Rainy Day fund to be spent on athletics

[BeaverPoke]

Did someone already post this? If so, my bad.

I read that Gov. Mead announced the Wyo rainy day fund is to be spent on Wyo athletics.

Isn't this what many of us have been hoping for for a LONG time now?

 

[wyokoke]

Is it a done deal now? I think it was mentioned before as a possibility but not a certainty. That could be HUGE though

 

[SnowyRange]

State in a hiring freeze. Have to cut $200mm from the budget. Some of that has to come out of UW's hide, and that follows a 6% budget cut for UW two years ago.

That dip into the "rainy day" fund for UW athletics will have to come over a lot of people's dead bodies.

 

[OrediggerPoke]

The legislature is the branch of government responsible for spending 'rainy day' funds. Governor Mead simply can submit a budget request. The legislature will convene in a few months.

Not gonna happen this year when the state is facing a deficit of about 200 million with current energy prices.

 

[stymeman]

my only ? is where did this shortfall for Budget for the State, overall, truly come from, where they may need to dip into rainy day fund, guess the energy industry being down and good things in the past, all that extra spending is coming back to haunt us, don't really understand, guess we live in a feast or famine era anymore

 

[McPeachy]

The legislature is the branch of government responsible for spending 'rainy day' funds. Governor Mead simply can submit a budget request. The legislature will convene in a few months.

Not gonna happen this year when the state is facing a deficit of about 200 million with current energy prices.

^ Agree with this.

On a side / related note, not sure "Wyoming" will ever allow funding of athletics over funding of academics. If the state has a $1 in their pocket to spend, $0.99999 of that dollar will go to education before anything is even debated to go to athletics.

 

[ragtimejoe1]

The legislature is the branch of government responsible for spending 'rainy day' funds. Governor Mead simply can submit a budget request. The legislature will convene in a few months.

Not gonna happen this year when the state is facing a deficit of about 200 million with current energy prices.

^ Agree with this.

On a side / related note, not sure "Wyoming" will ever allow funding of athletics over funding of academics. If the state has a $1 in their pocket to spend, $0.99999 of that dollar will go to education before anything is even debated to go to athletics.

Largely because our administration has failed to demonstrate, articulate, and otherwise explain how athletics can boost academics and the University community as a whole. I wonder whose job that is?

 

[Cornpoke]

If only the state would realize investing in athletics gets you more per dollar in the long run than directly investing in academics. Look no further than Boise st to realize how investing in athletics first has increased academics. Now donations flow in, more school pride, expanding campus, increased applications rates, etc. It all goes hand in hand!

 

[McPeachy]

If only the state would realize investing in athletics gets you more per dollar in the long run than directly investing in academics. Look no further than Boise st to realize how investing in athletics first has increased academics. Now donations flow in, more school pride, expanding campus, increased applications rates, etc. It all goes hand in hand!

Amen.

The examples I always refer to:

1. Look what happened at UNLV after they won a National Championship in basketball.
2. Look what happened at Utah after they hosted the Olympics.

 

[McPeachy]

The legislature is the branch of government responsible for spending 'rainy day' funds. Governor Mead simply can submit a budget request. The legislature will convene in a few months.

Not gonna happen this year when the state is facing a deficit of about 200 million with current energy prices.

^ Agree with this.

On a side / related note, not sure "Wyoming" will ever allow funding of athletics over funding of academics. If the state has a $1 in their pocket to spend, $0.99999 of that dollar will go to education before anything is even debated to go to athletics.

Largely because our administration has failed to demonstrate, articulate, and otherwise explain how athletics can boost academics and the University community as a whole. I wonder whose job that is?

No doubt about it - athletics are the front porch of the university (in ours, and many others cases). I am a firm believer in that, and that investing in athletics (and winning) will increase enrollment to a level none of us could probably fathom. But then I also reflect on the fact, that maybe, good 'ol Wyomin doesn't want to boost enrollment...you know what I mean?

 

[Cowboy Junky]

Up until about 2 years ago, I would have agreed there's no way to tap into the rainy day fund for athletics. I think Sternberg changed all that. After the Sternberg driven athletics report, the climate has changed in Wyoming. With Mead as governor and a couple of key players in the state government, he did get us 5 million for budget increases recently.

I think there's a decent chance this goes through. It won't become a permanent item, but I could see them approving matching funds for budget increases again as a one time item that will be have to be approved again at a later date.

 

[OrediggerPoke]

my only ? is where did this shortfall for Budget for the State, overall, truly come from, where they may need to dip into rainy day fund, guess the energy industry being down and good things in the past, all that extra spending is coming back to haunt us, don't really understand, guess we live in a feast or famine era anymore

Our state is more dependent on energy commodity prices than any other state including Alaska. We have no state income tax and do not tax groceries; where do you think the majority of revenues come from? A year ago oil was near $100/bbl, gas was at $4.30/mcf and coal was around $60/short ton.

Fast forward a year later...demand for coal continues to decline with the abundance of natural gas from shale plays. Demand for natural gas from Wyoming's has entered a strong decline period with unbelievable East Coast Marcellus production and the 'coal bed methane' play has all but washed up due to cost prohibitions. Oil prices have been range bound between $40-$50 this year, natural gas has been around $2.40/mcf and coal has been around $40/short ton. Take this all together and income from our resources (royalties and severance taxes) has dropped nearly 40% year over year.

 

[TheCup]

And this is only the beginning. The state isn't even close yet to feeling the full impact of the downturn.

This isn't a conspiracy theory, this is just the way things are. Wyoming's budget lags about three years behind commodity prices. Because of the complexity of the state's mineral tax code, the final tax bills from energy companies oftentimes aren't settled for three years or more (I could fill pages on the audit process and why this is). But basically, much of the actual hard dollars coming into the state and counties right now through severance taxes from oil and gas are based on production a couple years ago.

Worse than that is that oil production in the state is actually up about 17% over last year despite depressed prices and the lack of new drilling. Efficiency has simply gotten too good in a lot of cases. Many of the wells in the state begin to decline after a few years, meaning about three years from now we're going to see all of this current production out of wells already completed slow down. That will be compounded by the fact that there is almost no drilling activity happening this year and next.

The state's economists are well aware of this, as are policymakers. Numbers being talked about around the capitol go so far as saying there might be a short fall in the 18-19 budget cycle of up to a third of the state's budget. And it could get worse than that.

So basically, state support for everything is going to go down over the next few years, athletics included. And no elected official is going to vote to spend dollars on athletics a few years down the road if the state is also talking about reductions in jobs.

 

[OrediggerPoke]

And this is only the beginning. The state isn't even close yet to feeling the full impact of the downturn.

This isn't a conspiracy theory, this is just the way things are. Wyoming's budget lags about three years behind commodity prices. Because of the complexity of the state's mineral tax code, the final tax bills from energy companies oftentimes aren't settled for three years or more (I could fill pages on the audit process and why this is). But basically, much of the actual hard dollars coming into the state and counties right now through severance taxes from oil and gas are based on production a couple years ago.

Worse than that is that oil production in the state is actually up about 17% over last year despite depressed prices and the lack of new drilling. Efficiency has simply gotten too good in a lot of cases. Many of the wells in the state begin to decline after a few years, meaning about three years from now we're going to see all of this current production out of wells already completed slow down. That will be compounded by the fact that there is almost no drilling activity happening this year and next.

The state's economists are well aware of this, as are policymakers. Numbers being talked about around the capitol go so far as saying there might be a short fall in the 18-19 budget cycle of up to a third of the state's budget. And it could get worse than that.

So basically, state support for everything is going to go down over the next few years, athletics included. And no elected official is going to vote to spend dollars on athletics a few years down the road if the state is also talking about reductions in jobs.

Nice summary!

You are also absolutely correct that oil production in Wyoming will probably fall off of a cliff unless the price of oil substantially recovers and costs are reduced making drilling new horizontal shale/tight sand wells profitable. All of the increase in oil production in Wyoming has come from wells with dramatic decline curves (i.e. these wells will be lucky to produce 1/10th in year 3 of the oil it produced in year 1).

 

[WYO_Fan_inPA]

my only ? is where did this shortfall for Budget for the State, overall, truly come from, where they may need to dip into rainy day fund, guess the energy industry being down and good things in the past, all that extra spending is coming back to haunt us, don't really understand, guess we live in a feast or famine era anymore

Exactly. I agree. Why not just "save" the money for an emergency or future need? Does not make a whole lot of sense the state would spend the $ now..

 

[joshvanklomp]

Can someone please explain to this outsider what the Rainy Day fund is....

 

[fromolwyoming]

Can someone please explain to this outsider what the Rainy Day fund is....

In short, it goes back to the 1920s (the reason for it). Everyone knows the stock market crashed in 1928, beginning the Great Depression. Well, for 4 years prior, Wyoming had hit it's own Depression ahead of the rest of the country. Things kind of went to shit for awhile, longer than the rest of the country. When the US emerged from it, Wyoming set up an account to put in money that was not used to pay bills, fix infrastructure, etc, so that it would be there in case everything crashed again. Right now, there is over $1billion in there while collecting interest as well.

 

[Douglaspoke]

It is 1.8 billion and set up in the last 15 years.. a small increase in funding from this fund of even 10 million would be minuscule. 10 million would be able half of one percent. Approx 50 cents on $100.
4 bits

 

[elfletcho]

The rainy day fund is peanuts. You guys know the state has 19 billion invested right?

http://treasurer.state.wy.us/investmentsbank.asp" onclick="window.open(this.href);return false;

Sure it took a hit recently but the state has made a ton of revenue off of this.