With Revenue Down, a Tough Wyoming Legislative Budget Session Ahead

State legislators looking ahead to the upcoming budget session early next year already are considering how to keep Wyoming running on less money.

The state, which until recently has benefitted from record-high energy prices, has suffered from a subsequent downturn in mineral values. That decrease in revenue has been coupled with a nationwide recession and record-high unemployment. Still, Wyoming is faring better than most places (California, for instance, is nearly bankrupt). Wyoming legislators socked away millions of dollars in the Permanent Mineral Trust Fund when commodity prices were at their peak.

Earlier this year, Gov. Dave Freudenthal, a Democrat, instructed state entities to cut 10 percent of their budgets for Fiscal Year 2010. Offices and agencies were given the flexibility to cut as they saw fit, according to a spokesman for the governor.

“That reduction is being factored into the governor’s budget recommendations for the next biennium, and the savings will most assuredly help deal with the anticipated revenue shortfalls,” said Chris Boswell, the governor’s chief of staff.

Freudenthal must make a 2010-2011 budget proposal by Dec. 1, which will then be reviewed by the Joint Appropriations Committee, led by Sen. Phil Nicholas, R-Laramie and Rep. Rosie Berger, R-Big Horn. Then in February, the Wyoming Legislature will convene its budget session.

Nicholas said Wyomingites shouldn't be concerned that essential programs will get cut in the budget.

"I'm not worried about maintaining services at the existing levels" Nicholas said.

But he warned that legislators may not be preparing people for tighter times ahead.

"Legislators are making promises to constituents that we can't bank," he said. "All the agencies—Departments of Family Services and Health, Medicaid, those special groups—none of them think they have enough money and they're going to want to have pretty significant increases."

But Rep. Bryan Pedersen, R-Cheyenne, is among those who is warning constituents of the economic realities ahead.

“Expect the budget to be lean for the upcoming biennium,” said Pedersen, a member of the Joint Appropriations Committee. He blames much of the state’s revenue problems on a dip in demand for commodities, such as coal.

Nevertheless, Wyoming must continue to offer essential services, such as Medicaid, which is projected to cost $100 million more, according to a forecast Freudenthal announced in September.

Medicaid recipients have less to worry about, Pedersen said. Higher unemployment has put a strain on this program that helps lower-income people, but because it leverages state dollars with federal funds, Wyoming legislators would be reluctant to make reductions, he said.

"It is more likely that we would take money from other areas that do not have a match or are further down the ladder of health services," Pedersen said.

And Boswell said funds from the federal American Recovery and Reinvestment Act, or stimulus bill, will help address most of the increased Medicaid enrollment costs.

No one doubts that legislators will have to make tough and painful choices. Still, Pedersen said the 10 percent budget cuts positioned the state well.

"I believe that we will be able to maintain the 10 percent budget cuts the Governor implemented without going deeper at this point," Pedersen said.