While Washington squirms under cuts, Wyoming saves

AP News
Posted: Mar 01, 2013 4:59 PM

CHEYENNE, Wyo. (AP) — While Washington DC squirmed this week over the impending federal government spending cuts, Wyoming lawmakers in Cheyenne — some 1,500 miles west — went about business as usual, wrapping up a legislative session that saw them vote to continue salting away hundreds of millions in the state's already bulging savings accounts.

Knocking Washington is almost a sport in Wyoming.

The state's two U.S. senators and lone congresswoman are all Republicans and all served in the state's overwhelmingly Republican Legislature before going to Congress. This year, as they always do, they returned from Congress to Cheyenne and regaled their former comrades with stories about how miserable and inefficient Washington is compared to Wyoming.

Wyoming Gov. Matt Mead, a Republican, had much the same message this week on his return from a trip to Washington where he and other governors met with President Barack Obama. Mead said the prospect of looming federal spending cuts took center stage at all the meetings.

"There was disagreement among the Democrats and the Republicans over whether that was the right amount of cuts or more cuts needed to be made," Mead said of his fellow governors. "But what there was agreement on was that by setting up something that they all say that they don't want now, and doing it on the 11th day, the 11th hour, that's no way to run a business. That's no way to run a railroad."

"I think that's one of the fundamental things that's wrong with Washington, D.C. — that they won't make those tough decisions," Mead said.

Wyoming perennially gets ranked near the top among the nation's best-managed states. The nation's least populous state with just over 560,000 people, it has virtually no debt and roughly $16 billion in various savings accounts, many of which are inviolate under the state Constitution. It's set to finish the current fiscal year with another $1.6 billion in its "rainy day fund."

Wyoming lawmakers, meanwhile, seemingly vie to see who among them can claim to be the most fiscally conservative. They rejected Mead's suggestion in this session to put less money into permanent savings to plump up the rainy day fund against the possibility that the state might need the money in years to come as energy revenues are expected to flat-line. Instead, the lawmakers say they want to continue to build permanent savings so investment proceeds can continue to help fund state government operations.

State financial analysts predict Wyoming's general fund revenues, which rely heavily on taxes on mineral production, will rise from an estimated $1 billion in fiscal year 2013 to only $1.1 billion by fiscal year 2018.

Faced with the mere suggestion of future revenue declines, the Legislature followed through on Mead's suggestion to cut most state agency budgets 6.5 percent this session. Mead vetoed legislative language that would have required state agencies to submit plans for similar budget cuts in the coming two years. He said there's no point in going through the considerable work of drawing up the cuts ahead of more concrete revenue projections.

Well managed as Wyoming may be, good old dumb luck certainly also plays a role in the state's current good fortune. The nation's largest coal producer, Wyoming's also rich in natural gas, oil and other minerals. Taxes on that energy production, although now flattening out following a boom in the last decade, still keep state coffers full despite the state's lack of personal or corporate income taxes.

Still relatively flush with cash despite a recent slowdown in the energy markets, the Wyoming Legislature this session voted not to accept the federal government's offer of $50 million to expand the Medicaid program to serve an additional 17,600 additional low-income adults. The few Democrats in the Legislature fought for the Medicaid expansion, one of the cornerstones of the federal Affordable Care Act.

Despite a state health department study that concluded expanding the low-income health program would save the state over $125 million over seven years, most lawmakers said expansion wouldn't be prudent when there's no guarantee the federal government can follow through on its promise to pay for it in years to come.

Many are still stinging from recent congressional action to strip away more than $700 million in Abandoned Mine Lands funding that it had agreed to pay Wyoming in coming years.

The health department took the position that the state should take the federal money for Medicaid expansion, and that if the money goes way, the state should stop serving the expanded population, Senate Majority Floor Leader Phil Nicholas said.

"There are a lot of us who believe you simply can't do that," the Laramie Republican said. "It's not a faucet that can be turned off and on, and once extended, those hands of aid can never be withdrawn."