Mead proposes $148 million in additional spending

In his last supplemental budget request, Gov. Matt Mead’s goal was to address areas that have experienced significant funding cuts, while also leaving almost $300 million to be added to the state’s “rainy-day fund.”

Unlike in previous years, where Wyoming faced balancing the state’s budget in the midst of declining funds, the October Consensus Revenue Estimating Group report anticipated higher revenues coming into state coffers. And that has allowed Mead, in the supplemental request he released Monday, to address issues ranging from state employee pay to creating an emergency account for future governors to use to address issues ranging from natural disasters to increased health-care costs.

“Because of the good news in CREG, we’re going to have an anticipated record amount in our rainy-day fund,” Mead said Monday.

“We’ll have a record amount in our permanent funds. We have smaller government in terms of the budget compared to eight years ago. We have streamlined state government to make it more efficient, which has allowed us to address these priorities.”

Mead said he is only allocating about 1.5 percent of the increased revenues the CREG report is now forecasting for Wyoming, for about $148 million in additional spending. The supplemental request leaves about $300 million in unallocated funds Mead hopes the Legislature will transfer to the Legislative Stabilization Reserve Account, which would push the rainy-day fund total up to $1.879 billion.

“If that money flows into the rainy-day account as we projected in my budget, the rainy-day fund will be at an all-time high,” Mead said.

“We have used the rainy-day fund to get over some of those difficult areas. And now we’re going to be able to not only replenish it, but to replenish it to a degree that it will be at an all-time high.”

A major component of the request is $12.1 million for increases in state employee pay. Of that total, $3.7 million would go to raising the pay tables for all state employees, while $8.4 million would go to merit-based pay raises. Mead said Wyoming has significantly high turnover rates for state employees, and the state needs to be competitive compared to both the private sector and neighboring state governments.

“We are currently at about 18.4 percent turnover. We’re having more and more turnover. Turnover is costly in terms of productivity. It’s costly in that you lose the experience. We train them, we get them experience. And that 18 percent-plus turnover is a loss to the state of Wyoming,” Mead said.

The request also earmarks $2.5 million to increase pay at the University of Wyoming to address market-pay gaps compared to the private sector.

Another major focus for Mead in the supplemental request is education funding. The request directs more than $19 million to fund external cost adjustments for K-12 schools, which helps districts deal with inflationary costs. Mead said while state government funding is on stable footing, the Legislature needs to solve the significant instability in K-12 education funding.

“I think if you separate the government operation side and the education side, we feel very solid on where we are (with government funding),” Mead said. “On the education side, there’s just no question that we have a gap in funding. It depends on how it’s looked at, but we estimate (a deficit) between $300 million to $500 million on the education side that needs to be taken into account.

“We have to take a serious look at how we’re funding education, because we can’t keep taking from the government revenue side to fund K-12 education.”

Mead said if the state stops putting general fund money and other revenue into the K-12 education system, the Legislature would have a better idea of the true funding problem.

Mead wants the School Foundation Program Account capped this year at $100 million and any additional government funding created by better-than-expected revenues moved back into the rainy-day fund.

“We really want to have delineation between education funding and government funding and what is the true gap in education funding,” Mead said. “If we keep mixing government funding savings and putting them over in education funding, we won’t get a true story (of the lack of resources).”

One new proposed spending area is the creation of a government emergency operations account. The budget request earmarks $30 million for the fund, which would be used at the governor’s discretion in certain instances.

Mead said the account could be used by his successor, Gov.-elect Mark Gordon, and subsequent governors to address unforeseen expenses. That could include dealing with paying for a response to a natural disaster like a wildfire or increased health-care costs.

The goal is to give governors spending flexibility without having to call a special session of the Legislature, Mead said.

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