Friday, December 1, 2017

The Governor's Budget: A First Glance

Yes, it is that time of the year again! Governor Mead has released his budget. 

We are going to get many opportunities to look at it, from all sorts of angles. For now, a first impression: Governor Mead is not living in the same state as we are. His attitudes toward the state budget, and toward the Wyoming economy, have nothing in common with the reality that families, small business owners and taxpayers experience around the state. 

The fact of the matter is that Mead just can't get back to spending our money fast enough. He is determined to restore every dime of spending cuts in every corner of the budget. Reports the Casper Star Tribune:
Many of the cuts to both social services, as well as other departments including agriculture and corrections, had been implemented for long enough to determine that they were hurting those agencies’ ability to deliver services, he said.
This attitude is present in his budget as well. In his letter to the legislature, accompanying the budget, he says:
Revenue forecasts have turned up and look better ahead. Now we need to continue to look for spending reductions as possible [sic], restore some areas of the budget that were overcut, provide funding for local governments which I ask for every year, support the ENDOW initiative going forward, allow for expansion of our outdoor recreation industry, and otherwise continue to invest in Wyoming - still our best investment.
After having made this statement, he also notes:
For the 2019-20 budget, I submit a standard budget $400 million less than the 2009-10 standard budget adopted in 208 - a decade ago.
That is nice, but frankly - what else should we have expected? I'm sorry, Governor Mead, but there are no medals of honor for Republican governors who cut spending when their state's economy is in free fall. The budget cut he boasts about equals a 12.1-percent cut. Well, from the third quarter of 2014 to the first quarter of 2016 - a period of only 18 months - private-sector economic activity here in Wyoming fell by 12.3 percent. 

In other words, like a teacher who explains algebra to a student so the student understands; like a police officer who apprehends a driver that just crashed into an apartment building; like an economist who points out the bad consequences of tax hikes; the governor only did his job. Period.

To be fair, Governor Mead was fiscally conservative in his first term, putting an end to Freudenthal-era spending. However, that, again, was only the responsible thing to do; it would almost have been dereliction of fiscal duties for the governor to continue spending as usual. 

If the governor wants a medal for brave spending cuts, he needs to sign a bill that introduces educational freedom, school choice and private funding into our K-12 education system. He needs to sign a bill that creates vouchers in our state's Medicaid system, and opens for the purchase of insurance plans from other states. 

If he wants to be a true fiscal conservative, he needs to lead, not follow. 

Sadly, Governor Mead is not a fiscal conservative. His budget is that of a traditional, mainstream welfare statist: he can't wait to restore spending on all sorts of government programs, oblivious to the fact that the private sector is smaller and less capable of carrying our big government than it was during the days when coal trains left the state at the same breathtaking speed as the gravy trains dumped their loot into the state coffers. 

To further drive home this point, the governor has a laundry list of spending hikes on unnecessary programs (listed by the Tribune):

  • Reinstate and increase funding for the Wyoming State Fair; $1 million over the next two years; the state fair should be an independent non-profit - or even for-profit - living solely on revenue from its activities. If it cannot make ends meet, it means people do not think it is worth their time and money.
  • Half a million dollars for brand inspection by the state livestock board; this is absolutely something that the private sector can do on its own. Ranchers can get together, set up standards and maintain a reliable branding system; at the other end of the food chain, so to speak, if consumers want brand-certified products, they can form watchdog groups and raise money for their own certification systems through non-profit donations and membership fees. Regardless of how the private sector goes about it, the solution will satisfactorily replace the government function.
  • A $37.5-million rainy-day fund spending on ENDOW; this program has absolutely no economic case going for it. The ENDOW group has not presented a single economic estimate of any kind to show that any of its ideas are even remotely likely to make a positive difference to the Wyoming economy. Until they do such estimates, credibly, and publish them for all of us to scrutinize, no taxpayer should accept a single dollar of further spending on the ENDOW initiative. 

These are just appetizers, small ideas that the governor - and the legislature - may want to consider, as a warm-up to a bigger conversation about the long-term role of government in our state's economy. 

And if they don't want to have that conversation, we will, right here on this blog!

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