Wyoming PBS - Capitol Outlook Week Two (2016)

Feb. 19, 2016 - CHEYENNE, WY

Senate Vice President Drew Perkins (R) Senate District 29

House Speaker Pro Tempore Tim Stubson (R) House District 56

Representative Bob Nicholas (R) House District 8

Dr. Laurie Nichols, newly appointed President, University of Wyoming

Craig Blumenshine, Wyoming PBS: The Wyoming Legislature is generally holding fast to cuts made in the state's biennial budget by the Joint Appropriations Committee. With amicable debate both the House and the Senate have worked long hours this week working on the budget and with third reading of the budget bill imminent we'll hear from Senate Vice President Drew Perkins House Speaker Pro Temp Tim Stubson and Representative Bob Nicholas, all members of the Joint Appropriations Committee. Later in the show we'll meet Dr. Laurie Nichols. She's been named the first woman president at the University of Wyoming and she's been working with a transition team to prepare her for her work at UW which will begin in May. We've also added extra web content and an extended web interview with Bob Lampert director of the Wyoming Department of Corrections with hiring issues, budget cuts, and an 85 million dollar problem at the Rawlins Prison. There are some tough challenges ahead for Lampert's department. You can see all of our web content at WyomingPBS.org and Capitol Outlook starts now.

Craig Blumenshine, Wyoming PBS: We're pleased to be joined on the Capitol Outlook set by three members of the Joint Appropriations Committee. They've been wading through the budget since December and the third reading of the budget is now imminent in the Wyoming Legislature. Joining me today is Representative Bob Nicholas from House District Eight. Representative, welcome. Speaker Pro Temp Tim Stubson from House District 56 welcome.

- Thank you.

- And Senate Vice President Drew Perkins from Senate District 29, welcome to Capitol Outlook.

- Thank you, glad to be here.

- Senator let me start with you. You've had a couple long nights this week. The debate has been relatively amicable in this budget process at least it seems that way to me. Is this the budget that you thought you'd have at this point when you started wading through this in December?

- Well quite in all honesty I don't think we knew exactly how bad it was going to be as we came down here and when the January Crate came out it as we started the second half of our budget deliberations we found out that it's actually a bit worse than we thought it was going to be as we started. So we started down to the process. A long story short yes I think this was the cuts that had to be made. I think at least a significant amount of us on JAC think that this isn't going to be the tough biennium. We're very very concerned about the 2019, 2020 biennium and I think our goal or at least my goal coming in was to set a glide path towards that through this current biennium so we started this to see if we can level this off and flatten it out even take it back in a few places in preparation for what could be even potentially a more drastic time.

- Is that the common thought, that this is the tip of the iceberg so to speak, Representitive Stubson?

- I think it is and I think it's not just that way among the JAC I think it's that way among the floor. One of the surprising things to me you know we made significant cuts as we worked the budget in JAC and typically at least in my time here you end up on the floor fighting those things and losing a lot of those battles. A lot of that money gets added back in on the floor. We didn't see that at least in the second reading of the budget. We actually came out of second reading with a lower budget and more cuts than we had going into it which I think is a reflection that the Legislature as a body recognizes the serious situation you know that we're in and recognizes that we have to plan now for even tougher times ahead.

- Representative Nicholas do you agree that this has set Wyoming on that glide path in the best way or do you think more cuts are imminent or at least for this biennium do we have a good budget?

- I don't think that any more significant cuts are going to happen. If you look at the posted bills for today on third reading you have some cuts and you have some additions. I think that there are fewer overall third reading amendments than are typical and they are less drastic than we've seen in the past and so I think that what Representative Stubson said is correct is that everyone recognizes that the situation we're in and the need to be fiscally conservative but take care of the obligations that we have, so.

REVENUE


- We're going to really get into and dissect the state's revenue picture next week but I'm sure that each of you has thought about it. Certainly as energy goes so goes revenues in Wyoming. Is there a time and is now the time in the interim to have a discussion about Wyoming's tax base and whether it needs to be altered or changed or modified? Are we at that point yet? And again Senator Perkins let me start with you.

- I don't think it ever hurts to discuss either revenues or expenditures. As you go through that process in the end Wyoming has to live within its means both by constitution and by the conservative nature of our people we live within our means so I don't think it ever hurts to have those discussions. My opinion is is that we will continue to make adjustments in the budget to deal with increasing or flatlining the revenues and that quite frankly as we listen to our constituents the people around me will tell us if and when I think it's appropriate or if it's time to have a revenue enhancement, some kind of additional tax or an increase. I think the people in Wyoming will tell us when they're ready.

- In your leadership either collectively or individually are there opportunities to start talking about that now Representative Stubson?

- You know I think the biggest known revenue problem of course is with school construction. That's a place where you have because of the coal pit bonus monies we've used that to fund our schools for the last 15 years and that has built every school in this state and now we know that it's gone that's the biggest known problem and we're going to have to talk about a sustained flow of revenue and that may not be new revenue it may be an existing stream but that's a conversation that really has to happen but you know the fact that we have volatile revenues it's not a surprise it's something we all know it's something we've seen throughout the history of our state and frankly it's something that we've been planning on and you plan on it so that when it happens you don't have to snap into and jump at new revenues right away. You can kind of ride it out at least for a little bit and figure out if it's a long-term trend or not and I think that's really what we're trying to do. Let's make sure things are stable over the next few years so we can see what happens in those commodity markets.

- Representative Nicholas your budget slows the burn rate if you will relative to the governor's budget and extends that period of time maybe of being able to ride out tough times a little farther. Let's talk about what that burn rate is in your mind the speed at which we use our reserves. What sort of discussions have you had relative to that? Have you put a year on it, Senator Scott in the Senate said this is a 10-year plan now we're looking at. Have you talked about those things?

RESERVES


- We talk about it every day. I think the consensus is that at a minimum we ought to be looking about a 10-year burn rate but there's all kinds of different problems with that and it changes from year to year in what commodity prices are and where we're going and part of the problem with that 10-year burn rate or one of the issues with it is that that concept really is kind of based upon a three billion dollar LSRA and not a 1.8 billion dollar one and so and if you look at what we've done so far this year you know roughly 200 million is coming out of the LSRA and that's close to a 10% burn rate and if we don't have our SPA you know our unanticipated capital gains come back in it's a pretty strong cut. And so whether or not that's the right number or not I think that each year we come back and as we monitor our revenues and our expenditures that will fluctuate but that's just responsible planning and how we look at it each time to go down the right guide path and to if you look at you know they took a I think a kind of informal poll earlier on at the beginning of the session most folks don't want to go into the LSRA at all if there's any way possible because times may get worse and if you look at the forecast on long-term funding on capital gains over the next course of the 10 years it's between one to four percent at best and so the glide path will kinda form itself based upon revenues and our abilities to control our spending and what comes in, so.

- Representative Perkins are we spending out of reserves at a way that is philosophically okay with you with this budget?

- It's probably a little bit aggressive for my blood but ultimately I think that that's as you talk about the rainy day fund and when you're going to use it which is the LSRA or the rainy day fund the Legislative Stabilization Reserve Account I think that there's the three questions and Bob's absolutely right we've talked about this over and over every day probably since we've been together. First of all you kind of have to figure out if the revenue is it a short term blip or is it a long term problem? So once you do that then that'll help you make a determination of when it's raining. Is it actually raining? Is it time to access the rainy day funds? And if it is then the third question that you've got to ask and you've got to have at least some idea of to move forward is how long is it going to rain? And so I think the feeling was that we needed to have at least a 10 year rain out and if that then it makes the math really easy if you've got a 1.9 million dollar you can't really take more than about you can't take more than 10% of that amount per year or within a few years you could really be in trouble.

- Representative Stubson?

- Yeah I think I agree with the comments made. You know the other thing is that the rate of refreshing that savings over time is an unknown and something we need to sort of monitor over time because we have a flow of some of our capital gains going into that and so hopefully if investments perform well then you can actually afford to spend a little bit more out of the LSRA but of course as we look at the markets today that's not a strong likelihood but I think what you see is I've also seen this session as a real difference in approach between the Legislature and the governor on how we're going to treat those savings. We had a budget that came to us that only had 18 million in cuts and the rest of it was taken care of through savings essentially. We really through a lot of hard work have brought that closer to 200 million in cuts and I think it reflects this approach that look we want stability we want sustainability and we anticipate things likely will get worse.

EDUCATION


- I want to turn the discussion to education. Some of the closer votes on education are relative to education funding have been attempts to restore some of the cuts that you've made to the school foundation account. 15 million dollars the first year and 30 million dollars the second year for a total of 45 million dollars. We asked the Superintendent of Public Instruction Jillian Balow her thoughts about that and this is what she's had to say.

Supt. Balow:  We will do probably a little bit of licking our wounds after this session is over and then get right into planning mode. I don't think that good education is solely the result of funding. We have 48 school districts who are dedicated to bringing the best to our students no matter what the funding picture is and we have a Department of Education and myself as State Superintendent who are committed to providing the best support that we can to school districts across the state despite the funding picture. So we'll find the net win and I'm not sure where that will be yet but we will find that and we'll move forward and continue to grow kids and our education system.

- So now the question is, is there a way to get a net win with education? Are you comfortable with the cuts? Are you certain that these cuts aren't too drastic for education? There's a lot of interest obviously as there should be in the state for K-12 education. Share your thoughts.

- Well first of all let's look at what the cuts are to the ECA. We gave them about a 75 million dollar ECA increase last year. This basically reduces that down to about 38 million and so we're taking off of the ECA increase that we gave them and so in that sense it's not really a cut it decreases what they're going to have in the future. But let's look at that in terms of the overall education.

- Is that understood do you believe that people understand that it really that the philosophy really is that this really isn't a cut it's just a decrease?

- I mean I think it's all in the view of the beholder and so that's just the way it is. But you know our issue is that we had a 250, 230 million dollar decrease just in this biennium alone in overall general fund dollars and availability. We're going to be at about a 500 million in the next biennium and on the education side the picture is even more bleak, it really is and it's our biggest hurdle in our future in the next six years and to reduce it by 38 million dollars over the overall budget is less than point zero two percent of the overall education budget and so if you put it in context of that plus if you put it in context of what we're cutting from the rest of state government which is much more draconian you're going well you know we think it's fair and it's reasonable. Some folks don't and some folks feel there's a constable obligation for us to maintain that ECA and depending on what model you go by and so really it's a good compromise. I think there's two bills coming out in third reading that's going to try to cut that in half and it's going to be a hard fought battle but we're fighting really now over 15 million dollars on the ECA so we're just doing our best to make sure that everybody's getting treated fairly and in times when we have less money.

- Different thoughts on the model and one is that okay if we have declining enrollments we're going to get hit and now you're going to hit us again you're going to hit us twice and that there's some testimony that smaller districts might have more concerns here than some larger districts. What are your thoughts about that?

- Well I think that when you look at again when you bring it back and put it into context Wyoming is, continues, and even with what we've done will still I don't think it'll change our ranking in how much we spend on you know in number of states and ranked against the other states where we fund our kids we still fund our kids very very well certainly in the top 10 depending on how you compute it sometimes in the top five of what we spend per student. You also look in the context of the entire education budget. When you look at both the school foundation account which is the money that goes out in block grants to the schools and the school districts if you go to and on the Department of Education combined is like a three billion dollar budget out of the entire process so when you look at and compare a cut out of a budget even in the school block grants of it's about 1.8, 1.9 billion I do believe that you know it really is less than a 1% cut so the concept is as you go through all the budget cuts was can the state as we try and get ready for the future and this bumpy ride we're into can we live on 99 cents out of every dollar we used to have? And then in the second year of the biennium can we live on 98 cents of what we used to have and ultimately as you look at that is it fair that education be held harmless from that particularly when you look going forward we always monitor these things trying going out four to six years to see what's it going to look like in four to six years? And if we don't do something in this regard we could be staring at a 500 million dollar deficit in the school foundation program as we come in in about four years from now and so ultimately if you do that at some point is there some point you can't I guess you could argue education should take ever dollar in the state but I don't think that's what the people of Wyoming want or expect.

- Your thoughts on education Representative Stubson.

- I think I agree and I think the point to make first of all is we still even with this really a nick of 45 million dollars we fund education very very generously. The salaries that we pay teachers are higher by an order of magnitude over anybody else in the region and so this shouldn't impact and shouldn't harm the way we educate kids in the state but the fact is that we're burning through almost all our education savings this biennium. Almost 600 million worth of savings we're spending to maintain our K through 12 system and so you look at two years down the road that 500 million dollar cliff that Senator Perkins talked about, we do that with the cupboards bare with nothing really left to address it and so part of this was well now you cut that by 45 million, we also took a 48 million dollar chunk that had been intercepted for the current year's deficit and we maintain that for savings and so that sort of eases our process of dealing with that but we still are looking at several hundred million dollars that we have to come up with between now and 2019 to fund education and so you know the key is stability. What you don't want to do is have these wildly fluctuating funding levels across school districts because that's what makes planning tough and what really makes doing the day-to-day job of education tough.

CORRECTIONS

- I want to turn the page if I can to the Department of Corrections. You heard testimony from Director Lampert relative to problems at the Rawlins Prison and now you have some decisions to make on how to best address those problems. We visited with the Director also and this is what he had to say about the issues facing the Department of Corrections.

Bob Lampert:  In regards to our costs at Torrington when we built that facility the cost per bed was around 175,000 dollars per bed. The cost of repair at this point on average is closer to 102,000 dollars per bed at WSP.

- That's in Rawlins.

- That's in Rawlins. And we have some projections that show that the cost of replacement particularly to the high custody areas of WSP for new construction would be even more than that so the conservative or fairly conservative estimate would be at least 125 million as high as 200 million for replacement of the facility.

- Alright we've heard from Director Lampert. It is expensive, the game of corrections is very expensive but you have a problem in Rawlins. What are your thoughts on how from your perspective in the Joint Appropriations Committee anyway that this should be addressed in planning forward for the Department of Corrections? We'll start with you Vice President Perkins.

- Sure it's a problem. There are several 800 pound gorillas in state government. One of them is the Department of Education. Almost half of the entire budget is education. The other three large departments that take up the lion's share of the remainder of the budget the Department of Corrections the Department of Family Services and then the real on that non-education side the Department of Health and you look at those are tremendous amounts of money that go into those by necessity. We've got to take care of these folks and care of those institutions. Back to prisons specifically what turns out is that the soils that apparently the design of the prison was correct it wasn't built correctly. It's been so long there's probably not much recourse but long story short that prison or at least the non-supermax part of the prison if you will is in big trouble and there's going to either have to be replacement or significant rehabilitation.

- What are your thoughts on that Representative Stubson?

- Well it has been sort of like this slow-moving disaster that we've been watching in some respects because Senator Perkins and I both serve as liaisons to the State Building Commission and it was really last year that we first got a hint that there was a settling happening and that something was going to be done and it wasn't until January I think that we got this number of 85 million and I'm still it's a preliminary number, I think there's still some work to do to figure out if that's really the right number or not but the fact is we're moving forward. This session we've appropriated money to build out the extra pod that has been shelled in over at the medium security prison. So that should be done over the next year so that if we hit a point where we have to move prisoners out of Rawlins to address those situations we at least have a homegrown solution to that. I think there's a lot more investigation to do but we have two prisons now that have been built in the last you know 30 years that are sinking into the ground over there in Rawlins so I think we need to ask ourselves some hard questions before we start spending a ton of money over there.

- We're going to continue this discussion now on the web. For the broadcast version we'll stop it right here. It's been a pleasure to visit with you all and we'll continue this discussion like I said. Representative Nicholas, Representative Stubson Vice President Perkins thank you for joining us on Capitol Outlook.

- Thank you.

- Thanks.

Dr. Laurie Nichols, new President, University of Wyoming


- We're very pleased to be joined now on the Capitol Outlook set by the current Chief Academic Officer at South Dakota State University Dr. Laurie Nichols. But you've now been appointed the first woman president at the University of Wyoming.

- Right.

- Congratulations.

- Thank you.

- And welcome to Capitol Outlook.

- Thank you.

- You're the first woman president of UW and we are in the Equality State. Have you thought about that?

- Well I have and I'm very excited about it. You know I've heard quite a bit about Wyoming's Equality State status and you know one of the things that that means is that women really have the same rights and opportunities that men do and so it's wonderful that Wyoming has stepped out and named their next president myself as the first woman and I really think it demonstrates that Wyoming is really serious about equality and that they really do want to hold up women as role models to others and I think that's something I really can become and I'm very excited about that.

- You're currently a jackrabbit.

- Yes.

- You're going to become a cowgirl

- Yes.

- or you're becoming a cowgirl through this transition process

- Right.

- you've been involved in.

- Yep.

- What has been involved in your transitioning planning Dr. Nichols? How is that working? Logistically how is that functioning?

- We have set up a transition plan and it's included me coming here. This is my second trip now since I've interviewed. It's my second trip so I was here in January and I'm here again now today and tomorrow and then I'll be back in March and in April and I begin in May. So really we charted out once a month where I would come back and just strategically spend time with people and places that I needed to be as I would learn more about the state and learn more about the University of Wyoming. So today I'm in Cheyenne and I'll be spending time with the Legislature. Other times I've been back on campus and in March I'll be spending time with the trustees. So it's strategically planned and I think it's very well done and then in addition to that I've had visitors come to South Dakota State University and that has been delightful. I have really enjoyed it. So I've hosted now about six individuals from the University of Wyoming and they've come to Brookings and they've spent a day with me where I work and I've been able to introduce them to their counterparts at South Dakota State as well and we've just kind of shared what we do at SDSU just so that we can kinda get some back and forth thinking. I think it'll help in the transition because they'll understand the environment that I've worked in as well and everyone that has done that has said it has been so insightful and so I think we may do a couple more of those trips as well.

- Both land grant institutions is the South Dakota State University and the University of Wyoming. You commented in your interview process that you think the University of Wyoming needs to refine its strategic plan. It may not be sure right now where it's headed.

- Right.

- In your transition discussions has that thought changed for you?

- Not really, I mean as I do more at the University of Wyoming I learn more and so that is very helpful because when I made some of my interview comments I said I would imagine this may be the case but I'm not sure. Now I'm learning more about it and I'll continue to do that. You know my take on the plan and sort of strategically where the university is going is that it's a great university and it has so much going for it. Great reputation good quality so there's a lot of really wonderful things in place but a university also needs a road map. It needs to know what's next where do we put our focus what are the priorities which helps them know where the resources should go as well and I sense that over the last few years that hasn't been refined or maybe fine-tuned to the point that you would want a strong land grant university to have so I do think there's an opportunity. I'm very excited to get going on it and what I would really love to do is engage the campus and the state in really looking at a five-year plan for the university where we can identify some very big and bold goals and then put behind it some metrics that we would like to follow so that we can really move the university forward. I think that it would really help the university if we could get that in place within the next year or so.

- As you're advancing in your planning what are the similarities really between the two universities South Dakota State and the University of Wyoming and then what are the striking differences

- Yeah.

- that you've learned about?

- The similarities are that well of course you've said we're both land grants and we are, so missions are very similar. In fact almost identical. The size is another thing that I would say is very very similar. South Dakota State has about 12,600 students. Wyoming is maybe like a thousand or so a thousand to 15 hundred students stronger than that larger but really when you're on campus we're about the same. We have about 10,000 students on campus at SDSU. I think University of Wyoming has between 10 and 11 thousand on campus so the size of the campus is similar and in many ways kind of the look and feel of the campus is highly similar. In fact I've told people when I'm at the University of Wyoming I feel sometimes like I'm at SDSU. So you would feel a lot of similarities if you went back and forth between the two campuses as well. I think the biggest difference is really what drives our economy and so I talked within my interview about the fact that regionally we're close to one another. Wyoming is right next to South Dakota. I think the people of the state are highly similar. We're both small states population-wise, we're very rural in nature very sparse so there's a lot of similarities there as well but what drives the economy is quite different. And of course South Dakota is just very agricultural. In fact agriculture really drives South Dakota and when agriculture is doing well South Dakota is doing well. When agriculture is not doing so well South Dakota suffers and I sense here and I do know because I'm learning it's energy here.

- Sure.

- So when energy's doing great, you're doing great Wyoming is and of course right now in the downturn it's much harder on the state.

- And we're going to continue that discussion on the web. For now Dr. Nichols it's a pleasure meeting you. I think the University of the State of Wyoming is excited that you're here and is excited about the future you'll bring to the university.

- Well thank you, likewise, so thank you.

- We'll continue this discussion on the web now but for all of our viewers next week on Capitol Outlook we'll really dive into the revenue picture of the State of Wyoming, not necessarily that revenues are declining but what the leaders of the Joint Revenue Committee are planning as to the future and how they will plan for state revenues. But for now to our members of Joint Appropriations Committee and to Dr. Nichols thank you for joining us on Capitol Outlook.