Department of Health Describes Difficult Budget Reductions

The Wyoming Department of Health (WDH) is describing the agency’s planned budget reductions for the current two-year budget period as difficult and unfortunate.

“We wish we did not have to take these actions,” said Michael Ceballos, WDH director. “It’s tough to announce these budget reductions, but with the obvious decline in state revenues, the need to reduce our budget simply can’t be ignored.”

Wyoming’s governor asked all state agencies to prepare significant budget reductions for the 2021-22 biennium, which began July 1.

The reductions announced by the department represent just over $89 million in general fund dollars for the two-year budget period. The department will also forfeit an estimated $49 million in federal matching funds. As a result, the total expected budget reduction is approximately $138 million. However, due to one-time savings identified, the department will be able to take advantage of temporary increases in federal and other funds of approximately $21.5 million for the 2021-2022 biennium, making the realized total cut about $116.5 million during the same period. The reductions associated with the one-time savings are not intended to continue past the current budget period.

“Many of our programs involve federal matching funds. We are unable to reduce the amount needed in state general fund spending without a corresponding loss of federal matching funds,” Ceballos said.

The combined reductions represent about 9 percent of the state general funds included in the department’s two-year budget.

A summary of the planned WDH reductions can be found online at https://health.wyo.gov/admin/fiscal/.

“We know these reductions will cause difficulties for many of our current providers and clients. Reductions of this scale can’t be made without significant impacts in communities across the state,” Ceballos said. “It’s especially unfortunate when you realize most of our programs serve Wyoming’s more at risk citizens including our older residents, disabled individuals and those with very low incomes.”

Before making recommendations, WDH leadership carefully evaluated the department’s budget based on several key principles:

• Avoid across-the-board reductions

• Minimize impacts on vulnerable populations;

• Minimize impacts on the behavioral health continuum, including the department’s two safety-net facilities – the Wyoming State Hospital and the Wyoming Life Resource Center

• Reduce administrative and support service expenditures

• Explore alternative options for current biennium cost savings

The department’s plan, which has been accepted by the governor, involves a combination of reductions in administrative costs, contracted services, program elimination and program reduction.

The new reductions follow departmental budget reductions made in 2016 of about $143 million (combined state and federal funds).

At the governor’s direction, WDH leadership is also preparing a plan for a potential additional round of budget reductions.

“If it remains necessary to go ahead with this next round of reductions, we will see significant program eliminations and larger changes to existing programs with even greater impact on our partners and those citizens we serve,” Ceballos said.