CHEYENNE — While Wyoming has a $1.55 billion emergency savings fund, there are no rules dictating when to spend that money, how to spend it or how much of it should be spent.
Rep. Mike Madden, R-Buffalo, hopes to change that.
Madden is proposing legislation that would bar lawmakers from covering more than half of any budget shortfall by using reserve funds.
“My big fear is we’ve got so many freshmen here that will take the attitude, ‘Let’s just spend it all right now,” said Madden, who chairs the House revenue committee.
The Legislature has 24 new members this session, the highest number in recent years.
If House Joint Resolution 6 — which Madden said still needs to be amended — passes, not only could no more than 50 percent of a budget shortfall be covered with rainy-day funds but no more than 25 percent of the total savings fund could be spent in a given budget cycle.
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“The rest of the shortfall needs to be reconciled with either increases in taxes or decreases in spending,” Madden said.
Madden said Wyoming was one of only two states without protocols governing how to spend savings. He based the 50 percent and 25 percent numbers off the rules in other states, taking into account Wyoming’s unique needs.
Wyoming’s education department is facing a $400 million annual deficit, and House Speaker Steve Harshman, R-Casper, has said that the state’s reserves have helped buy time for the Legislature to address the funding issue.
Harshman said that half of the state savings spent in recent years has gone to pay for education.
The budget crisis results from falling energy prices over the last two years that have led to a sharp reduction in tax revenue. Because Wyoming has no personal or corporate income tax, about 70 percent of the state’s revenue comes from mineral severance tax, royalty payments and sales tax generated by purchases of heavy mining equipment.
Some, including Senate Minority Leader Chris Rothfuss, D-Laramie, have called for restructuring the tax code to make Wyoming less dependent on the energy booms and busts.
Republican legislative leadership has been more reluctant to consider raising taxes.
“I’m not in favor of corporate or personal income tax,” Senate President Eli Bebout, R-Riverton, said this week. “It would be very difficult to do.”
Bebout and Harshman want to see more spending cuts before the Legislature looks at new taxes, but both said nothing could be taken off the table when it comes to fixing the budget deficit.
Gov. Matt Mead has said he finds it hard to justify tax increases or spending cuts while the state continues to sit on $1.5 billion in savings.
Madden praised the governor for calling on the Legislature to use the rainy day fund responsibly in his State of the State address Wednesday. But he had little patience for the attitude that more savings must be spent before spending is cut or taxes are raised.
“That’s irresponsible,” he said. “If you’re running for office you might want to say that kind of thing, but if you’re acting responsibly around this legislative body, you’re not saying that.”
Star-Tribune staff writer Seth Klamann contributed to this article.
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