State money would not be used to give local gov’t raises
Date posted: January 3, 2014
SHERIDAN — Wyoming’s city and county governments recently called on the Legislature to accept Gov. Matt Mead’s request for local government funding in the next biennium, which will be considered in the upcoming legislative budget session to begin Feb. 10.
Mead’s $175 million request is $20 million more than was granted to local governments in the 2013-2014 biennium budget and supplemental budget combined.
It will bring total state funding for Wyoming’s local governments for the 2015-2016 biennium to $105 million for direct distribution, which is used for operations, and $70 million for the county consensus block grant, which is split between counties and cities and must be used for capital improvement projects.
The projected increase will add $16 million to consensus funds and $4 million to direct distributions.
When $10 million per year is dispersed among Wyoming’s 23 counties, it doesn’t add up to a substantial increase for Sheridan County and its incorporated cities, but local officials say it will help with operation costs and capital improvement projects.
“When you shake it through the system, you have to throw a lot of money in to see a little change at the local level. Yes, it makes a big difference, but it doesn’t go quite as far as you would think,” Sheridan Clerk Scott Badley said.
The Wyoming County Commissioners Association and the Wyoming Association of Municipalities sent a letter to the co-chairs of the Joint Appropriations Committee on Dec. 23 expressing full support of Mead’s recommendation for local government funding. WCCA President Bob Rolston, a Sheridan county commissioner, said the money will be used to support essential government services.
“Of course, the Legislature takes any of those recommendations from the governor and there can be a rearranging of money, but it’s been pretty consistent,” Rolston said. “In the past couple years, WAM and WCCA have been at the table on several issues that make our success rate better. It’s better to complement each other rather than fight.”
The letter to the Joint Appropriations Committee stated WAM and WCCA support Mead’s recommended split of 60 percent for operations and 40 percent for capital projects and urged the committee to not shy away from providing state funds for local government operating expenses.
“…we recognize the Legislature’s historic concern regarding expending state funds for operating expenses. However, we ask you to be mindful of the fact that counties and municipalities face similar operating and staffing challenges as the state,” the letter said.
Mead has recommended a 2-2.5 percent raise for state employees in the 2015-2016 budget. However, in 2013 the Legislature added a footnote to the budget that said state funds could only be used by cities and counties for one-time needs and not to give raises or hire additional staff. In 2014, the footnote was “softened,” Badley said, to allow for ongoing expenses like utilities but not for salaries.
Both Badley and County Administrative Director Renee Obermueller said local governments would like to give raises to employees, but that the slight bump in state funds could not be used to do so, especially since state funds are not guaranteed and can be pulled.
“Seventy-five percent or more of our budgets are people. It’s hard to operate without people,” Obermueller said.
In the 2013-2014 biennium, Sheridan County received $2.85 million in consensus funding, which was split between the County, the city of Sheridan and the towns of Ranchester, Dayton and Clearmont. With the recommended increase, that figure could increase by almost $1 million up to $3.9 million, Obermueller said.
Consensus block grant money must be used for capital improvement projects. Badley said it is often used as matches for grants to leverage as much funding as possible.
Direct distributions for the county in the previous biennium were $1,211,865, or nearly $606,000 per year. Mead’s recommended funding would add $358,000 for approximately $179,000 more per year, Obermueller said.
For the city, direct distribution was $981,602 in fiscal year 2013 and was increased to $1.45 million in fiscal year 2014. If Mead’s recommended budget passes, the city will receive approximately $1.3 million for fiscal year 2015, which is down approximately $150,000 from 2014 but is an overall increase if the amount remains the same in fiscal year 2016.
Mayor Dave Kinskey said there are several items that could impact the city financially in the future, some of which will be decided by the Legislature soon. He said the city will keep a close watch on how the legislative budget session develops.
“The other thing that is looming very large on the horizon in terms of our fiscal picture is the continuing public employee pension crisis, which dogs all governments, local and state and nationally,” Kinskey said. “Wyoming is not immune from that.”
At this point, the firefighter pension plan A, which covers firefighters employed before 1981, is underfunded 34 percent, Badley said. The Legislature will discuss how to get the plan fully funded, which will likely involve the city paying $120,000-$300,000 per year into the fund through 2023. Other pension plans are also underfunded and need to be addressed.
Furthermore, Badley said, health insurance costs increase about 11 percent per year. The city also continues to pay approximately $151,000 per year back to the state to repay sales and use tax funds that were improperly credited to Sheridan County in 2006-2007.
The funds should have gone to Johnson County. Unfortunately, Badley said, the total of $800,000 is money that has already been spent, so repayment is putting a dent in the city’s finances.