Latest news with #LSRA
Yahoo
14-06-2025
- Business
- Yahoo
Wyoming lawmakers seek to eliminate SIPA, again, in effort to simplify budget process
CHEYENNE — Wyoming lawmakers will try again to eliminate the state's Strategic Investments and Projects Account (SIPA) in a continued effort to make the state's budget process more transparent for the public. Efforts have been made in past legislative sessions to eliminate Wyoming's many financial 'coffee cans.' In 2024, lawmakers successfully repealed the School Capital Construction Account and its related accounts. This year, the Legislature successfully eliminated the Budget Reserve Account (BRA) through Senate File 168 and nearly eliminated SIPA through the passage of SF 169. However, Gov. Mark Gordon line-item vetoed SF 169 and kept SIPA online. The governor maintained his long-term support of simplifying the state's budget process, but he disapproved of the Legislature's approach in SF 169. Gov. Mark Gordon Gov. Mark Gordon '(SIPA) was originally a compromise between a previous legislature and the then-serving governor,' Gordon wrote in his veto letter. He served as state treasurer in 2013, when SIPA was first created. 'The compromise recognized the value of the governor's authority to use some of the funds when making budget recommendations.' Gordon argued the original structure of the bill limited his ability to make budget recommendations. Currently, excess funds from the state's Permanent Mineral Trust Fund (PMTF) account are split evenly between SIPA and the state's main savings account (the Legislative Stabilization Reserve Account, or LSRA). SF 169 originally eliminated SIPA by July 2026 and transferred all excess funds into the LSRA. Wyoming statute prohibits the governor from proposing appropriations from LSRA in excess of the 5% statutory reserve account. In other words, he can't make budget recommendations from this account. 'It is a cagey strategy to undermine a long-standing compromise between the executive and legislative branches and breach the original intent of SIPA,' Gordon wrote. One effect of Gordon's veto removed the split of funds flowing into SIPA and LSRA; now, all excess funds go directly into SIPA, effective immediately. He reasoned this action is necessary, as he expects the state will see greater pressure to fund public schools with the passage of more tax cuts and diversions, along with falling oil and natural gas prices. 'The combined effects of these factors create substantial pressure on the general fund to cover any school funding deficit and still meet the ongoing costs of government,' Gordon wrote, 'as well as provide services to Wyoming families and businesses.' Impact of veto During the Legislature's Select Committee on Capital Finance meeting on Thursday, lawmakers moved to draft a bill similar to SF 169 and, in a sense, make it 'veto-proof.' Sen. Larry Hicks, R-Baggs, who was the primary sponsor of SF 169, said Gordon's veto 'left … quite a dilemma here.' 'The net effect of this line-item veto, if we allow this to stay in statutes the way it currently is, it zeros out the reserve accounts,' Hicks said. Sen. Larry Hicks, R-Baggs (2025) Sen. Larry Hicks, R-Baggs Legislative budget and fiscal staff provided a comparison of the two versions of the bill and their long-term fiscal impacts, based on numbers from the January long-term forecast of the state's fiscal profile. The SIPA transfers 45% of what it retains to the School Foundation Program (SFP) account, the state's main spending account to fund public schools. If the SIPA is entirely repealed, the SFP loses that funding. Before SF 169 was signed into law, the LSRA and SFP were estimated to receive $124.1 million and $369.4 million, respectively, from SIPA over a six-year forecast period. Under the version passed by the Legislature, LSRA was estimated to receive $191.6 million in that same time period. The SFP would receive a total of $111.4 million in the first two fiscal years, and then not receive anything starting in fiscal year 2027 with the repeal of SIPA. Under Gordon's vetoes, the SFP is estimated to receive $470 million over the six-year forecast period, and the LSRA will receive no funding at all. 'But I want to point out that, starting in FY 28 the (PMTF) reserve account can't guarantee the full amount, and it falls short by about $60 million,' said LSO senior fiscal analyst Polly Scott. 'As Sen. Hicks did state … the estimate is that the reserve account is depleted somewhere in (fiscal year 2028).' Under the version adopted by the Legislature, the reserve account's life is extended beyond the six-year forecast, Scott added, because the state is relying on it less. Lawmakers respond State Treasurer Curt Meier noted that the PMTF reserve account is acting the way the LSRA should act. He suggested removing the 1.25% guarantee from the PMTF reserve account into SIPA so it can 'function (as) what it was supposed to do.' 'You're spending money you don't have and then you're trying to catch up … so you can spend it in this year's legislative session,' Meier said. 'Let the reserve account stand on itself, rather than putting more pressure on it than what it can afford to bear.' Then, the Legislature could move the unrealized capital gains into the LSRA, he said. The LSRA already provides $100 million to the school spending account once it drops below a certain threshold. Sen. Tara Nethercott, R-Cheyenne (2025) Sen. Tara Nethercott, R-Cheyenne Chairwoman Sen. Tara Nethercott, R-Cheyenne, suggested also discussing lifting this cap from the LSRA into the SFP at the committee's next meeting in September. For now, committee members voted to draft a bill that eliminates the SIPA, with a provision to remove the 1.25% flow guarantee from the PMTF reserve account, and discuss it at the next meeting. 'The elimination of the SIPA account is important, I think, to the Legislature as a whole, in order to simplify and provide transparency to the budget process,' Nethercott said. 'Because the SIPA account has been butchered. It's been tortured ... and no longer serves its intended purpose, creating a transparency issue.'
Yahoo
04-03-2025
- Business
- Yahoo
Generational investment fund bill fails in Wyoming House of Representatives
CHEYENNE — A bill to create an investment fund that advocates have said could offset lost mineral revenue to the state has failed in the Wyoming House of Representatives. Senate File 197, 'Wyoming generational investment account-2,' was not debated on the House floor by a Friday deadline for bills on general file, but an amendment to another bill to create the fund was debated on second reading Monday afternoon. SF 197 would have created a perpetual trust fund with a $100 million transfer from the Legislative Stabilization Reserve Account (the state's 'rainy-day fund' — if available and based on a sliding scale dependent on funding in the LSRA — to the proposed Wyoming Generational Investment Account. Bill sponsor Sen. Ogden Driskill, R-Devils Tower, said the program would have been rolled out in two phases: First, it would have created the structure needed to create the fund, and then it would have rolled out a constitutional amendment so that investment earnings would be distributed 30 years after the initial contribution. 'You have to create the fund, and then go to the people and make it an inviolate trust,' Driskill said. Driskill said that while he was 'very disappointed' the bill did not hit the House floor by Friday night, he believed the idea would come back in a future session. 'It will come back, and I really believe it will come to fruition,' Driskill said. Calculations based on historical earnings indicate the fund would be worth around $30 billion in 30 years, according to Wyoming State Treasurer Curt Meier's office. But Rep. John Bear, R-Gillette, recommended the idea become an interim topic for study by the Joint Appropriations Committee. Meier said he believes there is support in the House for a constitutional amendment to create an inviolate trust, but an understanding of the bill and the program it would create 'was not there.' After the session, he said, he plans to conduct outreach to lawmakers and Wyoming residents about a generational investment account. 'We are going to go into areas where we didn't have a lot of support,' Meier said. 'We want to tell people the benefits of this idea.' Waiting a year or two to create the program doesn't mean that any long-term investment like that proposed in SF 197 cannot be realized, he continued. 'It could still pay off, but it would just be a year or two later,' Meier said. 'But if you have that steady stream of income, it opens up a whole bunch of opportunities that we don't have today.' Driskill said that SF 197 did include an effective date of three years out, so that leaders could agree on the framework of the program, but nonetheless, the measure did not make it past the House. 'We did that to have a chance to say, did we create the right framework? The right vehicle? And if we didn't, let's fix it,' he said. 'In the meantime, that would give us time to get ready to run a constitutional amendment.' Even without the creation of a new inviolate trust for the state of Wyoming this session, Driskill said he believes such a trust is crucial because when funding is short, those investment accounts are limited in use. In discussions this session about a Wyoming generational investment account, lawmakers have brought up the state's Permanent Mineral Trust Fund multiple times. According to the Wyoming Taxpayers Association, the PMTF was created in 1975 by a constitutional amendment that passed on the November 1974 ballot. The history of the fund dates back to 1968, when the balance in Wyoming's bank account had dwindled to only $80. Then-Gov. Stan Hathaway drafted a bill to institute a severance tax on minerals in the state. Legislators were reluctant to bring forward his proposal, however. The bill passed by a narrow margin, creating the first severance tax on minerals in Wyoming. Today, 30% of the state's general fund comes from interest on the PMTF, which has equated to a lower tax burden on residents. 'If we could have (spent) the Mineral Trust Fund, it probably would have been drawn down several times. I really feel strongly (a generational investment account) needs to be an inviolate trust,' Driskill said. House debates the idea anyway Monday afternoon, the House did have a chance to discuss the idea of a generational investment fund, although in a roundabout way. Rep. Steve Harshman, R-Casper, brought a second-reading amendment to Senate File 70, 'Investment modernization-state nonpermanent funds,' to create what he said was something similar to the fund under SF 197, but what he called an 'income tax prevention account.' Harshman also sponsored House Bill 107, 'Wyoming generational investment account,' a mirror bill to SF 197. That bill was not heard in committee of the whole in the House by a Feb. 10 deadline. 'Really, this is a simple way for us to get our existing money working harder,' Harshman said about his amendment Monday. Rep. Bob Nicholas, R-Cheyenne, said that in his eight years chairing the Appropriations Committee, he often faced discussion about impending budget shortfalls due to falling revenue from the coal, oil and gas industries. With that experience in mind, he said he would support Harshman's amendment. 'Our fundamental responsibility is to prepare for the future, for our kids and for their kids,' Nicholas said. But Bear said on the floor that the idea was vetted in the House Appropriations Committee, and that a second-reading amendment on a different bill was not the right way to resurrect the idea. SF 70, he said, restricts spending from the Wyoming Wildlife and Natural Resource Trust Fund, and the Wyoming Cultural Trust Fund. 'Now, what we are talking about is actually bringing a bill in for a whole different purpose, that died earlier in this particular session,' Bear said. Rep. Ann Lucas, R-Cheyenne, said she would oppose the amendment, because in addition to saving, the state must cut its spending. 'I've coached people on how to save money, and how to spend wisely,' Lucas said. 'I didn't hear anybody here say, 'Maybe we should cut spending some places.' I feel that no savings plan works without a controlled, reasonable spending plan.' Harshman's amendment failed on a 35-22 vote Monday afternoon.
