We are reviewing the fiscal process in the Mountain States to provide a resource comparing Idaho, Montana, and Wyoming. To help with this project, MSPC reached out to the budget office for each state. Here is my interview with Kevin Hibbard, Director of Wyoming’s State Budget Department, on the state’s fiscal process. The questions we posed are in italics.
Spending/tax limits – Does the state have a constitutional or statutory spending and/or tax limitation (i.e. supermajority requirement to raise taxes)?
Mr. Hibbard: “No, Wyoming does not have a supermajority requirement to raise taxes.”
Balanced budget requirements – Does the state have a constitutional or statutory balanced budget requirement?
Mr. Hibbard: “Yes, the state has a constitutional balanced budget requirement. Article 16, Section 2 says: ‘No debt in excess of the taxes for the current year, shall in any manner be created in the State of Wyoming, unless the proposition to create such debt shall have been submitted to a vote of the people and by them approved; except to suppress insurrection or to provide for the public defense.’
When building the state’s budget, agency requests cannot exceed forecasted revenue. The state budgets on a biennial basis.”
Restricted/protected reserves – Does the state have a constitutional or statutory requirement for restricted/protected reserves? If yes, is a certain percentage of revenues required to be automatically allocated to reserves?
Mr. Hibbard: “Yes, there are several restricted and protected reserves, and a percentage of revenue sources are dedicated to permanent funds also. Here is an example of where the tax sources are deposited.”
Non-partisan revenue forecast – Does the state have a non-partisan revenue forecast process? If not, how are revenue forecasts handled?
Mr. Hibbard: “Yes, as described by our Budget Data Book: ‘The Consensus Revenue Estimating Group (CREG) formulates anticipated state revenues, which are used by the executive branch and the Legislature in the budgeting process. These CREG forecasts occur in October, followed by the release of the October CREG report. The release of the October CREG forecast has been scheduled to provide final revenue information from the prior fiscal year and be proximate to the Governor’s development of budget recommendations.’ The January CREG report updates the forecast for the legislative session. Here is the most recent CREG forecast.”
Budget outlook – Does the state have a standing budget outlook process? If yes, how long of a time horizon does it cover?
Mr. Hibbard: “Yes, it is incorporated within the CREG. That forecast covers six fiscal years. As described by our Budget Data Book: ‘Wyoming’s state budget uses the prior biennium’s appropriation, also termed base budget, to arrive at a standard budget by modifying the base budget by a limited number of factors in statute or from language in the prior budget. Any further adjustments in the form of increases or decreases require a request by the agency, followed by a recommendation by the Governor, action by the Joint Appropriations Committee, and finally, approval by the House, the Senate, and the Governor.’”
Line-item veto/discretionary spending reduction authority – Does the Governor have line-item veto authority and/or the authority to reduce agency spending if a deficit occurs?
Mr. Hibbard: “Yes, line-item veto authority for bills that include appropriations. There is also a budget reduction measure in statute, and the Governor can reduce budgets.”
Tax structure – What are the main tax sources (and rates) for general fund spending?
Mr. Hibbard: “Here are the details from our Budget Data Book: ‘The general operations of State government and K-12 education are funded by five sources: sales and use taxes, severance taxes, federal mineral royalties (FMRs), ad valorem taxes, and investment income. Funds for the general operation of state government are collected and deposited into the state General Fund (GF) and Budget Reserve Account for distribution established by state law. The largest source of revenue for state general operations is sales and use taxes. Wyoming imposes a four percent statewide sales and use tax shared with the state, counties and municipalities . . .
Several major revenue streams and the distribution of revenues are governed by the Wyoming Constitution. As a result, there are constitutional limitations on the distribution of several major sources of revenue collected by the State. What is not included in the constitutional list is left for the Legislature to prescribe.’”
Audits – Does the state have an independent process for fiscal, compliance, and performance audits of state spending? What entity is responsible for the state’s federal single audit and ACFR?
Mr. Hibbard: “Yes, Wyoming's Department of Audit. Publication (ex. ACFR) examples can be found here.”
Performance-based budgeting – Does the state place high-level performance outcomes directly into the budget?
Mr. Hibbard: “Yes, and each Standard Budget and Exception Budget (deltas) require ties to the Strategic Plan. However, this is not what is commonly known as performance-based budgeting. Here are examples of how this works: Wyoming Budget Process and Instructions for Preparing Biennial Budget Requests 2025-2026.”
Credit ratings – What are the current credit ratings for the state?
Mr. Hibbard: “Here is the most recent report from S&P: ‘S&P Global Ratings' issuer credit rating on Wyoming (AA/Stable) is supported by the state's historical maintenance of very large fund balances, record of midbiennium adjustments in the event of revenue shortfalls, and low overall debt profile. These strengths are somewhat offset by cyclical components of the state's economic and revenue base, which is rooted in minerals.’”
Thank you, Mr. Hibbard, for your time answering these questions and your service to Wyoming.