CHEYENNE, Wyoming — Wyoming Gov. Matt Mead urged state lawmakers Monday to determine how much money the state needs to have in its so-called rainy day fund and what conditions would ever justify spending from it.
Mead addressed members of the Joint Appropriations Committee at the State Capitol on Monday. He called on lawmakers to develop rules for how to manage the state's Legislative Stabilization Reserve Account, which now stands at about $2 billion.
Mead's remarks came as he presented his $156-million supplemental budget to lawmakers for consideration in the legislative session that starts next month. If lawmakers approved it, that funding would be in addition to the existing $3.5-billion, two-year general fund budget.
Mead is nearing the end of his first four-year term. During his tenure, the state's rainy day fund has more than doubled. He called on lawmakers at Monday's hearing to consider how to manage the fund.
"Is it exclusively for the state, or is it for the state and local governments?" Mead said. While he said the state has been fortunate, it needs to take a proactive look and determine how much should be in the fund and what are the parameters of its use.
Many Wyoming lawmakers have said they want to build the rainy day fund until it's large enough to cover a full two-year budget cycle for the state's general fund, currently $3.5 billion.
Sen. Eli Bebout, R-Riverton, is chairman of the Senate Appropriations Committee and served in the Wyoming House during the 1990s. He noted that he was one of only a few veteran lawmakers still around who experienced the tight budgets and low revenues of those years, when energy revenues were low.
Bebout said he looks forward to working on the question of how much money should be in the fund in the coming legislative session and afterward.
"I don't think we're prepared, at least I'm not, to say what the number should be now," Bebout said. "But I think during this session and certainly during the interim, we can come up with a good reason for what that number should be."
Mead told lawmakers that the state's financial health and hefty reserves are important assets as it works to recruit new businesses.
"What we don't want to do is we don't want to be what we see in Washington, D.C., where there's not only a lack of transparency, there's a lack of money," he said.
Mead said companies are leery of moving operations to a state that has a lot of debt out of fear that it will raise taxes.
However, Mead said it's also important to realize that the state government isn't a bank, and that it has an obligation to invest in communities and projects around the state. He said that investing state money in stocks and bonds means that the state is investing not only outside the state but often outside the country.
"I wanted to make sure that as we looked at this that we continued to have great savings, but we also continued to invest in those things that in some ways provide the best return on investment, that is infrastructure, our schools," Mead said. "Those things that pay a return, and also those things that build Wyoming for our children and our grandchildren."
Mead noted that oil prices are declining fast. The state had predicted oil prices at $107 a barrel in July but then cut its forecast to about $89 a barrel in October. He said oil was trading a few dollars below $60 a barrel on Monday with some experts predicting that prices would drop to $40 a barrel.
Every $5-per-barrel decline in oil prices costs Wyoming about $35 million a year, Mead said.
Mead's supplemental budget proposal seeks for $27.5 million for University of Wyoming projects, $25 million in local government funding, more than $21 million for highway improvements and $18.6 million for water projects. The Joint Appropriations Committee is set to hear state agency budget presentations through this week.