Wyo. governor delivers State of the State address

CHEYENNE, Wyo. (AP) -- Gov. Matt Mead emphasized in his State of the State address Wednesday that Wyoming is in good shape overall, but it's time for immediate action on a range of pressing issues, including reining in state spending and whipping the state education system into shape.

Wyoming has billions of dollars in savings and is in a strong economic position, particularly compared with most other states, Mead said. However, lawmakers must contain state spending in the face of predictions that energy revenues will likely stay flat for years to come, he said.

"The standard budget has more than doubled over the last decade and that's an unsustainable trajectory," Mead said. Wyoming, unlike the federal government, will continue to live within its means and must draw the line at overspending, he said.

Mead is proposing 6.5 percent budget cuts for state agencies, not counting one-time project funding. The cuts amount to more than $60 million over the coming year from the $3.2 billion state funds budget the Legislature approved early last year.

In other financial proposals, Mead asked lawmakers to approve an increase in the state fuel tax to help pay for road construction. He's pushing for a 10 cent increase in the existing tax. The hike would raise more than $70 million a year for state and local road projects.

The governor said the state needs a steady source of highway funding so the Wyoming Department of Transportation can plan long-term projects. He said the state can't continue to dip into state general funds for funding basic road infrastructure.

Mead noted that out-of-state drivers would pay a large share of the increase in gas tax. If lawmakers won't increase the fuel tax, Mead says they should consider dedicating some of the mineral tax revenue that's currently going into state permanent savings for road projects.

Mead also urged lawmakers to look carefully at whether the state should accept $50 million in federal funds to expand the Medicaid system in the state. A Republican, Mead had joined other states in a largely unsuccessful challenge to the federal Affordable Care Act, which calls for the expansion.

Mead said federal officials have failed to answer questions from him about how to implement the expansion. He also has said he questions whether the federal government can live up to promises to pay for enlarging the program.

But Mead said the state should work over the coming year to look at what conditions would lead the state to accept the Medicaid expansion and create a health insurance exchange. An exchange would be an Internet site where state residents could shop for the best deal on health insurance.

In his draft budget submitted to lawmakers in December, he had suggested that the state reject the $50 million for the Medicaid expansion outright. In remarks to reporters after his address, he said he doesn't regard his position that lawmakers should study the issue as a change in position.

"The session is now, the Legislature is here now, so we need to figure out what is it we want and to make the pitch," Mead said. "Again, if I had to sign yes or no today, my answer would be no."

Also reacting to the prospect of flat energy revenues, Mead called on lawmakers to redirect roughly $130 million in annual state energy revenues that's currently going into permanent savings into the state's "rainy day fund."

Mead also wants to redirect some federal coal lease bonus funds into the rainy day fund where it could be spent on state projects and operations instead of on school construction. He called for lawmakers to put money that's raised from rebalancing holdings in the Permanent Mineral Trust Fund into the rainy day fund.

Mead reserved some of his most pointed words for his remarks on the state's education system. There's been open friction over the last year between lawmakers and state public schools Superintendent Cindy Hill.

"We are mired down with disputes that are not necessary. We are frustrated," Mead said. Instead of addressing the pressing issues such as graduation rates, and addressing school violence, he said the state is wasting time and money wrangling with problems that should and can be avoided.

Some lawmakers say Hill's office has failed to complete some tasks of the state's ongoing education accountability effort. They say her administration has hindered the work of other boards and panels working on education reform.

Lawmakers this session will consider bills aimed at increasing their ability to assert more control over the education accountability effort.