The way state Rep. Lloyd Larsen, R-Lander, sees it, the $1 billion-plus windfall coming to Wyoming through the American Rescue Plan Act is a little like an inheritance from grandma.
It’s an unexpected, huge sum that can change the arc of life ahead: The two $523 million stimulus payments together are equal to over 40% of the $2.3 billion budget that Gov. Mark Gordon has proposed for 2023-24. And nearly half those funds qualify as “revenue replacement,” which means they can be saved, invested or used with minimal restrictions.
“Do I go out and squander it by taking a fishing trip to Alaska, as much as I want to do that?” Larsen asked. “Or do I invest it so I get a better return on my retirement? Or maybe I pay off my house? Those are the choices.”
Larsen, who’s on the Wyoming Legislature’s Joint Appropriations Committee, will be party to the debate over what ought to become of the one-time infusion of cash. Proposals have thus far mostly eschewed using the funds to supplement the biennial budget or backfill past cuts. Upcoming choices, Larsen anticipates, will center around savings and investments in programs intended to buoy the state’s long-term economic prospects.
“The one thing we will avoid is the fishing trip to Alaska,” he said, “because we don’t want to squander it.”
A monthslong planning effort led by a Gordon-assembled “strike force” preceded the committee’s ARPA funds deliberations, which begin last Friday. That effort entailed a call for proposals from state agencies, county and municipal governments and others. Collectively, participants pitched nearly $4 billion worth of ideas, four times more than is available, said Sen. Drew Perkins, R-Casper, who chairs the appropriations committee.
Based on the proposals submitted and guidance from his strike force of cabinet members, legislators and local elected officials, the governor has made specific recommendations for how to use about $500 million of the stimulus funds.
The suggested spending is tailored to Gordon’s “Survive, Drive and Thrive” plan, aimed at helping Wyoming pull out of the pandemic with a focus on the state’s health care, social services, education, workforce, and economic diversification and development.
The largest slice of Gordon’s recommendations would go straight into savings: $150 million of the more-flexible “revenue replacement” dollars Wyoming was awarded would be socked away.
The next-largest specific proposal is for more than $100 million to be set aside as a potential match for further funds for continued energy development such as a commercial-scale carbon capture and utilization project. In the meantime, the nine-figure sum would sit in the Legislative Stabilization Reserve Account, commonly called the rainy-day fund.
“We’re hopefully turning that $105 million into maybe five, 10 times more than that,” Wyoming Business Council CEO Josh Dorrell told attendees of last Friday’s virtual meeting.
Other recommended projects range from $125,000 in matching grants for humanities-based programs to a $75 million addition to the Wyoming Wildlife and Natural Resource Trust.
“I think the governor’s got some really good ideas in there,” Sen. Larry Hicks, R-Baggs, told WyoFile. “Those things that we really like, we’re probably going to support him 100%. And those things that we have concerns with, we’ll probably negotiate a middle ground.”
After the recommendations are initially carved up in the Joint Appropriations Committee, which Hicks sits on, the spending and savings plan will have to pass muster with the whole Legislature.
Hicks, Larsen and Rep. Andy Schwartz, D-Jackson, told WyoFile that they’d consider funneling some ARPA funds toward the $4 billion Common School Permanent Lands Fund, which generates investment income for K-12 education. The stimulus dollars can’t be invested directly but can be spent on government functions that allow an equivalent amount of general budget money to be squirreled away into permanent funds.
Investment income from a hypothetical $200 million contribution to the school fund, Hicks said, could fulfill about 10% of the $200 million annual shortfall in funding needed for K-12 education across Wyoming.
“We have a structural deficit that’s going to eat our lunch if we don’t come to grips with it,” Hicks said.
Used wisely, Larsen said, the unanticipated 10-figure sum from the federal government could “help drive the state’s direction for the next century: “We have an opportunity to help broaden or smooth out the path of Wyoming going forward for generations to come with programs and investments that won’t disappear in six months,” he said.
WyoFile is an independent nonprofit news organization focused on Wyoming people, places and policy.