Wyoming Department of Health Director Tom Forslund did not mince words to lawmakers Tuesday.
“I just can’t handle it this time around,” he said of the $32 million deficit facing the department, which has cut roughly $100 million already. “This’ll be the first time in my career of public management that I haven’t been able to deliver a budget in a time period under what was authorized. We’re going to blow through it. ... I need help from the Legislature.”
Such was the tone of the health department’s presentation to the Joint Appropriations Committee. It had been cut and cut, and the stark reality, Forslund said, was that there wasn’t $32 million floating around that could absorb the deficit.
The shortfall is largely accounted for by a wave of older Wyomingites moving into long-term care facilities, a wave that will only swell as baby boomers age and require more care. In a document detailing the department’s budgetary needs, at least $28 million of the shortfall was directly related to Wyoming’s aging population.
While $32 million seems significant now, the costs will only climb from here, Forslund said. Long-term care costs about $130 million a year now and could more than double to $312 million by 2030.
Forslund — and Gov. Matt Mead — had sounded the alarm about the situation before. Forslund appeared in front of lawmakers in October and warned them of what was needed now and what would be needed in the future.
He told lawmakers Tuesday that there were five subfactors — which tentacle back to the larger issue of Americans simply aging — that are going to contribute to this growth.
One is that the older population is “increasingly burdened with chronic disease” and that those people are living longer. Second is that there’s a “decreasing ratio” of working-age adults to retirees, meaning that there are fewer people to pay into the programs that pay for their elders. Third, long-term care is costly. Wyoming spends the fourth most money in the country on the aged and the ninth most on caring for those with disabilities, Forslund said.
Fourth is that fewer people are prepared to pay for their own long-term care, meaning they end up on state Medicaid rolls. And finally, the long-term care insurance market is “small and weakening,” Forslund said.
Past cuts have left the department with fewer options to move money around and absorb the $32 million shortfall elsewhere.
“Our ability to flex out is greatly diminished,” the director told lawmakers. “I just don’t have the ability to handle the type of unanticipated costs or unusual things that come up as we have been. Because of this Medicaid overrun, we are trying to absorb a portion of them by moving money around. But we can’t absorb all of this overage.”
While the government can’t stop people from aging and it can’t stop them from moving into state nursing homes, it can work to keep them home longer — a cheaper and, officials say, patient-preferable option.
“The longer we can keep them out of the nursing home and in their home, the less expensive it is for the state and generally more rewarding it is for the individual,” Forslund told lawmakers. “We hope, as part of our strategy, is to increase these home and community based services significantly to try to better control nursing home costs.”
Asked if that would really be cheaper, Forslund said nursing home costs were “157 percent higher” than those receiving care in their home.
There’s the $32 million that the department is short for the remainder of this two-year budget cycle, which ends June 30. For the next cycle, Forslund requested an additional $49 million from lawmakers — roughly $25 million of which is for the aging population.
Contributing to both the $32 million current deficit and the $49 million supplemental request was Mead pivoting away from a legislative decision. Lawmakers had previously stripped funding from Medicaid programs for certain individuals with disabilities and with cervical and breast cancer. The thinking was that these individuals could get insurance from the health care exchanges.
But Mead apparently balked at the move, Forslund said, because he thought it was too important to cut. Though the funding — $1.5 million of it — was gone, the governor told the health department to find the money and keep the programs alive.
Overall, Forslund said that he hoped he was giving lawmakers his worst-case scenario.
“I need help is what I’m telling you,” he said.
“So do we,” said committee vice-chairman Rep. Bob Nicholas, a Cheyenne Republican.
“I think we’re in this together,” Forslund replied.
The Natrona County School District has eliminated 108 positions over the past three years, including about 15 percent of its district staff, as it has worked to absorb at least $12 million in cuts.
That number was split evenly between school and district-level positions.
The district axed the positions through retirements and reassignments, officials have said, not layoffs. In all, Natrona County has eliminated 14.6 percent of its district-level positions and 2.9 percent of its school-level positions.
The total number of 108 is almost certain to grow. The district has for years offered an incentive to employees who let their bosses know when they planned on leaving. But in light of the economic situation, which will cost the district at least $8 million through the next two years, officials made the incentive stronger in fall 2017: Employees who told the district they would leave in 2020, for instance, received an immediate, one-time payment of $10,000. Those who said they’d be gone by June 2018 were given $4,000.
The enhanced program attracted a total of 216 employees who said they planned to leave in the next three years.
Another 22 employees had already announced, via the old notification program, that they would leave by 2020.
In all, the 238 employees who’ve said they’ll leave in the next three years represents more than 10 percent of the district’s workforce.
Superintendent Steve Hopkins stressed that the program wasn’t an early retirement incentive; it was intended for the district to know what positions would be left open and when. That would give the district the chance to decide whether to fill the spots or eliminate them once they became open.
At a school board subcommittee meeting Monday, Hopkins told board members and district officials that the $2 million incentive program was “very successful.”
Among the immediate departures are a number of high-ranking district officials and principals. Kelly Walsh Principal Brad Diller is one, as is a KW assistant principal, Kathleen Neely. Natrona County High assistant principal and activities director Larry Meeboer will also finish his time in the district on June 30. So will Rene Rickabaugh, the principal at Bar Nunn Elementary. Frank Martin, the athletic trainer for NC, will depart on Sept. 1.
At the district level, Dennis Bay — the business service executive director who oversaw the district’s recent construction efforts — will leave in August. Fellow cabinet member Rick Skatula, the school improvement executive director, will leave at the end of June.
In all, at least 67 employees will leave over the next 12 months. The vast majority will be gone by the end of June.
There were 371 people employed at the district level on Oct. 1, 2014, before the eliminations began in earnest.
The district will evaluate which of those 67 positions it will hire for and which it will eliminate. Hopkins said he is already planning to rehire for Bay and Skatula’s administrative positions. But the rest, along with the other 171 employees who’ve said they’ll leave between now and 2020, will be decided on a case-by-case basis.
Hopkins said that officials had started eliminating positions at the district level first. But he said the district is “pretty thin,” and that the reason they were hiring to replace Bay and Skatula is because leaders thought they were vital positions.
He told board members that the number of positions eliminated has skewed, percentage wise, toward the district. With the school closures and the number of people who’ve said they plan on leaving, that number will likely even out, with more spots axed on the school side.
The number of positions eliminated includes the principals of the four schools that the school board voted to close in October. However, the people who were the principals will likely remain with the district.
But the numbers don’t include any other positions that may be eliminated as part of those school closures. It’s too early to tell which positions those might be, but it’s likely that there will be some.
Officials have cut more than $4 million and know they’ll need to cut at least that much in each of the next two years.
But there’s also a chance that number could grow. Lawmakers have advanced a bill to cut more than $16 million from schools statewide, which district officials here say will cost Natrona County an additional $2 million. That doesn’t include any other cuts the Legislature may consider during the session, nor does it take into account whether lawmakers change the funding model altogether, which could mean funding climbs or dives — or stays the same.
Deciding the future of three city-owned buildings in downtown Casper shouldn’t be viewed as a dilemma, said Urban Bottle owner Lynette Boatright.
“It’s an opportunity,” she explained.
Boatright was speaking at a Tuesday afternoon meeting she organized between local residents and business owners and the Downtown Development Authority to discuss potential uses for the buildings.
The development authority is part of a group which recently told Casper City Council the land in question is the best site to develop an approximately $70 million hotel and conference center because of its central location.
But the Council had already advertised those buildings for sale, and three local entrepreneurs hoping to bring a bakery, an apparel company and new apartments to the downtown area submitted their proposals in October. The buildings, which are located on Ash Street north of Midwest Avenue, include the former Ka-Lark’s gymnastics studio, the former Milo’s Toyota body shop and a former livery stable.
Kevin Hawley, the development authority’s CEO, told the crowd Tuesday that he doesn’t like controversy, but is speaking out because the city’s future is at stake.
A hotel and conference center could bring more people to Casper and significantly increase downtown’s foot traffic, whereas the proposed new businesses will not likely draw overnight visitors to the city, he explained.
“My fear is we are going to plateau,” said Hawley.
But developing a hotel and conference center at this site would involve knocking down the buildings, which the Casper Historic Preservation Commission is against.
“We as a commission want to make sure to preserve and protect our historic buildings,” said the commission’s chairman Connie Thompson, adding that the hotel can be built at another site.
One attendee said he thought the structures were an eyesore and did not see the value in preserving buildings just because they are old.
Another audience member suggested placing pause on the entire process so community members could have more time to weigh both sides.
Hawley was also supportive of placing the process on hold. He said selling off the buildings now is unwise because they are located near the David Street Station, a public plaza that opened in August.
The complex currently offers an outdoor stage and recreational spaces, but will be expanding next year to include a splash pad and seasonal ice skating rink. Given that the plaza recently opened and is not yet complete, Hawley said it’s difficult to currently determine the value of the Ash Street buildings.
But two of the entrepreneurs who bid on the buildings two months ago told the crowd they need Council to make a decision.
Scott Cotton, a co-owner of 1890 Inc., hoped to purchase the former Ka-Larks gymnastics studio because his custom apparel store needs more space to meet customer demands. Planning to purchase a new building has taken time and effort away from his current business, he said.
“We just need an answer,” he remarked.
A public hearing on the issue has been slated for Dec. 19.
The conference group includes representatives from the Casper Area Convention and Visitors Bureau, the Amoco Reuse Agreement Joint Powers Board, the Downtown Development Authority and the Economic Development Joint Powers Board/Forward Casper.
The group will be discussing the hotel’s economic feasibility at a City Council work session Tuesday night.