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Wyoming Lawmakers Discuss the Next State Budget

The budget session of the Wyoming State Legislature is still a few months away. Lawmakers know the revenue picture for the upcoming cycle will be brighter than it has been in recent years when cuts to state spending were put in place. They also know it will be nowhere near the billion-dollar surpluses that Wyoming has enjoyed in the past decade.

“Revenues are increasing, and it’s going to be far better than we’ve dealt with in the last two years,” Sen. Marty Martin, D-Rock Springs, said. “Sales tax is increasing, severance tax is increasing and federal mineral royalties are probably also increasing,” he said, naming three major sources of income for the State of Wyoming.

Some lawmakers are taking a more cautious tack.

“It’s really premature to talk about it,” Sen. Phil Nicholas, R-Laramie said. Nicholas is the Senate chairman of the legislature’s Joint Appropriations Committee, whose job it is to review the state budget. If a surplus happens, it won’t be large, and it’s likely to be consumed by funding for cities, towns and counties, inflation and expanding fuel costs. “We have expanded the size of state government grossly in the past decade,” he said. “We have to halt that growth.”

The Wyoming legislature operates on a two-year budget cycle. The upcoming budget session, which starts in February, will set the budget for the coming biennium that starts July 1, 2012. The focus of the session is on setting state spending priorities; any bill that not’s a budget bill requires the agreement of two-thirds of the lawmakers in either chamber to be considered. The general session, during which any bill including adjustments to the budget may be considered, will take place in January 2013.

By December 1, Wyoming Gov. Matt Mead will announce his budget priorities; the basis for those is the budgets the departments and agencies of state government have submitted to the governor’s office for consideration.

In January, the Consensus Revenue Estimating Group will issue its projection for state revenues over the next several years.

Generally, the legislature’s Joint Appropriations Interim Committee holds a series of budget review hearings before the budget session gets under way in February. During the course of the legislative session, bills with spending not included in the governor’s proposed spending plan will also be considered and factored into the state budget.

The budget bill is considered in each of the chambers in turn, with three rounds of debate each during which amendments may be made. Once the House of Representatives and Senate have reached their own consensus on what the state budget should look like, those versions are reconciled through the work of a conference committee. When agreement is reached, the bill is sent to the governor for his signature. The governor has the ability to veto the budget, but he cannot threaten a veto.

The success of funding requests for a number of programs rests with something over which the legislature has no control, Nicholas said – mineral revenues. Because excess mineral capacity exists and consumption is lower, prices are lower and so is the resulting revenue from severance tax, he said. The global market, which is a driver of the state’s economy in the form of energy sales to China, is also contracting.

While revenues are dropping, some state costs are expanding. “Our state retirement is underfunded,” he said. “We won’t see it funded at 100 percent for 15 to 20 years. We’re looking at trends and trying to anticipate what we can afford. If you can’t sustain increases, you have to cut.”

On the chopping block is cost of living increases for state retirees. “We are eliminating those. The plan was never designed to support them,” Nicholas said. The state will in the next two-year budget cycle launch a program to teach state employees to save for retirement.

In addition to the regular run of state spending for salaries, equipment and programs, lawmakers are stashing money in the state’s rainy-day account among other places, to cover the cost of the $3 billion state budget; that’s where carry-over surpluses have gone for the last two years, Nicholas said.

Even with the tension between the need to save and the need to spend, Martin said he’s worked to get funding for Wyoming’s Aging and Disability Resource Center in the state budget. While the program is now federally funded, with one-time supplemental funds from the state, it’s clear future funding is intended to shift to the states. The ADRC is a single-stop service that provides a free and unbiased service to help Wyoming residents looking to help those who are aging or have disabilities find answers on where to find help and resources in Wyoming.

“It’s done exactly what we said it would do,” Martin said – provide help and save money. He said he hopes to address one stumbling block to success this year. He’s spoken with the governor and Tom Forslund, director of the Wyoming Department of Health, for one-time funding to eliminate the waiting list for community-based in home services. “It’s problematic because if in many areas we want to refer someone to the program we aren’t able to provide that service,” and ADRC can’t function properly so the savings of Medicaid funds won’t be achieved.

Martin noted that lawmakers, particularly those on the appropriations committee, are skeptical about increasing the state’s dependence on Medicaid. While home-based in home service is a Medicaid waiver program, the community-based version is not and is open to anyone in Wyoming, regardless of income, to pay for in home services on a sliding fee scale. “It’s so much cheaper than nursing home care.”

And while financial conditions have improved somewhat, Martin still urges caution.

“There will still be a concern with volatility in the stock market and what’s going to take place with the economy. We’re still on a rollercoaster. We say we’re not out of the woods yet,” he said.

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