CASPER, Wyo. — Wyoming House Minority Leader Patrick Goggles was back to work less than 24 hours after his re-election, sponsoring a bill aimed at diverting a portion of the Permanent Mineral Trust Fund to fill gaps set in place by Gov. Matt Mead's planned 8 percent budget cuts.
The bill doesn’t suggest taking money out of the fund. It proposes taking a percentage of severance taxes from mineral revenues and putting them in the general fund instead of the Permanent Mineral Trust Fund. The crux of the discussion, Goggles said, will be determining the amount of funds that would be available for diversion. He wants to use one-half of 1 percent.
Goggles, known for his ability to work on both sides of the political aisle in the Legislature, doesn’t expect the lawmakers to rubber-stamp a first draft. Members in both parties are looking at ways to fill the future gaps in the state’s budget, and finding the right dollar amount won’t be easy, Goggles said.
“That’s what needs to be worked out,” he said. “You have to start someplace.”
Goggles, D-Ethete, spent no time celebrating his victory in Tuesday's election. He woke up Wednesday morning and had the Legislative Service Office start drafting the bill.
His proposal would help fund the Department of Health, Department of Corrections and higher education, which are in the cross-hairs of the cuts. Those three areas are 60 percent of the state’s budget, said state Sen. Phil Nicholas, R-Laramie. He is a co-chairman of the Senate Appropriations Committee and said using money from the mineral tax revenues is a “last lifeline.”
With natural gas prices expected to plateau at $4 per thousand cubic feet, he said, Wyoming could be facing its own fiscal cliff if it doesn’t protect revenues that come from the energy industry.
When dividends from the trust exceed 8 percent of its worth, the Legislature puts it into a Spend Policy Reserve Account. When dividends are below 5 percent, the state uses money from the reserve account. If money is not going into the account, the money won’t be there when the state needs it, he said.
“We’re not in an emergency,” he said. “All the precautions we’re taking are going to prevent us from having one.”
Rep. Mary Throne, D-Cheyenne, said the Legislature needs to have a discussion about using the funds to fill the future gaps.
“It’s possible to make other long-term investments in the state,” she said in reference to the mineral trust. Throne has wanted the issue brought to the table for months. She submitted a bill this summer that was similar to Goggles'. She wants to see more data before she concedes that money in the trust is untouchable.
“Show me a spreadsheet. Show me the numbers,” she said.
If the severance tax runs dry in 10 years, she asked, “Will the state be better off with decaying communities and decaying roads?”
The budget cuts will begin to take effect in July and will save the state more than $74 million in fiscal year 2014. State law protects K-12 schools from the cuts.
Mead has yet to speak with Goggles about his legislation, but he wants to have a conversation, said Renny MacKay, the governor’s spokesman.
The governor realizes the state can’t save “the same as we did during the boom times,” MacKay said, but he would not favor spending any money diverted from the Permanent Mineral Trust Fund.
Mead’s goal is putting the money in savings accounts with different rates. If money from the mineral severance tax were to be diverted anywhere, the governor and Nicholas would want it in the Legislative Stabilization and Reserve Account, also known as the state Rainy Day Fund, to accrue interest.
Mead has called for tapping into the rainy-day savings for big-ticket items like $45 million for fire suppression and $58 million for the Madison Water Project. The Legislature can access the rainy-day fund through budget recommends by legislators.
Throne said the money is a sacred cow for some lawmakers and was stored away more than a decade ago when the state had no other option but saving.
It would be impossible to raise revenue without money from the mineral trust and the rainy-day fund, Nicholas said. The only other way, he said, would be a state income tax.
“There will be and there should be a lot of discussions,” Nicholas said.