It certainly wasn't good news Monday when state officials announced revenue projections that indicated an additional $383 million drop for the 2011-12 biennium.

But it's not devastating for state government, either, thanks to some of the decisions Wyoming has made in recent years. What it means, as Gov. Dave Freudenthal noted, is that the state must continue to be careful about how it allocates money.

"We all have to get used to the idea that our high funding expectations are a thing of the past and that money is going to be tight," the governor said after the Consensus Revenue Estimating Group released its report.

It's a far cry from 2005, when lawmakers came to Cheyenne with a projected state budget surplus of $1.2 billion, thanks largely to booming mineral production and prices. The focus that year was on spending the state's additional money wisely, so Wyoming could weather any lean years ahead.

It turns out that the Legislature did a fairly good job of making decisions when it had money that will help state government during its economic recession, which is just now hitting Wyoming as hard as many other states were impacted last year.

Nearly five years ago, lawmakers invested heavily in public education, both K-12 and higher education. School districts were able to raise their teacher salaries to a competitive level, and new school construction was approved. Meanwhile, the University of Wyoming launched an unprecedented series of capital construction projects on campus. The Legislature also created endowments for UW and community colleges that could boost private donations.

Lawmakers also paid off the outstanding bond debt on the men's prison in Rawlins and began planning for a new state prison in Torrington. That facility has been built and is almost ready to open.

They tucked away additional money into the Permanent Mineral Trust Fund, the interest income of which goes to state government operations. Millions more were put into spending policy reserve accounts.

These investments in public education, infrastructure and savings might have been even greater if legislators could have known exactly what was ahead for their future counterparts. Still, the use of the funds took care of some problems that now won't have to be addressed in the immediate future.

Freudenthal took the right step earlier this year when he ordered state agencies and UW to cut their budgets by 10 percent. That saved $198 million, which is available for transfer to the Legislative Stabilization Reserve Account. The governor, however, said he does not support dipping into that fund, which is wise, considering that it may be several years before the state's revenue stream recovers.

Sen. Phil Nicholas, R-Laramie, co-chairman of the Joint Appropriations Committee, said there appears to be enough money available to pay for the standard budget. He also noted that natural gas prices have held, even though sales were less than optimal because the state lacks pipeline capacity.

Nicholas warned that there won't be money available to build highways and help cities, towns and counties at current spending levels. New programs will have to be placed on the back burner.

But things could be much worse. No major layoffs or cutbacks appear imminent.

When the governor and legislators craft the next biennium budget, they will face a much tougher challenge than they had five years ago: providing essential services while still saving enough money to help us in the future. They have their work cut out for them.