Governor Matt Mead complimented lawmakers for their hard work on the supplemental budget bill. That budget, for Fiscal Year 2014, starts on July 1st and will reduce ongoing spending by over 6%. It also eliminates over 130 positions across state government. Governor Mead recommended this cut to the Legislature in response to declining revenue from natural gas -- Wyoming's largest source of revenue. Governor Mead did disagree with parts of the bill and vetoed those parts.
"This is generally a conservative budget, which reverses the trajectory of budget growth and provides a line to hold in future years. Specifically, the cuts respond to the decline in natural gas prices and coal production in 2012 and will reduce spending in the next budget," Governor Mead said. "I have some strong ideas about how to improve this budget and I hope that legislators will consider them carefully."
In the budget bill the Legislature directed state agencies to prepare 4, 6 and 8% reductions for the next biennium. Governor Mead favors more flexibility, "In my view, budget decisions should be based in part on revenue. The budget I will develop over the coming spring, summer and fall will take into account any changes in revenue and also the efficient delivery of services. For example, last year the Legislature asked for 4% reduction proposals from most agencies but when the revenue outlook deteriorated after the session ended, I asked for 8% reduction proposals. Ultimately, I requested a reduction in ongoing spending of about 6.5%. I will continue to be responsive in the coming years."
Governor Mead said requiring specific reduction figures before revenue projections are updated ignores the work of the Consensus Revenue Estimating Group (CREG) and does not help make government more effective. "Rather than increasing government efficiency, this makes for considerable work and eats into time and resources which could be put to other use. In addition, this ties me to specific reduction figures, when a greater reduction may be needed or it may be best to hold spending flat," Governor Mead said.
Another one of Governor Mead's line-item vetoes makes more money available this summer to fight wildfires. The state spent approximately $45 million fighting wildfires in 2012. This session the Legislature directly appropriated $31.2 million for fighting fires in 2013. About $8 million of that amount must go to paying off costs remaining from 2012. "I want to be prepared to vigorously protect lives and property when fire season begins. To budget with less money than was used last year could require me to take money from other agencies and from services that the Legislature has endorsed. Depending on the extent of money moved to fight fires, other agencies' budgets could be greatly affected," Governor Mead said. His veto allows contingent access to $30 million for fighting fires from the landfill account.
The Governor believes the budget should recognize there may be fires in the season ahead and provide sufficient funding if it is required. The budget should also be transparent in terms of where fire suppression money comes from. "Rather than planning to take from others where the Legislature has provided specific funding or services - not from money designated for fires, the Legislature instead should directly budget for fires. Emergencies or natural disasters are hard to predict but where we can anticipate, as we can for fires, we should budget accordingly and know the funding source," Governor Mead said.
Governor Mead also vetoed language in the bill changing the 2012 policy of sweeping excess monies from the General Fund and Budget Reserve Account into the Legislative Stabilization Reserve Account at the end of the biennium. The new language would have allowed for an annual sweep of the money. Governor Mead said the previous policy allowed a good revenue year to balance out a bad year. "If you capture what may turn out to be revenue from a good year at the end of this fiscal year, you may remove what could balance a bad one in 2014. The biennial total will not be known until the end of Fiscal Year 2014," Governor Mead said the approach taken by the Legislature last year is the right approach."
In his message to legislators Governor Mead thanked legislators for setting up a way to capture some excess revenue for strategic one-time investments and projects in the future. Governor Mead also expressed concern about other aspects of this budget, but did not line-item veto any of the language.