Long tasked with making money for the state, Gov. Mark Gordon now finds himself with a different responsibility: deciding how to spend it.
The state’s former treasurer recently took his first step toward his inaugural budget as governor, issuing a letter offering guidance to the state’s elected officials and agency directors to create what his office characterized as a “true two-year budget.”
That, Gordon said, means no supplemental budget requests beyond emergency funding, and a general mindfulness for cost savings that the governor hopes can stave off the need for additional cuts to an already slim state government.
“As you prepare your agency’s budget, I ask you to look broadly and deeply when considering what your agency requires to better help serve the people of Wyoming,” Gordon wrote in a letter last week to agency heads. “With a tight revenue stream, not all needs will be funded, so that is why I am asking you to prioritize those needs and to look for efficiencies to minimize the impact should cuts need to be taken.”
The letter – just under two pages long – emphasizes a fiscally conservative and cautious approach to a budget that, just several years ago, was slashed by hundreds of millions of dollars after a downturn in Wyoming’s energy industry ate into the state’s revenue.
Gordon’s budget will be released in November, along with a website offering an explanation of the budget and what it contains.
The Wyoming Legislature will convene to consider the governor’s budget proposal in February.
A culture of cost consciousness
In an interview with the Star-Tribune shortly before inauguration day, Gordon emphasized his desire to instill a culture of cost consciousness throughout state government, and a want for agencies across the state to contemplate their operations and spending from the bottom up to reduce costs across the board.
“I think in government sometimes, you become so protective of your budget and circumstances that you focus too much on them,” Gordon said at the time. “I’d like to see us figure out how we can make our whole government function better and find those efficiencies for ourselves.”
That ethic was reflected in Gordon’s letter to agency heads earlier this week, which told officials to set priorities for their agencies should future budget cuts need to take pace and to “analyze tradeoffs that can be accomplished through efficiencies.”
Also of note: the assertion that no “clawbacks” – or budget requests to bring back funding lost during the austerity cuts of the past– would be accepted.
“We’re trying to emphasize that during the recent austerity cuts, there were significant impacts and we don’t want to have to fight for those items to be cut again, just because they were put back in,” Gordon spokesman Michael Pearlman wrote in an email to the Star-Tribune. “The Governor would prefer that agencies find efficiencies that allow them to meet their priorities, so they could deliver more with less funding.”
The governor did, however, request each agency provide his office a narrative of their current operations, including details on their office structure, their efficiencies, and challenges and risks that ultimately correlate with the department’s budget request, according to guiding documents provided to the Star-Tribune.
These narratives, Pearlman said, are intended to “be a conversation with citizens,” with a goal of making it easier for the general public to understand the budgeting process, as well as helping to build a better understanding behind each agency’s request for the budget’s architects.
“In the past, these narratives tended to be written by and for insiders,” Pearlman wrote. “In addition, the hope was to allow agency heads to think broadly about the specific challenges each agency is facing and the successes it has had, and give them an opportunity to highlight those issues and points of emphasis for the entire audience – the Governor, legislature and citizens.”
It is too early to glean what ultimate impact the governor’s ethic of efficiency will have on the state’s bottom line, Pearlman said, particularly well before the relevant revenue projections from the state’s Consensus Revenue Estimating Group that are needed to build a 2021-2022 budget have been set.
Revenues are anticipated to be an issue heading into this year’s budget session. After a session of failures, the state’s Joint Committee on Revenue is still struggling to come up with solutions to diversify the state’s finances from oil, gas and coal, while the state’s reliance on federal funds – and the extractives industry – continue to be a liability to the state’s long-term fiscal stability.
This is something clearly weighing on the minds of policymakers heading into the summer, with the governor asking agencies to not only describe what consequences budget cuts would have on their departments, but emphasizing that any requests for ongoing funding will be “looked at closely” prior to recommendation in his budget.
“The Governor’s expectation is that agency heads be wise about ongoing costs and be diligent about placing into any budget ongoing costs and general fund items,” Pearlman wrote. “If the state enters another downturn and cuts are required, they’re going to have to be program cuts vs. across the board cuts. The state wants to avoid having to go through the 2016 austerity cuts again.”