change as a fact.

“I thought it was a great budget,” said Lubnau. He was particularly pleased with the new $100 million School Foundation Program Reserve Account, which is meant to compensate for a projected reduction in coal lease bonus money after 2017. The bonuses have funded school capital construction for the past decade.

“I liked that we were able to start planning,” Lubnau said. “The biggest concern I have is the loss of coal bed bonus monies, so I thought we put in place a plan that anticipates the loss of those moneys and still allows us to continue school construction, though probably not at the same level as before.”

Interim topics

Lawmakers will continue work on a number of topics in preparation for the 2015 legislative session. One topic of discussion will be potential revisions to the state’s economic development grant structure. Over the past decade the Wyoming Business Council has grown to a significant size, and lawmakers want to reevaluate the grant-making process to ensure taxpayers are getting a return on the state’s investment.

Legislators will also look at major maintenance of institutional buildings within the Department of Health. A task force will work on plans for renovating the State Hospital, the Wyoming Veteran’s Home, and the Wyoming Life Resource Center.

Finally, the lawmakers will have the time and direction from the courts to consider lingering questions about the role of the Superintendent of Public Instruction. In January, the state Supreme Court struck down Senate File 104 from the 2013 session, the law that transferred most of the duties of the schools Superintendent to an appointed director.

In a meeting of the Management Council held during the final week of the session, legislative leaders tasked the Joint Interim Education Committee with proposing draft legislation to address the issue. The Education Committee will have to deliver its ideas by an April 30 deadline, and a majority of both the House and Senate members of the committee must approve the draft legislation.  Following that, the legislature is likely to call a special session to vote on the legislation in May.

But no matter what happens in the special session, the achievements, especially those that had little to do with the budget, will be remembered as special in their own right.

“At the end of the day this was an amazing session,” said Sen. Perkins. “You are able to drive 80 miles an hour down the highway to fish at night down the Moose-Wilson road with a four-wheel drive.  It’s a great day for America. You can even change a light bulb in a state building without having a licensed electrician for assistance.”

— Gregory Nickerson is the government and policy reporter for WyoFile. He writes the Capitol Beat blog. Contact him at greg@wyofile.com.