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Mead cuts another quarter-billion from budget

Jun 21, 2016 By Ben Neary, The Associated Press

Among the biggest losers in the reductions announced Tuesday are the the state's seven community colleges, the University of Wyoming, and the Wyoming Department of Health.

Wyoming Gov. Matt Mead said Tuesday that he would cut $248 million from state agency budgets over the coming two years because of falling energy revenue.

Mead told lawmakers in Cheyenne that the sharp declines require cutting the $3 billion state general fund budget that legislators approved earlier this year.

"Reductions of this magnitude are difficult, painful and have far-reaching consequences to both the private and the public sectors," Mead said. "There are no easy answers, and no easy process to address the situation."

Mead also warned that more cuts could be required because it's possible the revenue shortfall ultimately could exceed $500 million.

Wyoming has seen the loss of about 5,500 primary jobs in the oil, gas and coal industries over the past year and there could be further declines in energy sector employment, Alex Kean, administrator of the state's Economic Analysis Division, told members of the Legislature's Joint Appropriations Committee after the announcement by Mead.

Kean is co-chairman of the state Consensus Revenue Estimating Group, a panel of state financial experts who predict future revenues.

Mead warned state agencies in April to brace for the budget cuts after the group warned of falling revenue projections.

Mead's budget cuts would include laying off seven employees and removing scores of vacant positions from agency rolls. The layoffs would include three positions at the attorney general's office, three from University of Wyoming Medical Education and one from the Wyoming Department of Health.

Wyoming had 8,566 employees as of Dec. 31, not counting workers at UW or community colleges, the state has said.

The Wyoming Department of Health is the state's largest agency and faces $90 million in cuts from its $975 million state funds budget. Mead said those cuts will also result in the loss of $41 million in federal matching funds and likely the loss of 677 private-sector jobs.

Cuts to Health Department programs include $6.7 million from development and disability preschools, $4.6 million from behavioral health and $1.3 million in reduction to senior programs, Mead said.

Mead reminded members of the Legislature's Joint Appropriations Committee that lawmakers had rejected his recommendation to accept federal funds to expand the Medicaid program -- a move that would have offered insurance coverage to roughly 20,000 low-income adults.

State studies estimate that expanding the program would have saved the state about $30 million in the coming biennium by reducing pressure on other health programs.

"The cuts we make now are necessary. Had we expanded Medicaid, we would still be making cuts, but I believe the cuts would not be to the degree they are now," Mead said.

Many Wyoming legislators have said they oppose Medicaid expansion because they don't trust federal promises to continue to pay the bulk of program costs. The expansion is a key element of the federal Affordable Care Act.

Other agencies facing large cuts include the University of Wyoming, $35 million; community colleges, $20 million; Department of Corrections, $17.4 million; Department of Family Services, $13.9 million.

Mead said he's requiring delays on some planned state construction projects, including expansion of the state's medium-security prison in Torrington and a new state office building in Casper.

Wyoming has more than $1.5 billion in its rainy day fund, but Mead said state law prohibited him from accessing that money. He said that if lawmakers disagreed with his approach to budget cuts, they were welcome to convene a special legislative session and take a different approach.

State lawmakers have said they want to limit expenditures from the rainy day fund to about 10 percent a year to cover what some experts have predicted could be a decade-long downturn in energy markets.

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