Livestock Board floats potential brand fee increaseWritten by Jennifer Womack
Wyoming Brand Commissioner Lee Romsa told Livestock Board members at their April 2 meeting that the brand inspection program budget has a healthy outlook through the current biennium that ends in 2010. Beyond that, further declines in the state’s cattle numbers could jeopardize the agency’s ability to bring in the $2.5 million needed annually to keep the program running.
“Due to reduced numbers we’re going to need to make some adjustments in the program,” said WLSB Director Jim Schwartz in an April 6 interview with the Roundup. Given the reduction in livestock numbers, he said it’s likely fees, including those paid on cattle inspections, will need to be increased.
For the current Fiscal Year, which ends June 30, 2009, the brand program is expected to bring in roughly $2.5 million with expenditures predicted to reach $2.27 million. In 2008, inspections were done on roughly 1.46 million cattle, 331,000 sheep, 25,000 horses, 4,000 goats, llamas and alpacas and 4,100 hides for a total of about 1.83 million inspections.
“This is the first year total inspections have been under two million head,” said Romsa. “By comparison, our peak year was 2000 when we looked at 2.8 million head. Our average over the last 11 years has been 2.26 million, so by any standard last year was way down in numbers,” said Romsa. “Although we are currently in good financial shape, we can’t keep seeing decreased numbers without making changes.”
The number of Wyoming cattle inspected declined by nine percent between 2007 and 2008, said Romsa in what has been a nearly decade long trend. Meanwhile costs remained largely the same with the number of inspections dropping by a comparative 3.5 percent since inspectors are making about the same number of visits to look at fewer total animals. Romsa said the brand inspection program’s costs are 90 percent salary, benefits and mileage with printing and other charges making up the remaining ten percent.
Planning for a worse case scenario of cattle numbers continuing to decrease at a rate of 10 percent per year, Romsa proposed a series of fee increases to the board. (See chart) While there are a few exceptions, such as the G Form on cattle destined to South Dakota salebarns, most of the agency’s fee increases are capped in statute at a maximum increase of 20 percent per year. Romsa did not propose an increase on the A Form rate, but a potential fee increase will be discussed at the next WLSB meeting.
Schwartz said it’s an area that will have to be considered since cattle inspections are the largest aspect of the program.
While not on the chart included in this article, an increase in the H Form rate was discussed. The cost now associated with the H Form is $12 for the first 10 horses and $1.50 for each horse thereafter. Among the considerations discussed in May will be increasing the number of head at which the reduced rate inspection kicks in.
Fee increases proposed by Romsa would generate an additional $75,715 for the state’s brand inspection program. Beyond the fee increases, Romsa mentioned several other revenue generating ideas.
Romsa said the board could seek an increase in the three percent cut they now charge the Wyoming Beef Council as payment for collecting the $1 per head Beef Checkoff. A similar agreement with the state’s predator boards is outlined in statute and would require legislation to change.
He also said there is strong support among the state’s brand inspectors to do away with the out-of-state range permits and require full inspections on the roughly 40,000 head of animals that are currently moved under that program at a rate of $0.38 per head. “The brand inspectors don’t like the out of state range permits,” said Romsa, “because they are a full brand inspection. We do all the work, yet only collect 25 percent of the fees of any other inspection. It is an equity issue.”
Charging at least $1 for in-state G Forms, said Romsa, could generate some funds for the agency. The WLSB doesn’t currently charge for the forms, but pays those who write them $1 per form they fill out.
Romsa coupled the proposed increases with cuts in the program including a reduction in the number of full time brand inspectors from 60 to 58. Although not yet notified, two brand inspectors have been identified for dismissal prior to July 1, 2009. Romsa said each position costs the agency about $30,000 annually.
“Aside from the brand inspectors,” said Romsa of Cheyenne office positions, “there are two fiscal positions in the brand inspection program and no support staff positions. One handles all of the accounts receivable plus auditing, Beef Council and predator fees plus filing inspections. The other handles accounts payable such as payroll, human resources and other duties. It’s a massive job for those two positions.” Romsa’s position is funded out of an account separate from the brand inspection program.
Also proposed by Romsa is a requirement that inspectors be given 24 hours notice on inspections. Such a measure, he said, would allow inspectors to more efficiently plan their travel routes and prevent making multiple trips out for inspections on any given day. “A five percent decrease in mileage,” he explained, “would save the program $17,000 annually.”
“I’d love to do it by attrition,” said Schwartz, “but I don’t know of any brand inspectors ready to retire.” Earlier this year he asked the Attorney General if the agency could offer a $5,000 retirement bonus to retirement ready inspectors, but said he was told such any action would be unconstitutional.
Romsa said board members would have the opportunity to further review his recommendations, including whether or not to reduce the brand inspector staff, at their next meeting. In the meantime, the Board instructed agency staff to seek public feedback prior to a formal discussion on fee increases, which would require amendment of the agency’s Chapter 9 rules. While a specific date hasn’t yet been set, the Livestock Board’s next meeting will take place mid-May in Casper.