Oct. 24–CHEYENNE — Gov. Matt Mead said a budget report released Wednesday confirms his belief that another round of state budget cuts will not be needed.
The state’s Consensus Revenue Estimating Group, or CREG, reported that Wyoming’s revenues beat projections by about $333 million for the fiscal year that ended June 30.
This is almost entirely due to a record-setting year for investment earnings.
Much of the excess revenue will be automatically transferred to various savings or reserve accounts.
But Mead said there will also be ample money available for the 2015-16 budget.
“So for the next biennium, and for the budget session coming up, we are certainly going to have money to cover what our last standard budget was,” he said. “And we’ll have money for some of the exception requests that I want to address.”
Mead said he will meet with legislative leaders next week to discuss his budget priorities.
But he said during a news conference Wednesday that he still plans to seek salary increases for state and University of Wyoming employees.
“We don’t know the amount yet because we are still working with every agency and going through their budgets,” he said. “And I need to get a total number of the budget requests made by the agencies, pare that down to what I think is appropriate and look at the salary increases we can provide for our state employees.”
He said he would also like to use money from the surplus on several capital construction projects, including the State Capitol renovation and improvements to the Wyoming Frontier Prison in Rawlins and the Wyoming Life Resource Center in Lander.
He said the surplus money could also be used to:
– Offset the new mandatory Medicaid expansion costs that are expected to cost $24 million for the biennium.
– Provide more funding to reduce the waiting lists for the Medicaid development disability and acquired brain injury waivers.
– Increase aid to local governments.
– Further shorten the amount that the Wyoming Department of Transportation says it needs to be able to maintain the state’s highways in their current condition.
– Help fund the Game and Fish Department.
But Mead said the state still needs to spend and save money cautiously and conservatively.
He said this is highlighted by issues raised in the CREG report regarding future revenues from severance taxes.
“A note of caution as we look at the revenue forecast going forward: There is concerns of coal being relatively flat and natural gas not being where we want it to be,” he said. “Oil looks pretty good going forward, but we are concerned about the revenue from natural gas and coal.”
The CREG report forecasts revenues through 2018.
It projects Wyoming oil production will increase 6 percent in 2014, 4 percent in 2015, 3 percent in 2016 and 2 percent in 2017 and 2018.
The report also shows that revenues from natural gas will continue to increase n but not at the pace the state experienced in recent years. This is because even though prices are expected to climb slightly, the report predicts production will drop, especially in the near future.
But there are even more worries for coal.
The report states that “several headwinds continue to face (Powder River Basin) coal,” including competition from cheaper natural-gas fired plants.
It projected earlier this year that coal production and revenues would continue to climb in the next several years. But the new revised forecast shows revenues holding steady through 2018.
Mead, however, said he is still optimistic about the future of Wyoming coal.
He recently returned from a trade mission to South Korea and Taiwan to, in part, speak about the potential of exporting coal to the Asian markets.
“Both countries are so interested in Wyoming coal that had I had coal on my person, I think they would’ve purchased it right there and then,” he said. “So the market is there. They want our coal, and they understand what we have to work through in terms of ports and rail.”
Mead said he will continue to work with agencies and lawmakers to develop his budget recommendation in the coming weeks. He is expected to unveil his 2015-16 budget proposal by Dec. 1.