Freudenthal calls for local government funding

Gov. Dave Freudenthal will recommend that Wyoming spend the largest chunk of its available discretionary cash to help local governments, his office announced Wednesday.

Freudenthal announced that his proposed budget will call on the state Legislature to approve $300 million in new state spending early next year for local governments. That's in addition to $108 million the state would have to spend to continue local government funding at its present level.

The Legislature is scheduled to convene in February for its budget session.

Freudenthal suggested that a significant portion of his proposed local government funding go to housing infrastructure projects.

"Work force housing is one of the state's most critical economic priorities," Freudenthal said. "It can perhaps best be addressed by our local governments through the construction of additional infrastructure related to housing developments."

Freudenthal also recommends that the Legislature direct $40 million toward reimbursing local governments for the revenues they lost when the state repealed the sales tax on food early this year.

The state had put up $46.6 million a year to reimburse local governments for lost revenue through next June when it first imposed a temporary repeal in 2006. However, the Legislature so far has resisted calls from local governments to approve a permanent plan for how to reimburse them for lost revenues into the future.

Freudenthal stopped short of recommending how the Legislature should allocate the remaining $260 million in local government funding. He said he's not comfortable extending the current distribution system, but said he looks forward to working with lawmakers to develop a "rational distribution system."

Freudenthal's recommendations for local government funding don't include his recommendations of nearly $80 million for the state's Business Ready Communities program and $15 million for the Community Facilities program. Local governments are also projected to receive more than $430 million as their share of state sales and use taxes.

Freudenthal also said he will call on lawmakers to approve $200 million for state highway projects.

"This is not as much as proponents might have hoped," Freudenthal said of the highway funding. He said that the state may want to put up more money during the 2010 legislative session.

Mike McVay, administrator of the Budget Division at the state Department of Administration and Information, said Wednesday it will cost the state about $2.8 billion to fund the state government for the coming two years at the current level of services.

Meanwhile, the state's Consensus Revenue Estimating Group last month projected that the state will receive about $3.6 billion in General Fund revenues for the budget cycle that starts next summer, McVay said. After setting aside the required 5 percent budget reserves, he said that would leave the state an estimated $700 million for possible new spending in the coming legislative session.

Freudenthal plans to release his entire budget recommendation on Friday. He has already released portions this week. He has announced that he will recommend that the state use federal Abandoned Mine Lands money for the new School of Energy Resources at the University of Wyoming.

Wyoming's congressional delegation helped get Congress to order the federal government to pay abandoned mine land funds owed to the state. Over time, Wyoming would get $550 million.

Freudenthal has also announced that he recommends nearly $153 million for capital construction spending. A $55 million business college building at the University of Wyoming is his largest single proposed project.

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