Wyoming Governor Mead addresses new revenue report

CHEYENNE – Governor Matt Mead held a phone conference on Monday addressing the most recent Consensus Revenue Estimating Group Report (CREG), and outlining budgetary goals for 2017. The CREG projections are the basis for state budgetary recommendations.

According to the 2015-16 actual versus 2017-18 projected revenue, the CREG report showed an actual $138 million drop below projection, creating a $42 million shortfall. Total actual revenue available for the state is at just under $2 billion.

As explained by Governor Mead, the revenue shortfall, due to decreased coal and gas revenues, amounted to a negative $355 million to the state general fund, leaving only $156 million available.

According to the report, 2017-18 appropriations for spending would amount to just under $2 billion, after $250 million in legislative reductions.

The budget reserve for 2017 would be $8,157,625, down from $104 million in 2015.

“As of October 17 we have realized gains of around $26 million,” Mead told the press. “As we make cuts that are difficult to make, we will continue to grow our rainy day and savings funds.”

Mead mentioned that commodity prices are on the way back up, which would provide enhanced mineral revenue to the states, but after facing $250 million in cuts, the savings will take time to rebuild.

“We haven’t built our budget [for 2017] yet,” reminded Mead, “so I haven’t addressed what we will do about education, but I will say we would use our rainy day fund over the next two years for things like Title 25 programs.”

He added, “We have to be conservative in the use of the rainy day fund, but we are not going to cut our way back into prosperity,” Mead said. “When 70 percent of your revenues come from minerals, you have to recognize that is a big deal.”

Mead said he won’t propose any additional cuts to state agency budgets in response to the revenue forecast but will present a draft budget to lawmakers in early December. The Legislature will convene in January.

State lawmakers early this year approved spending roughly $300 million from the state’s so-called rainy day fund, leaving about $1.5 billion. Mead said he doesn’t know yet how much he will propose the state should spend from the fund next year.

Mead again stressed the need to expand Medicare, stating that revenue was being missed without expansion, and noted that “most of our hospitals are running on only 60 days worth of emergency cash.”

“It’s still a hard news story, but it’s not a disaster,” said Mead, noting that the state budget will take years to correct. “Relative to the size of our budget, it’s something we can get through.”

The CREG report states that the decline in coal production that Wyoming has experienced so far this calendar year has been unprecedented. “Surface coal production in Wyoming declined by 58 million tons, or 31.8 percent, year-over-year for the first six months of calendar year 2016,” it states.

“There is not a lot of optimism in any of the three major commodities, oil, coal and natural gas,” said CREG Co-Chairman Alex Kean told the Associated Press Monday. “And what the state experienced in 2016 is decreasing in price and production in all three of those at the same time.”

Wyoming, the nation’s leading coal-producing state, has seen federal coal-lease bonus payments and mineral royalty payments drop by roughly 50 percent, or $500 million a year, over the last decade.