Gov. Gordon’s Two-Year Budget Signals Caution for Uncertain Future
Governor Mark Gordon’s two-year proposed budget released Monday seemed to send a frank warning about the economic uncertainties facing the state in the wake of plummeting coal and mineral sales.
“The changes that are taking place in the energy industry will impact how we fund government services next year and every year after,” Gov. Gordon said in a Nov. 18 press release. “To prepare for this uncertain future, it’s important we limit ongoing spending, ensure government is operating as efficiently as possible, and limit the use of the rainy-day fund.”
The budget message spoke to the steady 35% decline in coal production over the past 10 years, and Gov. Gordon also noted that renewable and carbon-free standards adopted by 38 states currently “that have exacerbated an already volatile marketplace and have the potential to reverse the growth Wyoming’s oil industry has realized and further repress rebound in already stressed gas and coal markets.”
While avoiding additional spending cuts, Gov. Gordon’s budget message supported streamlining efficiencies with modest one-time investments in research and development to benefit the state’s energy industry, school safety enhancements, and minor technology, while cutting capital construction dollars, which pull from one-time investment dollars, to around $95 million instead of the $150 million originally proposed.
The budget message also mentions significant cut backs on new hires, supporting the addition of just a handful of the 127 employees requested, stating “these requests reflect the reality that our government has to do more with less.”
Mining, oil and gas, tourism, and agriculture were identified in the proposed budget as being Wyoming’s core economic drivers, including the allocation of $1 million for coal market augmentation and preservation, which can “be used to defend our energy industry, to sustain the revenue it provides for the state, and support local communities future planning,” as stated in the message.
Gov. Gordon also noted in the budget message that innovation is what will ultimately sustain Wyoming’s coal industry, and proposed allocating $25 million for an energy commercialization program to help “ensure the state’s research and development dollars are spent wisely.”
He also spoke to the need of examining tax burdens in the energy sector and asking if current tax rates support further development before he addressed tourism, in which he charges “the Office of Tourism to build on its promotion of every corner of the state.”
With regard to agriculture expansion, Gordon noted that the hemp crop, per a federal government Wyoming rules review, should be ready to join the 2020 spring planting season. The budget also proposed $500,000 to be set aside for predator control as “cuts to this program in the past have place an undue burden on ranchers,” while noting “it is critical to keep the industry strong.”
To this end, the budget also suggested making a $12 million one-time payout to the Wildlife and Natural Resource Trust Fund, in which “minerals, agriculture, and tourism can each point to a specific example of how this trust fund has benefitted their sector.”
Gov. Gordon also indicated his support for adding a new position at the Oil and Gas Commission to help monitor permitting system efficiency as well as his commitment to investing in Wyoming’s communities.
“I also remain committed to cities, towns, and counties and propose $105 million in funding for our local communities,” Gov. Gordon stated in the budget message, referencing the Wyoming Business Council’s need for an internal shift to positively impact the state’s future.
The budget further proposed that money allocated to school districts and construction be increased, borrowing $161 million in funds will come from the Legislative Stabilization Reserve Account, better known as the “rainy day” fund, to be used for legislatively mandated educational needs and community support.
“Despite the challenges ahead, I remain optimistic,” Gov. Gordon added in Monday’s press release. “Wyoming people have always persevered through adversity. Our conservatism is crucial as we exhibit fiscal restraint and acknowledge that government cannot be everything to everyone.”
He mentioned several times in the budget message the need for diversification of Wyoming’s economy to help grow businesses and jobs.
The website “Wyoming Sense” is set to launch soon in support of Gov. Gordon’s transparency efforts. It is meant to allow taxpayers to see how public funds are being spent.
Gov. Gordon’s letter to the 65th Legislature is available online as is the detailed budget proposal. Gov. Gordon is scheduled to appear before the Joint Appropriations Committee on Dec. 9.