Committee Meeting Information

November 2 & 3, 2005

Room 302 Capitol Building

Cheyenne, Wyoming

 

Committee Members Present

Senator John Hines, Co-Chairman

Representative Frank Philp, Co-Chairman

Senator Jim Anderson

Senator Cale Case

Senator Rae Lynn Job

Senator Phil Nicholas

Representative Rosie Berger

Representative Alan Jones

Representative Pete Jorgensen

Representative Larry Meuli

Representative Owen Peterson

Representative Colin Simpson

Representative Jane Warren

 

Committee Members Absent

None

 

Legislative Service Office Staff

Steve Sommers, Budget and Fiscal Section Manager
Bill Mai, Senior Legislative Analyst

Dean Temte, Legislative Analyst

 

Others Present at Meeting

Please refer to Appendix 1 to review the Committee Sign-in Sheet
for a list of other individuals who attended the meeting.

Co-Chairman Hines called the meeting to order at 8:05 a.m.

 

The following sections summarize the Committee proceedings by topic.  Please refer to Appendix 2 to review the Committee Meeting Agenda.

 

Approval of Minutes

Minutes from the June 1, 2005 Committee meeting were approved.

 

Department of family services – court ordered placements

Mr. Roger McDaniel, Director and Mr. Paul Yaksic, Administrator Financial Services, explained the funding shortfall expected for the court-ordered-placement of juveniles program. Please refer to Appendix 3 for additional information on this presentation. Mr. McDaniel explained to the Committee that the department had experienced unexpected growth in the number of placements, particularly in three or four counties, and coupled with increased residential costs, the program would not have sufficient funds to make it through the biennium. To remedy the situation, the department reduced provider contracts by 3.5% that will cover them through March of next year. It was their plan to then use $6.5M in child support trust fund monies to carry the program through the remainder of the biennium. In response to various questions from the Committee, Mr. McDaniel stated much of the problem arose from increased meth usage, and that some counties had more of a problem with that than others and that some counties provided funding to providers in their counties, thus a large disparity among counties with respect to funding shortages. He stated the legislature had always assigned a premium on local control with respect to local assessment teams and some areas of the state do a better job than others in providing services at a lower cost. In closing, the Committee asked the department to provide some additional information that might explain the differences between counties and to prepare comprehensive information on court ordered placements that includes not just DFS expenses, but expenses of the Department of Health and the State Department of Education and to present the information to the legislature and the judiciary. 

 

Mr. Bob Mayor from Saint Josephs Children’s Home in Torrington, Wyoming addressed the Committee and expressed concern over the 3.5% reduction. He stated that such a reduction could jeopardize several providers’ ability to stay in business and provide services. He further stated that in some counties, judges are being told there is little funding available and thus they are placing fewer kids. He stated that in those counties where there are no local governmental funds available, the providers are in danger of going out of business.

 

Department of health – medicaid budget re-organization

Dr. Brent Sherrard, Director and Mr. Bob Peck, Chief Financial Officer presented an overview of the Department’s plan to re-organize the Medicaid budget. Dr. Sherrard stated that while his department’s goal is to provide services as needed and required, those services must be provided in an accountable manner.  One step toward providing accountability will be to present the Medicaid portion of the budget in a more readable, more understandable fashion, one that allows the reader to see the entire Medicaid funding request in one appropriation organization. Mr. Peck stated the re-organized budget format reflects the management structure of the department. In response to questions from the Committee, Dr. Sherrard stated the current federal match rate for Medicaid is 54.7% and will drop to 52.8% next year. It is one of the lowest federal match rates of all the states, and a 1% change equals $7M to $10M per biennium. Dr. Sherrard stated that the match rate is not working according to theory in Wyoming. As income increases, theoretically the number of eligibles should decrease, but that is not the case in Wyoming. Please see Appendix 4 for a detail of the information provided by the Department.

 

The Committee urged the Department to continue to simplify and improve the budget structure of the department and to provide a spreadsheet at the upcoming budget hearing that would summarize the agency budget and provide a crossover comparison from the old format to the new.

 

Chief information officer legislation – 06lso0044.w4

Mr. Larry Biggio, Chief Information Officer (CIO), gave the Committee a brief description of the issue. Basically, the CIO has been created only in session laws since 2002 and there are some inconsistencies between session laws and statutes that need to be clarified. The proposed legislation does exactly that and defines the responsibilities and duties of the CIO as distinct from those of the Information Technology Division at A&I. Committee discussion centered on whether the University and Community colleges were considered part of the executive branch and whether these two entities and the Department of Transportation and the Game and Fish Department should be included in the bill, and if so, to what extent. The Committee instructed Mr. Biggio to meet with those entities and develop recommendations as to the extent of their involvement in the legislation and report back to the Committee. The Committee will take up the issue in December or January. Please see Appendix 5 for a copy of the bill.

 

state retiree health insurance benefits

Mr. Ralph Hayes, Administrator, Employees Group Insurance introduced Mr. Christopher Hulla of Buck Consultants who walked the Committee through the analysis performed by Buck. Buck performed a very detailed analysis that is included as Appendix 6 of these minutes. The report is also available on-line at http://personnel.state.wy.us. There are several options for establishing a funding mechanism for current employee’s health insurance when they retire. For details please see the above referenced report.

 

 Mr. Steve Facciani, representing retired Game and Fish employees addressed the Committee and thanked them for looking at the issue and hoped they could provide some help for the retirees. Mr. George Krell representing retired University of Wyoming employees addressed the Committee and also thanked them for any help they could provide. Mr. Anton C. Munari, retired professor, addressed the Committee and provided a chart that explained how inflation had seriously eroded his retirement stipend. Please refer to Appendix 7 for Mr. Munari’s presentation.

 

In closing, Mr. Hayes stated that the problem is really three-fold: 1. how to fund current retirees; 2. how to fund active employees who are close to retirement age; and 3. how to fund active employees who are further from retirement age. The Committee took no action on the issue.

 

permanent mineral trust fund – 06lso0045.c1

The Committee briefly discussed 06LSO0045.C1 which is a joint resolution to amend the Constitution to state that all funds deposited into the permanent mineral trust fund are inviolate regardless of the source of funds. There is a difference of opinion as to whether all funds in the permanent fund are inviolate or only those funds that are derived from the Constitutional 1.5% severance tax are inviolate. This resolution would allow the voters to decide whether to clarify the issue. The Committee voted unanimously to sponsor the resolution. See Appendix 8 for a copy of the bill.

 

Cochairman Hines recessed the Committee until 8:00 a.m. Thursday.

 

Cochairman Philp brought the meeting to order at 8:00 a.m.

 

k-12 insurance report

Mr. Ralph Hayes, Administrator Employees Group Insurance, and Ms. Lisa Ramirez, Buck Consultants walked the Committee through the report on K-12 employees health insurance. The intent was to examine school districts health insurance plans to see if it was feasible to require all districts to participate in a group plan similar to state employees group health. Buck Consultants preformed a detailed analysis that is included as Appendix 9 of these minutes and is also available on-line at http://personnel.state.wy.us. After listening to a detailed explanation of the report the Committee voted to have Mr. Hayes work with Great-West to develop a group plan for all K-12 districts, both as a part of the state plan and as a separate but similar plan.

 

hathaway scholarship report

Senator Tex Boggs walked the Committee through the Hathaway Scholarship report. This report and associated proposed legislation is included as Appendix 10 of these minutes. Senator Boggs explained the activities of the Education Merit Scholarship Committee and the associated proposed legislation that would implement the program. He explained the Committee developed four levels of scholarships. The Scholarship Committee is recommending the program be up-front funded rather than waiting for the statutory flow of revenue to fully fund the program and that an appropriation from the common school spending policy reserve account be utilized to fund operations until such time as the income from the fund is sufficient to fund operations. Mr. Rick Miller, Vice-President for Governmental Affairs for the University of Wyoming explained the model developed by the University to estimate participation and associated costs of operation. The model will be turned over to LSO to use during the upcoming session in the event parameters of the four scholarship levels are amended. See Appendix 11 for details of the model. The Committee took no action on the issue.

 

higher education endowment report

Former Governor Mike Sullivan and former Senator Irene Devin presented the higher education endowment report to the Committee.  Governor Sullivan and Senator Devin explained the activities of the Committee and gave a brief explanation of the report. See Appendix 12 of these minutes for more detailed information. The Committee took no action on this issue.

 

chapter 17 – base to standard budget report

Mr. Mike McVay, Administrator, Budget Division, A&I, walked the Committee through an example of the information contained in the Ch. 17 – Base budget report. Mr. McVay stated the report is required by statute and explains differences from previous appropriations by e-org for each agency to the requested standard budget by e-org for each agency. He stated that most of the Budget Division adjustments to the base budget were for appropriations that were made to the State Auditor for compensation and were subsequently transferred to agencies as necessary. He further stated that most agency adjustments were for position re-classifications and net to zero adjustment in order to more closely align appropriation requests to actual expenditures.

 

creg report – fiscal profile

Mr. Steve Sommers, LSO, gave the Committee a brief run-through of the October 2005 CREG report and resulting fiscal profile. Mr. Sommers  briefly stated that natural gas is the single largest contributor to the State’s revenue stream and is still susceptible to large price swings. While it appears we have achieved a new baseline price level in the $5 to $6 per mcf range, prices will continue to be volatile, thus revenue projections will be subject to change as a result. He stated that using current revenue projections, the Governor and Legislature should have $3.6B in available general fund and budget reserve account revenues for the 07-08 biennium and approximately $400M in the school foundation program account after funding the Hathaway scholarship/Higher education endowment programs. This should be sufficient revenue to additionally fund the recalibration of the school funding model.

 

committee planning session

Mr. Sommers outlined the December budget hearing plan. The Committee will meet December 12 through the 16 and attempt to hear many of the smaller more simple budgets. Mr. Sommers will prepare a schedule and inform the agencies and Committee what agencies will be scheduled in December. The Committee will begin work at 8:00 a.m. and work until mid to late afternoon. The Committee will meet again for two weeks beginning January 9 to continue budget hearings, then begin to work budgets Monday, January 23 and hopefully ending Friday January 27. Once the budget documents are received on December 1, a package of budgets for the first few agencies to be heard in December will be sent to Committee members.

 

There being no further business in front of the Committee, Cochairman Philp adjourned the meeting at 4:00 p.m.

 

Respectfully submitted,

 

 

 

Senator John Hines, Cochairman                                              Representative Frank Philp, Cochairman

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