Peterson: Cut more before dipping into savings

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By David Peck

When the 2016 budget session of the Wyoming Legislature convenes next Monday, lawmakers will face a severe revenue shortfall that will make forging a budget for the 2016-18 biennium a challenge, Sen. Ray Peterson (R-Cowley) said this week.

But while Gov. Matt Mead is proposing borrowing from the state’s so-called rainy day account, Peterson wants to take a fiscally conservative approach that seeks to maximize savings within state departments before tapping into savings.

“We’re still facing about a $200 million shortfall for this budget year (2014-16),” Peterson said. “We’ve got to fill that hole first. We estimate the take (revenue) and budget under that, but this time the projected intake didn’t keep up with the spending.

“The governor has recommended dipping into savings (a loan from the rainy day fund) with a payback plan, but the old-timers say it’s not raining yet,” Peterson said. “I somewhat agree with them. I’d like to take the position first to attack our spending and limit that spending rather than finding new money to throw at programs and departments. My perspective is to look at the departments. What areas are you ineffective in, or fat in?

“Instead of finding new money, force them to prioritize and cut away unnecessary expenditures. Of course, they’ll claim it is a necessary expense, but we’re down to it.”

Peterson said K-12 educators are screaming about funding cuts but noted that they haven’t “been hit” by funding cuts in many years.

It’s not easy, Peterson acknowledged. Department heads, he said, will have to examine their budgets carefully, along with legislators, asking, “Are we cut to the bone, and when do we sacrifice vital and critical programs?”

“I’m sure department heads and financial managers are pulling their hair out trying to figure out how they’ll meet the fiscal needs,” Peterson said, “but I think it’s a healthy exercise. It’s always healthy to review expenditures and this budget is forcing us to do that.”

Once the appropriations committee finalizes the budget, individual legislators will be able to amend the budget, Peterson said, by offering amendments.

“That’s the game they play,” he said, “convincing individual legislators to make their case on the floor. It becomes a battle of who can convince other legislators.”

Peterson said spending “naturally grew” during years of strong revenue, but he said the legislature was generally frugal and spent the money wisely, investing much of it, saving it, passing it to local government, building schools and maintaining infrastructure.

The money was wisely spent, he said, but additional money creates a false floor, and when tougher times come the state must scale back and return to normal procedures.

“When you do that there’s a lot of screaming and yelling saying ‘you can’t do that,’ but they were OK seven or eight years ago,” Peterson said. “I’m convinced there’s still some fluff we can scale back.”

Medicaid expansion

Despite Gov. Mead’s plea for the legislature to approve Medicaid expansion, Peterson said he remains opposed to the idea.

“My feelings haven’t changed,” he said. “It’s the wrong approach and the wrong direction to take with our health care. I’ve never agreed with expanding social programs and increasing dependency on governmental services or programs. In my mind that’s what it’s doing. And I keep saying the federal government doesn’t have the money.”

If the federal government, massively in debt, doesn’t have the money, neither does Wyoming, Peterson said, noting that expanding Medicaid would add probably around 25,000 enrollees, rather than the estimated 20,000 figure being used. At a cost of $581 per month per enrollee, the cost of the program in Wyoming would be $174.3 million, and even if Wyoming only has to pick up 10 percent of the cost, that’s an increase of $34 million per biennium to the Dept. of Health budget.

“Where’s that going to come from?” Peterson asked. “It means increasing taxes or cutting programming somewhere else. Somebody’s going to take a hit.”

Peterson said he would love to find “a Wyoming solution” to the issue of helping families in need, as well as small hospitals, which is why he sponsored legislation a year ago for a direct appropriation to help hospitals with the cost of uncompensated charity care.

Many small hospitals are operating on a very small margin – just a few weeks of operating funds – and he called community hospitals “our safety net.” But at a time when the federal government is stripping Wyoming of Abandoned Mine Land funding and waging a war on coal that robs Wyoming of coal lease bonus money, the federal government wants to “give” the state millions for Medicaid expansion.

“I guess I can’t be bought for $200 million when they’re taking a billion away,” Peterson said.

Bills

Peterson said he is sponsoring three bills heading into the session including Senate File 18, which he said helps small businesses in Wyoming who cannot compete with large out of state providers of fixtures during large building projects, noting that many project planners now use design groups to provide chairs, desks, fixtures and equipment and to handle the bidding process.

Many of the design groups and architects are located out of state and naturally obtain fixtures from large suppliers, but the bill would help Wyoming companies by requiring architects and designers to specify brands and manufactures but also allow substitutions for products not available from Wyoming suppliers. It also institutes an additional 5 percent preference for Wyoming suppliers in the bidding process.

Peterson is also sponsoring Senate File 20 on sales and use tax revisions and a third bill with no number yet assigned to transfer the Wyoming Rural Development Council from the Wyoming Business Council to the Dept. of Agriculture to enhance the future of the WRDC.

Committees

Peterson remains chairman of the Senate Revenue Committee and a member of the Senate Labor, Health and Social Services Committee. He also sits on the Capital Investments Committee, the Employee Compensation Commission (co-chairman), the School Facilities Select Committee, the Select Committee on Mineral Taxes and the Select Committee on Title 25.

Peterson noted that the legislature will not meet in the capitol building this session or next while the capitol is being renovated. He said the legislature is meeting in the Jonah Bank Building located between Pershing and Del Range in Cheyenne, east of Cheyenne East High School.

Peterson may be contacted during the session via email at ray.peterson@wyoleg.gov.

The 20-day session is expected to run through Friday, March 4.

 

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