In the State Budget the Legislature and Governor Mead directed state agencies to prepare cuts to their budgets of 4% for fiscal year 2014, but with natural gas prices moving still lower Governor Mead has now asked them to be ready with proposed 8% reductions.

“Wyoming is very fortunate to have amazing resources and all of us benefit, but we are subject to price fluctuations in the commodities market and especially natural gas price fluctuations, Wyoming and our government are nimble and with this belt tightening we will continue working to make state government as efficient as possible.”

On top of asking state agencies to prepare for cuts by the end of this year the State Legislature also asked the agencies to prepare cuts of 8% for the next biennium. A reduction of 8% would result in a cut of $74.5 million dollars from the budget in fiscal year 2014, which starts on July 1st, 2013. Governor Mead has also asked state agencies to immediately institute a cap on staff positions. This can stem spending now. The Department of Health is exempt from preparing cuts because the Legislature has already directed the Department of Health to make 4% cuts. The instruction to other agencies is to prepare potential cuts. Governor Mead talks more about the cuts.

Natural gas production provides the single largest source of revenue to the state. Wyoming analysts forecast future revenue and that forecast, as of January, predicts $3.25 per million cubic feet (mcf) for natural gas in 2012. The price is currently at a 10 year low, below $2.00/mcf. If this lower price holds through the end of 2012, it could mean a reduction in over $125 million of revenue to the general fund.