CHEYENNE — Gov. Matt Mead says it’s clear that Wyoming would take a big financial hit if Congress fails to reach a deficit-reduction agreement to avert the end-of-year “fiscal cliff.”
As time grows short, governors around the country are facing the prospect that failure to reach an agreement would see income taxes rise next year and deep cuts in federal spending on defense and other programs. President Obama and House Republicans have been wrestling the issue since last month’s presidential election.
“At least from my standpoint, we recognize that there’s got to be cuts, and I also recognize I think there’s got to be additional revenue,” Mead told The Associated Press on Thursday.
With federal dollars helping to support all sorts of state government operations and programs, Mead, a Republican, said totaling up what the state stands to lose in the event Washington can’t reach an agreement would be an enormous task. And he said it’s not a task he’s inclined to have state government undertake unless events make it necessary.
“I think of all the ways the federal government is intertwined with state finance,” Mead said. “Department of Education, we get a huge amount of money from the federal Department of Education. Workforce Services, we get a lot of federal money. Certainly the Guard, certainly highways. Health care, my gosh. Outside of Medicaid issues, think of the programs that could be affected.”
Mead last week submitted his own state budget proposal to state lawmakers who will convene in January. He’s calling for diverting some energy tax revenues away from the state’s permanent savings into the accessible “rainy day account.” He said he wants to position the state for maximum flexibility both because of slack state revenue forecasts and also because of uncertainty at the federal level.
Mead’s own state budget calls on state agencies to cut spending by roughly 6.5 percent, or more than $60 million, starting in the fiscal year that begins next July. While his office has been going over state agency budgets to identify potential cuts since this summer, he said he’s concerned that the threatened federal cuts would be done indiscriminately.
“Should we cut the Department of Defense 10 percent, or is it 5 percent? Or should we cut Health and Human Services 3 percent or 7 percent? And where are we going to cut?” Mead said. “And I think that is part of the fear of the fiscal cliff. Certainly it’s the cuts, but I think more concern is it’s just that it’s not thought out and what is going to be the impact.”
Mead said he and many other governors talked on Wednesday with Vice President Joe Biden, the second such group phone call among governors and the vice president in the last two weeks. Mead said the White House apparently is hopeful that governors will be able to impress upon their state’s congressional delegations and others the importance of reaching an agreement.
“It was a closed meeting, so I won’t give you quotes,” Mead said of the call with Biden. “But I will say that it’s clear that the vice president and the White House recognize that it’s clear that this impacts a lot of what happens in the states. And it’s clear that the governors, Republican and Democrat alike, I would say almost universally, are hoping that something gets done.”