Legislative panel rejects Wyo. Gov's proposals

CHEYENNE, Wyo. (AP) -- The legislative panel responsible for drafting a supplemental Wyoming state budget bill is recommending that lawmakers reject Gov. Matt Mead's proposal to reduce the flow of state energy revenues going into permanent savings and school construction.

The Joint Appropriations Committee voted on Friday to reject Mead's proposal to redirect about $130 million of energy revenues a year that's now flowing into permanent savings into the state's Legislative Stabilization Reserve Account.

The state Constitution directs 1.5 percent of severance tax revenues into permanent savings. Mead has asked lawmakers to redirect an additional 1 percent revenue stream, called the "statutory flow," that goes into permanent savings under state law.

"Under my proposal, we will continue to save more in the stabilization account. And by doing so, we will strengthen our ability to weather tough times as well as add transparency," Mead told lawmakers in his State of the State address earlier this month.

Money in the reserve account earns interest, but it's available to be spent if the state needs it for operations. The state may spend only the interest from permanent savings.

Rep. Sue Wallis, R-Recluse, serves on the House Appropriations Committee. She said Monday that members of the committee see the statutory flow into permanent fund as the Legislature's safety net.

"We are not comfortable diverting that until we absolutely have to," Wallis said. "And we don't absolutely have to. It's not that rainy of a day, yet."

Sen. Eli Bebout, chairman of the Senate Appropriations Committee, said Monday that many veteran lawmakers recognize that revenues from the state's Permanent Mineral Trust Fund saved the state in the 1990s when other sources of state revenues dried up.

"The interest income off of that going to our general fund, and that has dropped down in terms of a percentage of our revenues for the general fund expenditures," Bebout said. "So anything we can do to build that up, I like. And I think that's a better long term approach for the peaks and valleys we experience, so I like that."

The committee voted against Mead's proposal to change how the state handles the sale of assets held by the state's Permanent Mineral Trust Fund. He had proposed skimming off capital gains realized when the state sells assets to rebalance its investments and putting them into the Legislative Stabilization Reserve Account.

And the committee also voted to reject Mead's proposal to end the state's practice of earmarking federal coal lease bonus money for school construction. The state expects to receive more than $700 million from the program over the next five years. He said that would still leave $600 million for school construction.

Mead has said the state has done much in recent years to address its school construction needs but now needs the money for other priorities.

The committee rejected Mead's proposal for state employee pay raises, instead opting for a bonus program that would also extend to K-12 teachers.

Mead had proposed $11 million for public employee raises, of which $2.5 million would be used for one-time bonuses. That would have covered average raises of about 2 percent for state employees. The committee instead endorsed a 1-percent bonus for all state employees, including teachers.

Most state employees haven't seen raises in four years while their take-home pay has dropped due to higher retirement contributions. But teachers are covered by a different system and have received pay raises in recent years. The committee's bonus approach wouldn't raise state employee baseline salaries for purposes of calculating any future raises.

Legislative staffers now are crafting the committee's recommendations into a bill that will go to both houses of the Legislature. The supplemental budget bill would be in addition to the $3.2 billion state funds budget lawmakers approved last year for the biennium that runs through mid-2014.

Mead has said he proposed his fiscal policy changes in anticipation of projected flat energy revenues in the years to come. His proposed supplemental budget calls for cutting state agency budgets an average of 6.5 percent, excluding one-time project spending.

The state's Consensus Revenue Estimating Group, a panel that projects revenues from all sources, last week issued an update that projects the state's general fund revenues will rise from an estimated $1 billion in FY 2013 to only $1.1 billion by FY 2018.