CHEYENNE -- Cities, towns and counties will have better seats at the state spending table next year because of action Wednesday by a special legislative committee.

The Select Committee on Local Government Financing voted to recommend the budgets for cities and counties be included in the governor's budget requests and receive the same consideration as state government agencies.

The committee also recommended that the locals' budgets get higher priority in spending decisions and be eligible for cost-of-living adjustments like the public schools receive.

But the committee backed off making any changes in the distribution formula. The legislators recommended that the Joint Appropriations Committee look at last year's distribution formula.

"I have not heard a compelling reason to deviate from what the House and Senate came up with as a compromise," said Sen. Phil Nicholas, R-Laramie, the co-chairman of the Joint Appropriations Committee.

Sen. John Schiffer, R-Kaycee, said the key words in the select committee action make the local governments "on the same footing as state agencies."

As it stands now, the state agencies already have their budget requests in to the governor's office. For many years, the cities, towns and counties got what money was left over after the governor's budget was balanced.

Nicholas and other committee members spoke of the need to provide enough money to pay for basic services for all cities, towns and counties.

Lusk, for example, ought to be able to pay for employee health insurance, he said.

The Wyoming Association of Municipalities recommended a mineral revenue sharing plan that would give local governments 12.5 percent of severance tax, federal mineral royalties and some coal bonus payments the state receives.

The plan would allocate $423 million to the local governments for the 2011-2012 biennium.

Schiffer said the percentage commitment is "in essence earmarking. I use the word target."

He told Wyoming Association of Municipalities officials they need to put all the revenues received by cities and towns "on the table" if they want revenue earmarked for local governments.

There was no move in the committee to support WAM's plan.

Ten years ago the Legislature de-earmarked mineral revenues for local governments by capping the amount they could receive.

Before that action, legislative leaders complained that they had control over only a very small part of the budget because so much money was earmarked for local governments and other entities.

"I think there was reluctance, particularly among the Senate members, to return to that concept," Rep. Roy Cohee, R-Casper, said after the meeting.

Nicholas said the JAC will meet in November to consider the cost-of-living adjustment for public schools. The committee, he said, can expand that meeting to discuss the local government funding and hear from the governor's office, WAM and the Wyoming County Commissioners Association.

The select committee was re-created by the Legislature last winter. Its assignment is to investigate, develop and recommend a workable statutory formula for the distribution of revenues to cities and counties.

Schiffer said one of the goals of the committee was to find out the cost of local government.

"We couldn't do it," he said. "The cost is how much they can spend in one year."

Contact capital bureau reporter Joan Barron 307-632-1244 or joan.barron@trib.com