Wyoming plans for $1.2 billion surplus

CHEYENNE, Wyo. -- Political leaders in Wyoming have a dilemma their colleagues in many other states can only dream of: what to do with a projected $1.2 billion surplus.

Suggestions for lawmakers range from extra funds for schools and prisons to saving more money for a rainy day.

"It's a phenomenal opportunity to do things that the state has only dreamed of for decades," Gov. Dave Freudenthal said.

The unanticipated windfall -- mainly the result of increased revenue from higher oil and natural gas prices -- represents three-quarters of the state's current general fund spending.

By comparison, in California, a proportional surplus would total $59 billion, or more than enough to wipe out that state's $36 billion debt and shortfall.

The big surplus comes as Wyoming lawmakers convene their budget session Monday. The biggest question is deciding how much to spend and how much to save.

30 states with deficits

Despite a slowly improving economy, 30 states are projecting combined deficits of $39 billion to $41 billion, according to The Rockefeller Institute, a public policy research group.

Wyoming, though, has enjoyed a revenue resurgence, leaving officials with spending and saving options they haven't seen in their lifetimes.

"States like Wyoming and West Virginia are countercyclical states, meaning they tend to do much better when other states are doing worse, in part because of energy prices," said Arturo Perez, fiscal analyst for the National Conference of State Legislatures.

Scott Pattison, executive director of the National Association of State Budget Officers, said no other state comes close to Wyoming, either on a percentage or overall dollar basis.

Wyoming's needs include a prison expansion, rising Medicaid costs and a $500 million backlog of public school construction and repairs.

"We don't have money to throw away, but we do have money to allocate to real needs," Freudenthal said.

Jami Nicotera, a Kemmerer homemaker, suggests spending a portion of the surplus on teachers.

"I'm not talking about computers and books," she said. "If nothing else, a bonus for educators that directly deal with our students -- not administrators. Our kids are our future."

Senate President April Brimmer Kunz, a Republican, cautions that a large surplus is often accompanied by higher requests from state agencies and groups looking for a bigger slice of the pie.

Kunz suggests legislators focus on fixing schools and state buildings and on helping local governments. "We have a lot of failing water and sewer systems around the state and we need to take care of it while we have the money to do so," she said.

Democratic Rep. Wayne Reese, the House minority leader, agreed.

"Anyone that owns a home can tell you it's a lot cheaper to fix the roof today than it is to wait and fix the roof and the interior water damage later," he said.

Under Freudenthal's budget proposal, spending for ongoing government operations would increase 19 percent, or $285 million.

Republican Rep. Randall Luthi, the House majority leader, said although Wyoming's finances are in better shape than most states, he is concerned his colleagues might be harboring a false sense of security.

Oil and gas prices can drop just as rapidly as they have risen, Luthi warned.

Luthi hopes the Legislature approves a plan to put more money into the $2 billion Permanent Wyoming Mineral Trust Fund, interest earnings of which help defray the cost of government.