Joint Appropriations Committee Minutes

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Joint Appropriations Committee Minutes SUMMARY of P ROCEEDINGS JOINT APPROPRIATIONS COMMITTEE COMMITTEE MEETING INFORMATION June 21 and 22, 2016 Jonah Business Center, Room L55 Cheyenne, Wyoming COMMITTEE MEMBERS PRESENT Senator Tony Ross, Co-Chairman Representative Steve Harshman, Co-Chairman Senator Bruce Burns Senator John Hastert Senator Jeff Wasserburger Representative Donald Burkhart, Jr. Representative Cathy Connolly Representative Mike Greear Representative Glenn Moniz Representative Bob Nicholas COMMITTEE MEMBERS ABSENT Senator Drew Perkins Representative Tim Stubson LEGISLATIVE SERVICE OFFICE STAFF Don Richards, Budget & Fiscal Administrator Dawn Williams, Senior Fiscal Analyst Dean Temte, Senior Fiscal Analyst Matt Sackett, Senior Fiscal Analyst Matt Willmarth, School Finance Analyst Dave Gruver, Director Matt Obrecht, Legislative Counsel OTHERS PRESENT AT MEETING Please refer to Appendix 1A to review the Committee Sign-in Sheets for a list of other individuals who attended the meeting. The Committee Meeting Summary of Proceedings (meeting minutes) is prepared by the Legislative Service Office (LSO) and is the official record of the proceedings of a legislative committee meeting. This document does not represent a transcript of the meeting; it is a digest of the meeting and provides a record of official actions taken by the Committee. All meeting materials and handouts provided to the Committee by the Legislative Service Office, public officials, lobbyists, and the public are on file at the Legislative Service Office and are part of the official record of the meeting. An index of these materials is provided at the end of this document. For more information or to review meeting materials, please contact the Legislative Service Office at (307) 777-7881 or by e-mail at [email protected] The Summary of Proceedings for each legislative committee meeting can be found on the Wyoming Legislature’s website at http://legisweb.state.wy.us. PAGE 2 OF 9 EXECUTIVE SUMMARY The Joint Appropriations Committee met for two days in Cheyenne. On the first day, the Committee received a summary of the Governor’s budget reductions for the executive branch and heard from the Governor and several affected agencies. On the second day, the Committee received a revenue update and addressed interim topics, including: codification of provisions in the general appropriations bill; state employee health insurance benefits; update of state accounts; severance tax and federal mineral royalty distributions primer; and community college funding. The Committee was also given an explanation of the exercise of the Governor’s budget reduction authority under 2016 Session Laws, Ch. 31, Section 323, 2016 Session Laws, Ch. 118 and other existing law. CALL TO ORDER (JUNE 21, 2016) Co-Chairman Ross called the meeting to order at 8:00 a.m. The following sections summarize the committee proceedings by topic. Please refer to Appendix 1B to review the committee meeting agenda. GOVERNOR’S BUDGET REDUCTIONS Governor Mead presented his 2017-2018 biennium budget reductions to the Committee (Appendix 2). Governor Mead explained that the state could face shortfalls of $240 - $510 million for the ensuing biennium; as a result budget reductions of $248 million, or eight and six tenths percent (8.6%) of the total 2017-2018 general fund standard budget, will be implemented effective July 1, 2016, barring a Legislative special session. The bulk of the cuts occur in five agencies that receive 72% of total general fund appropriations: Departments of Health, Family Services and Corrections; the University of Wyoming; and community colleges. Governor Mead stated that the budget reductions are structured to minimize the loss of federal funds that require a general fund match. The eight and six tenths percent (8.6%) cuts were not applied across-the-board to ensure the least interruption of state services. The executive branch estimates that 677 private sector jobs will be lost as a result of Department of Health cuts. Governor Mead also recommended that construction at the Wyoming Medium Correctional Institution in Torrington and the state office building in Casper be suspended and that the Legislature consider more modifications to capital construction appropriations during its 2017 General Session. DEPARTMENT OF HEALTH Tom Forslund, Director of the Department of Health, addressed the budget reductions to be made by his agency, which total $90 million general funds (9.23%) and result in a loss of $43.4 million in matching federal funds. Approximately ten percent (10%) of the department budget is personnel costs, while the remaining ninety percent (90%) is passed through to providers. The agency eliminated 27 positions and reviewed its proposed cuts with the Joint Labor, Health and Social Services Committee before final decisions were made (Appendix 3). STATE TREASURER Mark Gordon, State Treasurer and Pat Arp, Deputy State Treasurer, presented their agency budget reductions. Treasurer Gordon stressed staffing concerns and lack of current technology as primary challenges faced by his office. As a result, no reductions were made to the personnel budget. The eight percent (8%) reductions made by the State Treasurer amount to $330,000 and do not apply to the Veterans’ Tax Exemption or the Indian Vehicle Tax Exemption programs because those funds flow to local governments and do not relate to operations of the Treasurer’s office. Cuts were achieved primarily by eliminating temporary staffing and reduced contract services. Statewide revenue enhancements are being garnered from an examination of investment managers resulting in reduced fees by managing some assets in-house and by reassigning assets to companies with strong historic returns and more competitive fees. JOINT APPROPRIATIONS COMMITTEE Summary of Proceedings WYOMING LEGISLATIVE SERVICE OFFICE • 213 State Capitol • Cheyenne, Wyoming 82002 TELEPHONE (307) 777-7881 • FAX 307-777-5466 • E-MAIL [email protected] • WEB SITE http://legisweb.state.wy.us PAGE 3 OF 9 UNIVERSITY OF WYOMING Laurie Nichols, President of the University of Wyoming and Bill Mai, Vice-President for Administration guided the Committee through the budget reductions to be imposed at the university (Appendix 4). The university’s reduction target was $35 million. Permanent budget cuts to be enacted in fiscal year 2017 are $19,300,100, while one-time savings will be $6,550,000 for a total of $25,850,100. Fiscal year 2018 reductions will be determined by committee through an academic program review process, and the university will endeavor to create a longer term fiscal plan. DEPARTMENT OF CORRECTIONS Bob Lampert, Director of the Department of Corrections and Steve Lindley, Deputy Director offered their agency’s proposed reductions and the resulting anticipated consequences to programs. Primarily, the agency will de-fund 125 vacant positions. Substance abuse treatment beds will go from 248 to 174 for males and 55 to 32 for females; 100 outpatient beds in Casper will remain available. COMMUNITY COLLEGE COMMISSION Dr. Jim Rose, Director of the Wyoming Community College Commission (WCCC) and Matt Petry, Deputy Director reviewed their budget reduction priority list, which is dominated by reductions in the community college state aid line item. It is estimated that more than 174 positions (of which 130 are part- time) across the colleges will be eliminated. DEPARTMENT OF FAMILY SERVICES Steve Corsi, Director of the Department of Family Services and Nick Baird, Chief Fiscal Officer presented a summary of budget reductions, which will be taken from myriad programs in the agency through a combination of reduced or eliminated services through contract diminutions and additional utilization of federal funds. GAME AND FISH DEPARTMENT Scott Talbott, Director of the Wyoming Game and Fish Department and John Kennedy, Deputy Director spoke to the reductions to be taken by their agency. There are five generally funded programs in the Game and Fish Department, however, the entire amount of the eight percent (8%) required budget reduction is proposed to be made from the Wolf Management program, which amounts to $902,745. SECRETARY OF STATE Karen Wheeler, Deputy Secretary of State and Kendra Hererra, Fiscal Officer discussed the budget reductions proposed by the Secretary of State’s Office. The Office budget is chiefly administrative and is driven by statutory obligations. Accordingly, many of the recommendations require statutory change, including certified notice requirements and printing requirements. STATE AUDITOR Cynthia Cloud, State Auditor and Sandy Urbanek, Deputy State Auditor presented an overview of budget cuts and their anticipated effects on operations of the State Auditor’s office (Appendix 5). The Auditor expressed concerns that the reductions will create shortfalls that will adversely affect her ability to execute the duties of her office. SUPERINTENDENT OF PUBLIC INSTRUCTION Dicky Shanor, Deputy Director and Trent Carroll, Finance Manager led the committee through the department’s proposed budget decreases for the Department of Education. While some programs and JOINT APPROPRIATIONS COMMITTEE Summary of Proceedings WYOMING LEGISLATIVE SERVICE OFFICE • 213 State Capitol • Cheyenne, Wyoming 82002 TELEPHONE (307) 777-7881 • FAX 307-777-5466 • E-MAIL [email protected] • WEB SITE http://legisweb.state.wy.us PAGE 4 OF 9 associated positions have been eliminated, existing employees have been reassigned to different positions within the department. The budget reduction plan includes a seventy-four percent (74%) reduction
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