The Wyoming Legislature will have a little less money to work with in the upcoming 2024 Budget Session, according to a report presented to lawmakers Friday by the state’s official income forecasters.
Known as CREG, the Consensus Revenue Estimating Group makes revenue projections in October to coincide with the governor’s budget preparations and then revises those numbers in January to provide the latest data closer to the session. Friday’s report is the latter.
The report’s most important number is the $13.3 million decrease to the General Fund and the Budget Reserve Account, CREG Co-Chair Don Richards told the Joint Appropriations Committee. The two accounts are the primary funding sources for state programs and services.
The reduction was due to a combination of factors, including decreased mineral prices. As a result, if lawmakers follow Gov. Mark Gordon’s lead, they will have approximately $37 million in discretionary funds as opposed to the $50.3 million in the chief executive’s budget recommendations.
While the dip in revenue was modest — with a total biennial state budget of roughly $9.9 billion the reduction amounts to about .1% — forecasters continue to warn of a shaky financial future, particularly for mineral revenues.
“Looking forward, volatility in prices is anticipated to continue as a result of geopolitical events, global and domestic economic performance, export volumes, production levels, and, importantly for natural gas prices in particular, weather,” the report states. “The lack of sustained cold temperatures in most areas of the country so far this winter is providing downward pressure on prices through [calendar year] 2023 and at least the first part of [calendar year] 2024.
Altogether, the report reinforces the importance of a conservative approach to budgeting, Gordon said in a statement.
“With the possibility of our minerals commanding lower prices, leading to reduced severance tax revenue, Wyoming may need to lean harder on investment income,” Gordon wrote. “Placing surplus revenues into savings ensures Wyoming is well prepared for the challenges facing our legacy industries due to Biden Administration policies.”
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Forecasters increased their projections for General Fund sales and use tax collections by $10 million, pointing to industrial projects like a new wind power facility in Albany County.
“Activities from wind farm construction and mineral exploration continue to boost tax collections in other related sectors such as transportation, construction, and business services,” the report states.
As for oil production, the report revised its earlier prediction upward by 5 million barrels through the end of 2023. However, forecasters are also expecting oil prices to decrease from $80 a barrel to $75 in 2024 due to “the current weak market for both oil and natural gas.”
“On the other hand, CREG adjusted Wyoming surface coal production downward by 5 million tons in [calendar year] 2023 to 235 million tons, mostly due to weaker than anticipated gas prices (natural gas is a competitor of coal for power generation) and robust coal stockpiles,” the report states.
Additionally, forecasters lowered their estimates for both trona production and prices.
“Overall, CREG believes the October 2023 assumptions and forecasts for all mineral prices beyond 2024 and production after 2023 remain reasonable,” the report states.
The Appropriations Committee will continue to meet throughout this week in Cheyenne to develop the draft budget. The full Legislature will kick off the session on Feb. 12.
Charles Randolph. Candidate for Wyoming House District 4.
This is why it is so important to get with the program and begin to move the discussion off just coal, oil and gas and begin now to discuss our ability to produce the minerals and elements of a 21st Century economy that appear to bee in great abundance in this state. This article mentioned the five major minerals and fossil products we have very good reserves of but usually with a detrimental environmental cost. But I did not see a single word about the seventeen elements on the periodic table that appear not to be worth millions or billions but are in multiples of trillions. We have them but a still not received in the public eye as the real mineral wealth that is our true future that will lead to a healthier economy and cleaner environment in the long run. I’ve heard it will take ten years to make this work but these rare earths as they are known are already in short supply, controlled in many ways by people not our friends and not right inside our own borders. The Wyoming House 4th District will play a vital roll in both the mining and processing of these already declared strategic minerals both because of it’s close location and a capable, willing workforce that will pay good and be possible to keep our youth here instead of moving out of state only to return in retirement. I believe we should have started the day after we verified this geological gift in planning and getting government, nationally, state and locally started on the development of these minerals. It will need cutting red tape, public and private investments and new infrastructure and technology to bring these minerals to the market
This session of the Wyoming will be a contest between an extremely conservative group that denies the present and a group likely not strong enough to anything about it. That why I running to get eye on the ball and work like hell to get ball rolling. All else is just wasted time and we can’t wait any longer!
Charles Randolph Democrat for Wyoming House District 4
Thanks Maggie! I look forward to your coverage.
I hate new taxes, but a reasonable tax on wind and solar electrical generation would be a very fair way to make up this revenue shortfall.
Well the average family many times has to adjust budget to make up for lost income. It is high time city counties state have to do the same. Start cutting on these “ entitlement” programs. Cut the LBGTQ “special” right programs. No one group should be put above another person. We are all given equal rights by founding fathers. Time to ditch deficit spending and live with in what one has.