Local Legislators: More Cuts Are Coming

Dismal revenue projections for the state have spurred talks of creating additional revenue streams and cutting funding to education along with nearly every state provided program, Wyoming legislators said Wednesday.  

During the 2021 Legislative Session, legislators are expected to contend with a $171 million deficit. By 2025, that deficit could increase to nearly $1 billion, according to a joint statement issued Feb. 17 by Reps. John Bear, Bill Fortner, Tim Hallinan, and Chris Knapp along with Sen. Troy McKeown (all R-Gillette). 

“There are no sacred cows,” the statement read, which further noted that cutting education funding is inevitable at this point given the State School Foundation Program, used to fund K-12 education, faces a $298 million shortfall that could grow to $649 million by 2025.  

Education thus far has been spared from recent rounds of budget cuts from Wyoming Governor Mark Gordon, aside from a voluntary 10% cut requested in 2020, and remains one of the most prominent gaps in the current session’s budget, according to the statement.  

“The legislative majority will work hard to ensure reductions to K-12 education are made prudently, fairly, and as far away from classrooms and educators as possible,” the statement said, which doesn’t specify how much the Legislature will be looking to cut.  

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The recent round of reduction proposals follows an announcement by Gordon at the end of 2020, which revealed the governor’s supplemental budget proposal announcing the $298 million shortfall would be covered by the state’s legislative stabilization reserve account, also known as the “rainy-day fund.”  

But that reserve account is dwindling fast. The state’s rainy-day fund currently sits at $1.3 billion. By the end of fiscal year 2025, that amount could decrease to less than half, which would deplete the account below the required minimum balance of $500 million and would eliminate the Legislature’s ability to cover K-12 education funding deficits, local legislators predict.  

Additionally, education funding is nearing a point where it will no longer be able to cover the costs of maintaining schools, per the statement, with a $20 million deficit in the school district capital construction account this round. 

School district capital construction accounts, unlike the $298 million deficit in education operational costs, do not have back stops to fall back on and are not covered by the rainy-day fund, meaning that any deficit accumulates year over year, according to the statement. 

By 2025, that deficit in school district capital construction could increase to $314 million.  

Across the board, energy production and prices are falling after a long history of being Wyoming’s primary economic drivers; however, dependence on the volatile energy industry has resulted in the mass deficit for the state, according to the statement.  

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A long-standing expectation that oil, natural gas, and coal would rebound is likely not to happen, according to predictions, especially with President Joe Biden assuming office with a plethora of executive orders designed to significantly reduce carbon energy production. 

Earlier this week, Wyoming felt the first tremors stemming from those executive orders when oil and gas sales from the Bureau of Land Management were halted across half-a-million acres, according to a story posted by WyoFile 

With the decline in energy production, the state budget crisis is only expected to get worse, local legislatures predict.  

“We must either reduce government programs or generate new revenue, or a combination of the two,” the statement read. “Ultimately, it is a decision the public and lawmakers must decide  what level of government services we want and how we are going to pay for them.”