Revenue Forecast and the CREG Report: What it Could Mean for Wyoming Education
Wyoming's Joint Appropriations Committee met this morning to review the updated January Consensus Revenue Estimating Group (CREG) report on revenue forecast for the state of Wyoming for the fiscal year 2020 to the fiscal year 2024. The report notes that despite adjustments made to the Governor's budget, all appropriations that were recommended by the Governor could potentially be fulfilled. The upcoming legislative budget session will determine those proposed appropriations.
Of note were the necessary adjustments to the Governor's budget. K-12 enrollment for the school year 2019-2020 saw a substantial increase: Wyoming schools welcomed 803 new students, most of whom enrolled in Natrona, Laramie, and Campbell Counties. The increase in enrollment has budget impacts in that it triggers an automatic increase for the School Foundation Program (SFP) fund, which CREG estimates to be a potential increase of around $30 million. These additional funds would be transferred from the Legislative Stabilization Reserve Account (LSRA), better known as the "rainy day fund." This adjustment also impacts the fiscal note of the proposed external cost adjustment (ECA), slightly increasing the inflation adjustment from $38 million to roughly $38.7 million.
The estimated revenues generated from natural gas were also adjusted downward, decreasing FY 2019-2020 biennium revenues for K-12 funding by $7.5 million and $16.2 million in the FY 2021-2022 biennium. The downward adjustment was made due to lower natural gas price projections.
As per the Governor's budget, all of the revenue shortfalls to fully fund education for the FY 2019-2020 biennium will be funded by transfers from LSRA. The Appropriations Committee demonstrated obvious concern about the lack of sustainability of funding education through LSRA. If funding in this manner continues, eventually, the "rainy day fund" will be completely drawn down. During the presentation of his budget, Governor Gordon emphasized the importance of diversifying Wyoming's economy.
"The Governors proposal of utilizing revenues from the "rainy day fund" is the appropriate and sound fiscal policy for the current biennium," said WEA President Kathy Vetter. "However, if the state of Wyoming and the legislature prioritize and value Wyoming's remarkable education system, it will work diligently to heed and fully realize the recommendation of the Governor to diversify and strengthen Wyoming's economy. We must identify stable and diverse revenue streams for Wyoming education."