Wyoming State of the State Address 2003

 

CHEYENNE, Wyoming - Jan. 15 - Following is the text of Gov. Dave Freudenthal's 2003 State of the State Address:

Upon us has been bestowed the opportunity to serve. To serve and to strengthen our citizens, our economy and the Wyoming community is our task----may the heavens guide our steps.

Mr. Speaker, Madame President, Senators and Representatives of the 57th Session of the Wyoming Legislature, Mr. Chief Justice and members of the Court, Fellow Elected Officials and Citizens of Wyoming. Good morning to each of you.

Please allow me to express my appreciation to the members of the legislature, especially the leadership of both parties, and my fellow elected officials for their kindness and cooperation in the week since the inauguration. I am working to adapt my belief and conviction about Wyoming's future to the form, limitations and tradition of government operation. I seek the patience, which perhaps only Providence can provide, to remember my term is actually four years. And this is the first of four legislative sessions.

I depart from the traditional format of itemizing the executive branch position on 20 or 30 legislative items. These remarks will concentrate on four matters---budget, education, developing the economy of Wyoming communities, and healthcare. The good news is this shortens my address. The bad news is you will be receiving additional communications throughout the session, either through correspondence or our legislative liaison process. And no doubt, it will ultimately include 20 or 30 items.

We gather under pleasant circumstances compared to nearly every state in the nation. Most states confront budget deficits far in excess of Wyoming's total budget. Thanks largely to the surge in mineral revenues in the recent past; we are not faced with the prospect of cutting budgets this year. Allowing for the five-percent budget reserve account, our proposed current expenditures and anticipated revenues essentially balance. However, the comfort of our relative prosperity may be short lived in light of the maturing capital construction programs. Capital construction programs for public schools, higher education, corrections and state facilities have been moving to the top of the state's agenda for many years. A review of the broad outlines of these construction programs gets us over a billion dollars very quickly. Within the next few years we will be called upon to make major decisions about the scope and funding of these programs. Much of the information and discussion is still developing, and final decisions on major capital construction programs may await next session. This is appropriate since this is a non-budget or general session for the consideration of the wider range of legislative matters and only limited, supplemental budget recommendations. The Budget Session of 2002, through debate and compromise, determined the biennial allocation of state revenues through June of 2004. My predecessor offered supplemental budget recommendations a little over a month ago. With your indulgence I will forward by letter, no later than Monday, my suggestions related to the supplemental budget recommendations. This budget letter will reflect limited changes in priorities, including a request for additional mineral auditors and funding for the Wyoming Natural Gas Pipeline Authority. Further adjustments reflect the fact that $19 million dollars of school foundation monies, profiled in December of 2002, are not available for general fund expenditure. Immediately following a special meeting of the State Building Commission set for Jan. 22, 2003, revised state capital construction recommendations will be forwarded to you on behalf of the five elected officials. I anticipate these recommendations being well within the current budget numbers.

EDUCATION---operating funds

Funding and operation of our public education system has occupied much of this body's and the state's attention for the last several years. While the debate sometimes centered on the role of the Courts, I believe most of the work was prompted by an honest desire to provide a quality education for our children. The Court's affirmation of education as a paramount priority was simply a judicial statement of a commitment shared by all branches of government. But it should be noted that education is not the only paramount priority of our citizens or the State Constitution.

The allocation of money followed the allocation of time. Our School Foundation guarantee for local schools system has risen from nearly $500 million dollars for school year 1992-93 to approximately $725 million for school year 2002-03. During the same time period, enrollment declined by 14,000 students. Based on interim committee work this funding commitment will be increased this session. I trust you will work towards the proper allocation of dollars and a fully funded system. Since most of this work is well underway, I believe it is appropriate for me to await your progress through the session. But as the session winds down, I hope you will join me and Superintendent Blankenship in a conversation about devising a course of action to improve the quality of education and avoid further litigation.

EDUCATION---capital construction

The Legislature established a School Capital construction program to perform a statewide survey of school construction needs and prepare a plan to construct those schools consistent with the needs of the state and the Supreme Court opinions. July of this year is the due date for the statewide survey. Within 90 days thereafter, the commission is to present its report on the needed construction and the associated costs. While we await the results of this work, the estimates of the statewide construction costs vary between $500 million and $1 billion. The scope of the construction program and its costs will not be defined until just prior to the next legislative session.

No one has identified the capacity to fund these construction costs within our current revenue structure while maintaining and sustaining our commitments to healthcare, economic development, local governments, higher education or the myriad of services our citizens now expect. This is particularly true given the already increased dedication of state revenues to the school foundation program. Absent an unexpected windfall, the structure we select to fund public school construction will define not only our options for the next four years, but the options of our citizens, Governors and legislatures for decades to come.

It is important to note that this is not an issue that must be resolved this session. Adequate funds exist for constructing the so-called "pipeline" schools. A forceful argument exists to delay a final decision on funding options until the Commission has developed the actual numbers after the July survey.

In the meantime our discussion about how to meet this financial obligation has been ongoing and should continue. The options appear to be: 1) the traditional reliance on property taxes to finance schools, 2) debt financing through the reallocation of existing revenue streams, 3) hope for a spike in mineral revenues or coal lease bonus payments or 4) some combination of these options.

In formulating a funding plan I would encourage asking the voters for their thoughts. As part of the 2004 general election, a proposal to fund at least a portion of the cost through a statewide property tax for school construction could be placed before the voters. In the absence of the Commissions report, I cannot estimate the number of mills such a proposal would contain. I would note that if we choose this course, we should also develop a more viable property tax circuit breaker to protect the elderly and those on fixed incomes. Placing the issue before the voters has at least two advantages. First, it restores to the individual voter the opportunity to be heard on school construction funding. Second, it provides a dedicated revenue stream for at least a part of the school construction program.

Age and experience have taught me to avoid claims of infallibility. I remain open to alternative suggestions and I know many viable ideas exist. I look forward to the discussion and hopefully to thoughtful compromise.

DEVELOPING THE ECONOMY OF WYOMING'S COMMUNITIES

Our economy remains stable with some signs of encouragement in the energy sector. But the extended drought, international events and an uncertain national economy make predictions of the future hazardous at best.

Progress continues to be made in formulating our economic development efforts through the Business Council and local economic development efforts. But we need a greater level of investment if we expect to be competitive.

One step is to address the need for community economic development infrastructure. I refer to the elements necessary to make a community business ready such as land, business parks, buildings, railway sidings, industrial roads, etc. These are the building blocks for communities that are business ready and prepared to offer attractive packages for expansion of existing business or new businesses. Unfortunately, as a state, Wyoming lacks the Constitutional capacity to match incentive packages offered by other jurisdictions. However, we can offset this problem by focusing our efforts at the local level. In proposing this local economy infrastructure program, I am not referring to the ongoing community needs associated with existing populations.

I propose we allocate $15 million a year over the next 10 years as a grant program to assist communities and counties in building Wyoming's economic development infrastructure. Let's make Wyoming's communities not only business ready but ready to compete for expanding and new businesses on a regional and national basis.

I had originally hoped to define a non-governmental entity to work with the Business Council to manage these funds. We have not been able to identify such a structure. So the proposal we will submit next week places the management responsibility in the business council which already manages other economic development programs. Any added costs for managing the programs would come from the $15 million annual allocation.

It is not enough to simply fund staff at the Business Council. We must give the communities and the Business Council the tools to actually expand the existing economy and compete for new businesses.

I also support a stronger voice and role for the travel/tourism industry within our economic development efforts. While I would prefer a cabinet level travel/tourism agency, the wisdom of the legislative leadership has persuaded me that the same goal may be achievable through strengthening and slight modification of the current structure. I will continue to work with them on this proposal.

Much sound and fury has been expended over the energy commission. Rather than replay this entire saga, let me offer this suggestion. The Commission has undertaken much work. And it makes no sense to throw the baby out with the bath water.

The Energy Commission itself should be modified to be a private sector commission and attached, as originally discussed, directly to the Governor's office. This approach allows the Commission to work towards finalizing its draft recommendations as well as work with the chief executive on policy implementation.

The supplemental budget narrative indicates the original million-dollar appropriation for the Energy Commission will be expended by December of this year. I have not chosen to support their supplemental budget request. If you choose to proceed with the funding, I would ask that a portion of the funds move with the Commission to the Governor's office. The remainder of the funds should be used to support the mineral sections of the Business Council. These resources could be devoted to working directly with businesses and individuals to advance value added minerals development. I would also allocate funds to the Commission on the Status of Women which is also located in the Business Council.

It remains my belief that the energy policy must originate with the Governor since he or she is ultimately responsible for its implementation throughout state government. We do not help the Business Council by adding policy controversies, which more appropriately rest with the Governor and the Legislature.

The most urgent and important proposal before you is the reactivation of the Wyoming Natural Gas Pipeline Authority. The Authority is requesting less than $300,000 this session. I support their request without modification or reservation. We are acutely aware of the magnitude and importance of the gas price differential problem. Let us not be penny wise and pound foolish in our efforts.

HEALTHCARE

Availability, price and quality of healthcare remain near the top of nearly every Wyoming family's agenda. Your legislative bill list mirrors the concerns of our families.

You have an array of proposals before you. I understand the operation and consequences of some of the proposals and some I do not. I look forward to learning and working with you on these matters. I have two specific requests in this area. The first relates to our role as an employer.

Wearing our employer hat, we set the health insurance benefit package for state employees. We face the same problems confronting other Wyoming employers. In addition, our state health insurance program is feeling the effects of an aging workforce and adverse selection. These problems were identified years ago by an Legislative Service Office Audit and our circumstance has not improved. We are now beginning to address the problem.

Historically, you have paid 100% of the cost of health insurance for employees, and they are then required to pay all additional costs for their dependents. My predecessor has recommended that we move in a new direction, by recommending to you that we - the employer - begin paying 75% of the cost of insurance coverage for all employees and their eligible dependents. I am recommending that we go a step further and provide 85% of the premium cost, leaving 15% to be covered by the employee.

I am requesting sufficient funding to make this change effective March 31 of this year. This raises the state insurance contribution from the prior recommendation of $16.6 million to $23 million.

We have also asked the state insurance program to identify internal reserves to fund a complete review of the program. I hope you will work with us to re-examine the state employee insurance program prior to the next budget session.

In Wyoming, individuals, families, businesses and governments are spending money, reducing benefits and tightening our belts chasing the ever-escalating costs of healthcare. A number of healthcare proposals are before this session and there will be more in the years to come. This problem is not going away. But the devil, and often times the money, is in the details. Too often our decisions are driven by anecdotal information or the need to act simply because --- "we have to do something."

I encourage your support of a Health Care Commission for the next several years and perhaps longer. A properly constituted and funded commission can build policy based on data, not anecdote. It can make sure we are stretching our dollars and building policy for decades not election cycles. I believe we can make common sense progress on complex issues from liability insurance to Medicaid, if we develop accurate information and engage our citizens on a continuing basis.

In closing, I would again thank you for allowing me to visit your chambers and speak with you. I would be honored to have any of you visit the first floor. The coffee pot is generally on, although I make no guarantees as to the quality of its contents.

I look forward to working with you in the coming months. May we always keep the well-being of Wyoming citizens foremost in our minds. Thank you.

 
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