Wyoming PBS

Capitol Outlook - Week 4 (2016)

March 4, 2016 - CHEYENNE, WY

Governor Matt Mead

Majority Floor Leader Senator Eli Bebout

Representative Rosie Berger Majority Floor Leader

- Governor Matt Mead and Majority Floor Leader Senator Eli Bebout and Representative Rosie Berger reflect on the state's budget, future revenue challenges and respond to a lawsuit filed by Representative Gerald Gay and citizen Karl Allred. Plus Governor Matt Mead's thoughts on Donald Trump. Our last edition of Capitol Outlook starts now.

Representative Gerald Gay [press conference clip from Thurs., Mar. 3, 2016] - The reason that we've assembled this afternoon is to announce that a complaint was filed in court this morning. The complaint is regarding practices having to do with large expenditures on the Capital renovation and associated buildings. The reason this complaint came about is that there is evidence that constitutional guidelines for large investments were forgotten or bypassed or not used.

Craig Blumenshine- And it's our pleasure now to be joined on Capitol Outlook with the Governor of the State of Wyoming, Governor Matt Mead, welcome to Capitol Outlook, Governor.

Governor Mead- Great, thanks for having me on.

Craig Blumenshine - Governor, our viewers have just seen the clip of Representative Gay and he said that the constitutional guidelines, in his opinion, were forgotten, bypassed or ignored (with regards to the Capitol Square Project). You've heard his comments, what's your response?

Governor Mead - Well, number one is when you look at the structure of the oversight committee, I think that the legislature set that up to try to have a full participation, not only from legislative members, but also from the public. I certainly disagree with his assessment on the law, but more importantly, you know in those meetings which are open meetings for the oversight committee, very often you would have the attorney general sitting there and if not the attorney general, you would have Mike O'Donnell a representative from the Attorney General's office watching the whole process, watching everything we've done and advising us as to the proper way to go about it. I'm disappointed in that I don't think I've seen the two plaintiffs in this law suit actually ever attend one of the meetings. If they did I think they would have a better sense of how it's open, how the votes are public. The numerous times the Attorney General has advised us during those meetings. There's lot of members from the press there, lots of members from the public and so I think they would have a better sense of how things actually work had they gone to those meetings. And I think it's unfortunate they're here at this point, having not gone to the meetings, if they would go they may've had a better sense of that everyone on that oversight committee, including myself, feel like the Attorney General's given us good advice and we've followed the advice.

Craig Blumenshine - There's some accusations in the suit, Governor, that there were political donations made to you that then resulted in agreements being made, perhaps outside in his opinion, of the normal, competitive bidding processes. Your response to those accusations?

Governor Mead - Well, you know of course those are upsetting to me, but people across the state gave me donations and this is one of the things, had he gone to the meetings, I think that he would understand. Before anything gets to the oversight committee it is looked at by the task force and the task force is even a larger group. The task force makes recommendations to the oversight committee and the oversight committee makes it's final decision. But there's a lot of stuff that A&I does by itself, on smaller stuff where they make decisions, they have to make decisions everyday. And so again, I think it's a lack of understanding of the process, but it's one of the reasons those votes are public is so everybody can see what's going on.

Craig Blumenshine - Let's turn now to the budget, Governor, and the primary focus of this session. You signed the budget Thursday and exercised your veto pen, a little more aggressively than you had in the past. What's going through your mind when youre looking at whether to veto some of the line items and that privilege that's given to you as governor?

Governor Mead - Well, you know first it's an extraordinary thing to have line item power and so I try to be judicious in how I use it. But you first start with the operations bill itself, the budget bill itself. Because I had such a strong disagreement with the legislature, in terms of their not accepting Medicaid expansion, which effectively right off the top you have to take 30 million dollars. You know I considered vetoing the entire budget or whether doing line items and at the end--

Craig Blumenshine - Vetoing the whole budget came into your thoughts?

Governor Mead - It did, I spent considerable time going back and forth on that. The question was would it get better and would I succeed if I did that in getting Medicaid expansion and ultimately I decided I didn't think that was the way to get Medicaid expansion.

Craig Blumenshine - If I could interrupt, if that's so important to you and obviously it is, you've made no bones about it during this session. Do you have plans still to carry that idea forward?

Governor Mead - I do, I think it's, you know we'll see what happens in the presidential election and different candidates say they're going to address the ACA in different ways. I was not a fan of the ACA and still think it wasn't the best way to go about it but we've lost the lawsuits that we filed on it. So now it's a practical decision, so we'll see who the new president is this year, but if it is somebody that is in favor of the ACA, we're hopeful that some changes will be made to it. But we're in a situation where roughly 20,000 people, small hospitals, a lot of uncompensated care, rejecting 250 plus million dollars every two--

Craig Blumenshine - Where's the disconnect, Governor, between your message? Which you've made forcefully, time and time again this session, with the legislature in your mind?

Governor Mead - Well, first we had a lot of groups out there that were very supportive of this and they're a mixed group. There is the business community, there's hospital associations, nurses and then myself. I think the disconnect is that some of the legislators are still convinced, as I was when we started this, that it's unconstitutional, the ACA's unconstitutional. But we lost that lawsuit and I just don't think they are willing to go forward with this, either because of campaign promises or because in their own mind they believe it's just not gonna work. I respect that they haven't bought on to what I'm saying but you know as I tried to hint at in my State of the State, you may have doubts about whether this is gonna work but you shouldn't have doubts about what we're doing now is not working, that's a known quantity that it's not working. So we'll continue to try to make the case. I'm appreciative of the efforts of so many who tried to help out on that message and you know ultimately at the end of the day I failed to make the case.

Craig Blumenshine - Lets move on Governor, to maybe what lies ahead and I want to take you back to the year 2000. A story in the New York Times I read yesterday talked about part of Governor Geringer's campaign and he was travelling the state selling a sense of responsibility to people who have grown accustomed to low taxes and as he said in his State of the State address, "That in order to create a long-term solution "we must make some difficult choices." In this interim, Governor, what do you plan to communicate to the citizens of Wyoming and does that include a discussion about taxes?

Governor Mead - I think it's, the first thing on the interim we're gonna continue to talk about Medicaid expansion but in terms of where we are in revenue, particularly as related to education, I think that is the message. I think there's hard choices. We see even from the January craig till now, the picture is not getting better, in fact it's getting worse. If it continues, this trend, as we head into the supplemental session, hard choices will be made. We will make additional cuts, we're gonna have to make additional cuts. You get to a point where, you know you have cut to the point you don't have the effectiveness you need in any program including education. As I saw that and I saw where we were headed in this session, I allowed for the ECA, for education because I wanted them to give time to respond. So I've certainly met with the superintendents and been supportive of where they are, but I've also asked in this interim period, you have to help us make these hard choices because it's gonna be, I suspect, a combination between cuts and where we get additional revenue. On additional revenue, of course we still have significant rainy day savings. For us to be talking about raising taxes at this time I think the first reaction from the public is gonna be why do you have so much rainy day savings and you're asking us for more money?

Craig Blumenshine - Do you still feel that where even after this session where we're now spending that--

Governor Mead - We're spending rainy day.

Craig Blumenshine - Is it a different conversation now that you've started to spend?

Governor Mead - I think it's a matter of degree. I think that certainly if we had not spent anything and we continued bringing up the rainy day, you know that's even more stark question for the public to be asking. But even before this session we saw in newspapers and others, people saying this is the time to raise taxes, but where I am and the hangup I still have now is the taxes that we would try to raise you have to ask who's gonna be paying those? And when you get 70% of your revenue from minerals and it's the mineral companies, oil, gas and coal that are hurting so badly right now, I think that's a tough way to go. So I don't know what the solution is, but I think everything's got to be on the table between now and next session as to what are the right answers. We will continue to hope for and there's some reason to have that hope for better mineral prices. But at the same time I think we have to plan for a worse case scenario in terms of revenue continuing to drop.

Craig Blumenshine - One of the most discussed conversations in this legislature had to do with the additional reductions compared to your budget with K-12 education. What are you hearing now that this, I think the numbers about 36 million dollars difference between your budget and what you signed in reductions. How is that filtering down to the superintendents and what are you hearing on the impacts that these cost reductions are going to have?

Governor Mead - You know, during the session I met twice with superintendents, not all of them, but representatives of the superintendents across the state and I heard from small districts, for example in Kemmerer, I heard from medium sized districts and large districts. Some were shrinking, some were growing and the general message they had is, they're willing to engage with us to make the difficult choices. The problem for them is they need time for the model to work and they need time to make adjustments themselves in the best way possible. Some of the superintendents are really concerned and while it is an increase--

Craig Blumenshine - Smaller districts primarily?

Governor Mead - It's mostly smaller districts but not limited to smaller districts. They're very concerned as they lose students and they also are starting to have to cut teachers, how is it all gonna play out? So I think they just haven't had the time to make the adjustments necessary but I think that's part of my request to them is how do we go into this next session and how can we best work with the districts and the principles and the teachers? In finding a model and a path forward that doesn't cause such difficult things to occur in our districts.

Craig Blumenshine - One of the provisions in the budget bill that you signed, Governor, was a directive for agencies to give you what additional 5% cuts will look like in their budgets for you to consider. And some of the criticism that the minority has given about this process is that these cuts that have been made haven't been really as transparent as they should have been. What is the opportunity for citizens to participate? What are your thoughts on how citizens can participate in this process that looks like it's going to become more dire before it gets better?

Governor Mead - You know, a couple years ago when we had to make cuts we had a year, roughly, during the interim period where I had asked the agencies to make roughly a six, six-and-a-half percent cut and that process to allow that amount of time I think was helpful because it did allow for public input through the agencies or outside of the agencies to say this is not an area we should cut. And I think that is not only important to have the public have that input but it's important for us to hear that because we will get the best information from the public in terms of where we think additional cuts should be made. How I feel about that 5% is, you know I watch the budget very carefully as does my staff and we may make recommendations for that amount of cuts or it may mean we make deeper cuts. So the public participation's critical during this one-year period of time.

Craig Blumenshine - Governor, we have just a couple minutes left in our time this morning. I want to turn to national politics, if I could. What do you make, Governor, of Donald Trump's success in the way he's handled himself in his campaign? Have you thought about that?

Governor Mead - Yeah, well first on the success part. I think he has captured what a lot of us feel is frustration with our belief that Washington, D.C. is not working as it should. And I think he's capitalized on that better than the other candidates. But as a candidate, I would just say you know the way he, some of the things he says and how he says them, I don't agree with. My standard may be what would my grandparents say if they were watching this debate right now? Or what would other grandparents and great-grandparents say that watch debates of Nixon and Kennedy? I think it's troubling to me because when you see people running for president on the stance and your'e a liar, no you're a bigger liar. I don't think that's helpful in us making our selection this year but moreover we have to think long-term, who is gonna be that next group of people that wants to run for president if it looks like the process is sort of this sophomoric, who's gonna be calling who the biggest liar, who's gonna be calling you ugly or me ugly? And so I'm disappointed in the nature of the debate as it gets that way and I think Donald Trump, as I've said I think he's captured some ideas that are of importance to many Americans but I do not like the way that he's handled some of those. I don't like some of the things that he's said and I think that he could make his points without doing it in that manner and what I'm saying is that manners matter.

Craig Blumenshine - Can you support him if he's your party's nominee?

Governor Mead - If he turns out to be the nominee, one of the most important criteria for me is who can beat Hillary Clinton? So I would because if the option's between he and Hillary Clinton I would choose him before Hillary Clinton.

Craig Blumenshine - Lastly, Governor, do you see a brokered convention?

Governor Mead - No, I don't know, I mean that looks like it may be a possibility but the nuts and bolts of a brokered convention and how that works, I actually got online about a week ago to try to refresh my own memory on how that, whatever 1,236 votes and how it all works out. I'm not sure that I got a grasp on that but as you heard the debate last night and beyond that, at least some of the candidates think there's a possibility for a brokered convention.

Craig Blumenshine - Governor Matt Mead, it's always a pleasure to visit with you.

Governor Mead- Thank you.

Craig Blumenshine - And we are appreciative of you sharing your views on Capitol Outlook.

Governor Mead - Thanks for having me on, I appreciate it very much.

- [Craig] Thank you.

- [Governor Mead] Thank you.

Craig Blumenshine -  It's our pleasure now to be joined by the Majority Floor leaders of both the Wyoming Senate and the Wyoming House. Representative Rosie Berger and Senator Eli Bebout,

Craig Blumenshine- Good morning. thank you so much for joining us on Capital Outlook today. A lot to get to. The budget now has been signed by the Governor and there have been some vetoes that came across it yesterday afternoon, yesterday evening. What do you know about the Governor's line item vetoes? We'll start right there.

Rep. Berger - Actually I thought a lot of them were technical aspects that can be removed and maybe there was a little bit of micromanaging, on our part for the capabilities of what the Governor can do during the interim. You know, we are in a very complex and difficult situation with the decline in our revenues and I think we're trying to work collaboratively to maintain a balanced budget and also to look to the future as to the issues that will be at hand. We don't know if the prices of oil and gas are gonna continue to go down or if we're gonna have a turn around. So giving him the flexibility to be able to work with his agencies is really critical.

Craig Blumenshine - Senator, your budget cut a little more than what the Governor gave to you in December?

Sen. Bebout- Actually we did a little bit and what we need to be thinking about as we look to the future of Wyoming, we need to look past this two-year budget cycle, even the next four years, we just had to have a vision of where we want to be and thank goodness for the conservative fiscal policy we've had to set aside the savings account, and different things to prepare for this. It wasn't a matter of if it would happen, it was a matter of when. We knew that the commodities prices would turn down, history repeats itself and that's what happened. So I think you have to look at a combination of three things. You need to reduce the size of government and control spending, you need to be very smart about how you use your reserves and look at a long term plan, which we did. We capped the side-boards and how much we should spend and then you need to look at the money that's spent and how it's spent properly for the citizens of Wyoming. And possibly look down the road to how we're gonna fund government if minerals don't come back.

Craig Blumenshine - Senator, I spent some time yesterday at the State Archives reading about your work as Speaker of the House in 2000.

Sen. Bebout - That was a difficult session as well.

Craig Blumenshine - It was almost like I was reading the newspaper today and I'm wondering, Senator, are you thinking that Wyoming might have those similar discussions two years from now? I know in your budget you offered an amendment that was successful in requiring administrators to give an additional 5% cut to the Governor. Of what those budgets might look like, are we heading down the same road as you were at in 2000?

Sen. Bebout - It's really very simple for me, why take the chance? You know when we started out in the 80s when the boom busted in the 80s and some people said it would be two years and some of us said we have to look past that. It lasted 10 years and we're in a much better position now than we were then and I remember very well we are in a much better position now. But we just got to be smart about how we move forward, it's just like we run our personal lives and that's the way we need to run the state. We're better positioned and yes, I think quite frankly between you and me, I think when we come back for the supplemental budget we're gonna have to make further cuts, possibly. Because the revenues that aren't there and the big thing that we need to be concerned about is the price of oil has it's impact as well as gas, but it's volume.

Rep. Berger- The importance I found with the budget process is that we go through many layers of getting to yesterday, when the Governor signed the budget. But it's really laying a foundation for the next two years or beyond. So that we are in a secure place, I believe, to be able to manage, not only our savings but just our spending alone. The 5% that we've been discussing, looking for agencies to reduce in their operations I think is a really important process that we need to go through. It seems somewhat, upfront, austere but the fact is it's time that we really look at programming and looking at the benefit of the services that we're providing, in order to make certain that we're investing our money wisely. I think this is an opportunity, not only for the Governor, but for us as legislators and agencies to say is this in the 21st century the right method to deliver services to the people of Wyoming?

Sen. Bebout- On the flip side of that two is that Wyoming is open for business. I mean you look at the way we did this budget, we've been very generous, everybody should take a little hit. We've been very generous, we were able to resolve the issue of city, town and counties, we need to do something for them, I totally support that. But everybody has to take a hit and yeah, we are open for business. You look at other states, you look at other state's educational systems and I've talked to our superintendent, back home over in Riverton, and you know obviously more money is always nice but he looks at where he came from Nebraska and Wyoming does a very, very good job of funding our schools, we can be proud of that.

Craig Blumenshine- Senator, we're to education here in just a moment, but I want to carry on the conversation a little bit further about potential revenues and President Nicholas' call for the Joint Revenue Committee to take a real solid look at things like tax exemptions, maybe additional taxes. What is your message to the citizens? And as an extension of that, what should our citizens be thinking about in the next two years in regards to either maybe losing services or additional revenues. How can they contribute to this process?

Sen. Bebout- Well, that is the process. I think we need to hear from our constituency and Rosie you and I certainly will, that's Wyoming. That's the beautiful thing about our state and I think everything's on the table. I think further cuts are on the table, I think being smart about how we spend our reserves are on the table. I think if you want to look at revenue enhancements, it's on the table.

Craig Blumenshine- Well, Representative, you're gonna have those revenue bills generate in your body next year potentially.

Rep. Berger - We will and we're very fortunate--

Sen. Bebout - We'll send 'em to you.

Rep. Berger- Yeah, thank you very much. But we have a great team right now of our standing committees and in a couple of hours we'll go into management counsel and start discussing all the interim topics, which are really important. And when you look at it it's about the future and it is looking at do we generate new taxes? And how would we do that? Or look at the exemptions, now I've been through that process several times as far as trying to reduce tax exemptions, it is not an easy job once you've put that into statutes.

- [Craig] Everyone still wants that exemption.

- They still want that and we certainly went through some cuts this year with some of our tax exemptions and some of our rebates. It becomes politically difficult to do that, but at the same time a couple of years ago we passed the fuel tax increase and really and then gas went down. But the fact is no one really noticed a difference in their pocketbook on that and yet it benefits the state of Wyoming by doing that. So we all have to work together on this. What I hear all the time is no one wants an income tax but we do need--

Sen. Bebout - Income tax is not on the table.

Rep. Berger- Exactly, so I mean I don't see that cause that's not my constituent base nor I don't see that in leadership. But we do have to look at some other ways that we can generate new revenue. And especially as we were talking about education.

Sen. Bebout- The three things that drive the state, the three words you would use are jobs, jobs and jobs. And we have education, we have infrastructure way up there in all those categories, we have to create good paying jobs, it still gets back to jobs.

Rep. Berger- When you go back to jobs, that's why House Bill 80 with community colleges was so critical in stabilizing that funding formula because now as we in a society, retool--

Craig Blumenshine- A lot of people would argue though that jobs outside of the energy sector really don't do much for the tax base.

Sen. Bebout- It's a good argument as well.

Rep. Berger- It's a good argument, but look at what tourism is doing and our ag sector, those are important to the quality of life.

Craig Blumenshine- Let's go back to something we touched on just briefly just a moment ago. You settled on about a 36 million dollar cut to education from at least--

Sen. Bebout- It's not a cut, it's a reduction in the increase.

Craig Blumenshine- Okay a reduction in the increase, let me talk about that. You said you'd talked to Superintendent Terry Snyder from Fremont County School District 25 and Representative Berger too, what have you heard on what the impact of this 36 million dollar reduction will be to the children in K-12 Education in Wyoming?

- I realize that this is a critical time for education and we have invested in it. But I do believe we've done a good job and I think that moving forward there will be other cuts but I don't think it's really going to impact the classroom.

- Senator, there's some discussion that the districts who are going to lose enrollment are going get hit twice. What are your thoughts when you heard that testimony?

Sen. Bebout- It's true, I mean that's what happens when you have a downturn in the minerals industry. The jobs are lost and people that have those jobs in minerals industry are good paying jobs, a lot of young people and some will be leaving our state. So enrollment, we have the three year rolling averages that reduces the impact but that's very real. But instead of worrying about how much we're not spending let's look at the positive side of education and you look at Wyoming, we can all be proud. Previous members of the legislature, the teachers, the school boards and everybody can be proud of where we sit in the big scheme of things and how we funded education. We're at the very top, we pay our teachers more than anybody in the region, we've got great teachers, we should be proud of that. And we're going through a situation where if you look at education, we're over-funding the roll by 65 million dollars.

Craig Blumenshine- Representative Berger?

Rep. Berger- Right, well if you look at the Management Council list of ideas for funding schools and capital construction, one of those suggestions is looking at taxing wind-generation which we haven't done and that's an opportunity. We're gonna have to find other ways to generate more funds but we have also throttled back on the projects that we're doing so that helps.

Sen. Bebout - One of the things too about schools, you know we used to have local skin in the game, that made a big difference where the local people vote on schools, we had it in Riverton, you remember when we built a brand-new high school. Representative Tippins was a big part of that so I wish we had a way to get local people back into the mix.

Rep. Berger - And I think there's an interest for us definitely look at that and to see what communities think.

Craig Blumenshine- As we wrap up the discussion today we heard at the top of the show comments from Representative Gay and the complaint that he's filed against the Governor, the leadership and the Attorney General having to do with the Capital Square project, the leases in this building and campaign donations, et cetera. I want you both to have the opportunity to comment, you've heard what Representative Gay had to say, Senator Bebout, I'll give you the first opportunity.

Sen. Bebout- Well thank you and yes we did see that late yesterday, I haven't actually read the complaint. My focus right now is on getting the budget completed, taking care of the job that I was elected to do which is represent my constituency back in Fremont County. We're gonna do that, we're gonna get out of here hopefully tonight, we're gonna do the best we can for the folks of Wyoming and I'm gonna deal with that next week.

Rep. Berger- The constitutional questions that Representative Gay brought forward, Representative Berger, I'll give you the last opportunity here.

Rep. Berger- Well I just think as an elected official that I have really held up to my responsibilities and our meetings have been probably about 52 meetings in the document that was issued. I again too have not had the opportunity to really sit down and look through it completely so I'm disappointed actually by the actions but we will move forward and again once we get out of town and have a balanced budget and get everyone settled and safely home we can address this issue.

Sen. Bebout - Yeah, and one really important thing, when I raise my hand and I swear to uphold the constitution of the State of Wyoming and the United States of America that's my pledge to the citizens of this great country and I have very strong feelings about upholding that pledge.

Craig Blumensine - Senator Bebout, Representative Berger, thank you so much. Looking forward to seeing you again next year.

Sen. Bebout- Thank you.

Rep. Berger - Yes.

Craig Blumenshine- And to our viewers and I know you're aware of this, Senator Bebout, my thoughts are with Senator Bill Landon a mentor of mine clear back when I was in high school and I know that he's dealing with some issues with his family and our thoughts are with him. It's been a great season of Capitol Outlook from Wyoming PBS. We hope that we've brought issues to you. It's a challenging time for the state of Wyoming and we look forward to continuing understanding the process of the work here at the Wyoming Legislature. From all of us at Wyoming PBS, I'm Craig Blumenschine, thank you.