Legislative Summary Final Report March 12, 2008

Transcription

1 WYOMING TAXPAYERS ASSOCIATION ACTION ALERT Legislative Summary Final Report March 12, 2008 The 2008 budget session of the 59th Wyoming Legislature ended with a budget that many lauded to be fair and reasonable. In fact, one legislator from Glenrock, Senator Jim Anderson, called this budget session, the Goldilocks Session where lawmakers didn t over-spend, or under-fund, but everyone came out just right. Indeed, the result of this session s deliberations seemed to be more fiscally responsible than the trend we ve seen over the last few years we have a budget that adequately funds state agencies, continues to build infrastructure, increases funding to local governments, and yet grants tax relief in a fair, and responsible manner. Overall, the work product was pretty remarkable, considering that there were sixteen bills introduced to offer some sort of property tax relief and less money on the table for discressionary spending than what s been available in recent years. Governor Freudenthal also said the bill was an accurate overall picture of the state finances, however did exercise his veto authority on three items: (1) deletion of a footnote that required only $100 M of the $200 M GF appropriation for WYDOT to come back in the standard budget for the next biennium; (2) Grandparent Foster Fund maintain the budget, but delete the portion that would limit it to one time funding; and (3) deletion of funding of additional offices for the Wyoming Business Council. In sum, the biennial budget totals $7.8B. Of that, $3.44B is for the General Fund, $3.1B in other State funds, and $1.3B is Federal funding. The type 3 budget has experienced steady growth over the last ten years, with significant increases over the last five or six years. Type 3 Funds include all discretionary revenue that is deposited into the General Fund or other funds and accounts traditionally used to support the general operations of Wyoming state government. Total Type 3 Funds for the biennium totaled $3.6B, a 44.5% increase from the previous biennium of $2.5B for Initially, the $3.44B of GF budget for the biennium is decreased from the last biennium, but remember, a supplemental budget will come in next session and inflate those numbers. WTA has long been concerned about the growth in government, particularly in recent years. This session finally brought open discussions about similar concerns and possible work in the interim to curb spending and take a more comprehensive look at the budgeting process. A great illustration of how much our spending has increased can be found when one considers the income from the PMTF that goes into the GF. During the biennium, PMTF income amounted to 17.4% of Type 3 Funds. Today, that number hovers around 6.1%. Astonishing numbers, especially when you consider how much the PMTF has grown over the last 13 years. It is expected that the state may see more revenues rolling in from natural gas next year. We are now at a point where state agencies, while perhaps not getting all of the funding requests they make, have not experienced budget cuts. Spending in education is top in the country. Yet is it sustainable? Are we getting our bang for our buck so to speak? Funding to local governments has increased from $41.5M in FY to more than $400M in this biennium. All very real concerns as we head into the next interim study. WTA encourages policy makers to use this interim to begin talking about a sustainable and comprehensive spending/taxing policy. Interim Topics Interim topics for all committees can be found at the following link: Areas of interest for WTA include the Joint Appropriations study of improving the budget process, developing criteria for AML funding, and a joint meeting with the Revenue Committee to discuss trending in revenues and expenditures. Joint Revenue will tackle: Mineral taxation issues; Coal and helium natural gas valuation Excise taxation issues, including tobacco tax (cigarette versus tobacco products taxes), vendor collection fees, non-highway use of fuel (agriculture gas tax credit vs. refund), ethanol sunset date for tax credit, and the imposition of a statewide lodging tax

2 Misc. taxation issues, including property tax refunds/credits and consolidation of administration of the various property tax refunds/credit programs Joint meeting with JAC as mentioned above. Other interim topics of interest include: Joint Education o Community College Task Force Joint Transportation o Commercial vehicle fees o Interstate 80 issues o WYDOT funding Budget Summary Including Major Bills Below is a summary of major funding: Savings $27.7 M additional to the LSRA transferred from the Budget Reserve Account for a total of $353,071,900 PMTF is still on track to exceed goal of $4.0 B by 2010 (in fact, projected to exceed $4B in 2009) o Revenue flows into the PMTF for the biennium will be approximately $792.2M For more on the Wildlife Trust Fund, see below: Education $1.4B in School Foundation funds for K-12. This includes the 4.3% cost adjustment and maintains a $100M balance in the SFP at the end of the biennium. School Facilities Commission gets $357.4M for capital construction $84M is directed for major maintenance for schools Diversion of additional $50M in Federal Mineral Royalties for the Hathaway Fund. Hathaway is on track to be fully funded at $400M by April of this year. Local Government Funding Total appropriations for the biennium $350 M ($383.4M including capcon of $33.4M) A compromise was reached in the budget conference committee that essentially splits the difference between the House position and the Senate position. Of the $350 M: State Land and Investment Board $170 M to be allocated yearly: o Direct distribution for cities and towns $46.2 M ($50.3 total/year) o Direct distribution for counties $20 M/year (24.1M total/year total) o Revenue challenged cities and towns $4.1 M o Revenue challenged counties $4.1 M o County block distribution for capital projects $95.5 M o Food tax lost revenue $20 M (included in the above) This money will be allocated monthly over the 24 month period according to historical data on distributions made to local governments from sales and use tax revenues from sales of food for domestic home consumption, or based upon the industry average calculated by DOR, whichever is greater. o GF appropriation to SLIB for emergency capital project grants for local governments in the amount of $10 M for the biennium. Of the local government capital construction appropriation $33.4 M may be used for grants to local governments for unfunded or partially funded large capital construction projects o Of that appropriation, $1 M may be awarded by SLIB for the purpose of providing grants to local governments for investment grade energy audits of buildings and operations.

3 Department of Transportation GF direct appropriation of $200 M to WYDOT for road construction and maintenance (as noted earlier, the footnote requiring only $100 M to return in the agency s standard budget request was vetoed by the Governor) $12.03 M for WyoLink $13.5 M for Airport improvements Wyoming Business Council $79M for Business Ready Communities $15M for Community Facilities Program The WBC lost funding for additional regional offices with the Governor s veto. Wildlife Trust Fund and Open Spaces The Wyoming Wildlife Trust Challenge Account was continued. $5M for projects for the Wildlife Trust Fund $29.5M to increase the WLTF to $87.5M University of Wyoming Capital Construction (requires matching funds from UW) o Kendall House IENR $1.1M o Engineering Labs $2.0M o Law School Moot Court $2.25M o School of Energy Resources Facility $20M o International Center $1.75M o Other Lab Facilities $6.25M o Natural History Center $10.0M o College of Business $54.2M o Classrooms and labs $3.0M $376M for operating budget Capital Construction $10M for the Capitol Complex Construction Acct. $10M for State lab construction acct. $9M for Military airfield upgrade $2.4M to state parks for facilities $3.7M to state parks for road deficiencies $14.5M for Game and Fish Cheyenne headquarters $652,468 for the Cheyenne tourism welcome center Water $10 M appropriated from the BRA for Water II $24.5 M from the BRA to Water III $6.8M in the Omnibus Water Bill Planning Program $30.9M for Omnibus Water Bill Construction Program Agency Positions No new hires may be made unless to fill a vacancy within the authorized number of positions in the standard budget, unless authorized by the Governor. Wyoming Pipeline Authority/Wyoming Infrastructure Authority $1.4 M loaned from the GF for operating expenses of the Wyoming Pipeline Authority $1.7 M loaned from the GF for operating expenses of the Wyoming Infrastructure Authority

4 AML and New Energy Technologies $29.91 M for abandoned coal mine reclamation $89,869 for the operation of the subsidence insurance program $1,223,866 for evaluation of potential carbon dioxide sequestration sites and activities related to the advancement of clean coal management activities. $10M to Carbon County for county road and bridge construction needed for coal-to-liquids conversion facility $17.4M for UW School of Energy Resources for the advancement of Energy Resources $20M for UW for development, construction and operation of high plains gasification facility and technology center (GE project). $3.8M for clean coal technology research to be expended pursuant to last year s session. $1.8M from the clean coal research account to fund projects that were recommended by the clean coal research committee as provided under 2007 Wyoming Session Laws (projects are specifically listed in the budget bill) $2.5M GF to a separate account for clean coal technology research $4.5M from DEQ s unencumbered and unobligated mine land program funds for the Bitter Creed clean up project in Rock Springs. Carryover Appropriations Unexpended unobligated monies appropriated for the following programs are appropriated to the following departments, respectively: colorectal cancer, school infrastructure appropriation, and University of Wyoming School of Energy Resources to the Department of Health s colorectal cancer program, the School Facilities Commission, and the Wyoming School of Energy Resources. Supreme Court/District Courts The Supreme Court and all district courts shall submit supplemental budget requests no later than November 1, 2008, and biennial budget requests no later than November 1, 2009, and shall prepare all 100 series personal services budget requests the same as the executive branch. Major Maintenance $54.8 M to be allocated accordingly: o 42.41% to the Department of Administration for state facilities managed by the State Building Commission o 35.95% to UW, excludes student housing, the student union and auxiliary service areas o 21.64% to the Wyoming Community College Commission for district facilities. Employee Benefits/Retirees $6.7 M GF for executive, legislative and judicial branch agency retirees, including UW and the community colleges. Creation of the retiree health insurance benefits account. $100,00 GF to the State Auditor for an independent review of the principles the retirement board has adopted with respect to the methods used in recognizing gains and losses as well as actuarial liabilities and assets. 4% COLA for all state employees Department of Health $20 M from the BRA to the State Treasurer to provide a reserve for the state s share of all Medicaid programs. $4.2 M from the BRA for purchasing pandemic flu vaccines and antiviral medications. The appropriations shall only be expended if it is determined that DOH has insufficient funds available. $234.7M for mental health and substance abuse appropriations

5 Tax Relief Of the $5.5 M appropriated to the Treasurer s Office to run the Veteran s Tax Exemption, $900,000 is effective immediately to take care of the influx of applications from last year s increase in benefits. HB92 Property Tax Refund Program extends the property tax relief program that expired in January. Does not have age requirements and broadens the income specifications so more people will be able to apply. The income requirement was raised to two-thirds of the median income of the county or the state, which is an average of $32,000. Maximum allowable refund is one-half of the homeowner s property taxes for the previous year. Homeowners must live in the state for five years. Each member of a household may hold assets totaling $50,000. HB151 Tax Relief Program Amendments applies to low-income people over 65 years of age or totally disabled people of any age and offers relief for sales taxes, property taxes and motor vehicle fees. Single people must have an income of less than $17,500 annually, and married couples, $28,000 annually. Community Colleges Of the $5.6 M GF appropriation for public television, $1.5 M shall be deposited into the Wyoming Public Television Endowment Account. $4 M GF to the State Treasurer for deposit into the Community College Endowment Challenge Fund. Creation of a Community College Planning Task Force. $135,000 appropriated from the GF. $79.8M for approval to build residence halls. Footnote that does not allow funds to be used for major maintenance. $243M for operations Miscellaneous $30,000 GF for reimbursement of incidental expenses incurred by the top five elected officials. The natural resource staff of the Governor s Office shall perform a NEPA review. Bridge loan to UW from the Wyoming Permanent Land Fund Account in the amount of $4.3M to proceed with construction of athletics facilities previously approved by the Legislature. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ A special thank you to Union Pacific for allowing WTA use of their conference room for our weekly legislative meetings.