State representatives on the House floor in the Wyoming Capitol in Cheyenne in March 2021. This upcoming session, legislators will weigh what to do with over $1 billion in federal stimulus funds. (Mike Vanata/WyoFile)

The way Rep. Lloyd Larsen (R-Lander) sees it, the $1 billion-plus windfall coming to Wyoming through the American Rescue Plan Act is a little like an inheritance from grandma. 

It’s an unexpected, huge sum that can change the arc of life ahead: The two $523-million stimulus payments together are equal to over 40% of the $2.3 billion budget that Gov. Mark Gordon has proposed for 2023-24. And nearly half those funds qualify as “revenue replacement,” which means they can be saved, invested or used with minimal restrictions.

“Do I go out and squander it by taking a fishing trip to Alaska, as much as I want to do that?” Larsen asked. “Or do I invest it so I get a better return on my retirement? Or maybe I pay off my house? Those are the choices.” 

Larsen, a member of the Wyoming Legislature’s Joint Appropriations Committee, will be party to the debate over what ought to become of the one-time infusion of cash. Proposals have thus far mostly eschewed using the funds to supplement the biennial budget or backfill past cuts. Upcoming choices, Larsen anticipates, will center around savings and investments in programs intended to buoy the state’s long-term economic prospects.  

“The one thing we will avoid is the fishing trip to Alaska,” he said, “because we don’t want to squander it.” 

Rep. Lloyd Larsen (R-Lander) will help make decisions about what becomes of Wyoming’s $1 billion-plus American Rescue Plan Act stimulus haul through his role on the Wyoming Legislature’s Joint Appropriations Committee. (Mike Vanata/WyoFile)

A monthslong planning effort led by a Gordon-assembled “strike force” preceded the committee’s ARPA funds deliberations, which begin Friday. That effort entailed a call for proposals from state agencies, county and municipal governments and others. Collectively, participants pitched nearly $4 billion worth of ideas, four times more than is available, said Sen. Drew Perkins (R-Casper), who chairs the appropriations committee. 

“People want to add money to the Hathaway [Scholarship], people want to create a new endowment to help fund junior colleges,” Perkins said. “Somebody wants to build a road between Rock Springs and Green River. We’re probably going to have $2 to $3, maybe $4 billion worth of legislative requests.” 

Based on the proposals submitted and guidance from his strike force of cabinet members, legislators and local elected officials, the governor has made specific recommendations for how to use about $500 million of the stimulus funds. 

The suggested spending is tailored to Gordon’s “Survive, Drive and Thrive” plan, aimed at helping Wyoming pull out of the pandemic with a focus on healthcare, social services, education, workforce, and economic diversification and development. The specifics were presented to the public last week during a virtual town hall-style meeting. Comments on the spending plan are also being taken through the end of the week (click on a “goal” here and scroll down). But the proposals headed to the Joint Appropriations Committee aren’t likely to change, Gordon policy director Renny MacKay told attendees of the livestreamed town hall. 

The largest slice of Gordon’s recommendations would go straight into savings: $150 million of the more-flexible “revenue replacement” dollars Wyoming was awarded would be socked away. 

The next-largest specific proposal is for more than $100 million to be set aside as a potential match for further funds for continued energy development such as a commercial-scale carbon capture and utilization project. In the meantime, the nine-figure sum would sit in the Legislative Stabilization Reserve Account — commonly called the rainy-day fund. 

“We’re hopefully turning that $105 million into maybe five, 10 times more than that,” Wyoming Business Council CEO Josh Dorrell told attendees of the virtual meeting. 

Other recommended projects range from $125,000 in matching grants for humanities-based programs to a $75 million addition to the Wyoming Wildlife and Natural Resource Trust. There are also very specific proposals: $10 million for a planned I-80 wildlife overpass at Halleck Ridge near Elk Mountain and $84,000 to develop an EMS dispatcher certification curriculum. 

Starting point

“I think the governor’s got some really good ideas in there,” Sen. Larry Hicks (R-Baggs) told WyoFile. “Those things that we really like, we’re probably going to support him 100%. And those things that we have concerns with, we’ll probably negotiate a middle ground.” 

After the recommendations are initially carved up in the Joint Appropriations Committee, which Hicks sits on, the spending and savings plan will have to pass muster with the Legislature as a whole. Initially, state solons eyed a midsummer special session to allocate the funds, but the decision-making was put off until now after it became apparent that Wyoming’s economic outlook was better than anticipated and the federal government extended ARPA deadlines

Few expect the appropriations bill that eventually makes it to Gordon’s desk to contain everything the governor requested. 

“We’re not trying to throw the baby out with the bathwater, and I don’t think anybody wants to take this recommendation that the governor brought and just pitch it aside,” Larsen said. 

Larsen has read Gordon’s recommendations, a 16-page letter, three or four times and marked it up with smiley and frown faces. 

“I think there are some things that will just go away,” he said. “And hopefully there’s things we stick in its place that make this whole document stronger and better. The effort to remove something isn’t going to be malicious.” 

Gov. Mark Gordon and policy director Renny Mackay prepare to address the Wyoming Legislature’s Joint Appropriations Committee on June 15 in Cheyenne. Gordon said Wyoming should prioritize long-term goals rather than short-term wants when it comes to handling more than $1 billion in federal American Rescue Plan Act funds. (Joel Funk/WyoFile)

Hicks, Larsen and Rep. Andy Schwartz (D-Jackson) all told WyoFile that they’d consider funneling some of the ARPA funds toward the $4 billion Common School Permanent Lands Fund, which generates investment income for K-12 education. The stimulus dollars can’t be invested directly, but can be spent on government functions that allow an equivalent amount of general budget money to be squirreled away into permanent funds. 

Investment income from a hypothetical $200 million contribution to the school fund, Hicks said, could fulfill about 10% of the $200 million annual shortfall in funding needed for K-12 education across Wyoming. 

“We have a structural deficit that’s going to eat our lunch if we don’t come to grips with it,” Hicks said. “I personally have a bill that would start with $100 million in the Permanent Mineral Trust Fund, $100 million in the Common School Land Fund and $100 million in the Wyoming Wildlife Natural Resource Trust Fund. Those numbers will change as it gets into the legislative process, but that’s my starting point.” 

Savings vs. spending

The “cautious” approach espoused by the strike team and Gov. Gordon is a prudent path forward in the view of University of Wyoming economist David Aadland, who directs the new Center for Business and Economic Analysis. 

“For example, I think that putting $100 million or $105 million in the rainy day fund to try to encourage matching private and public partnerships to invest in large-scale energy projects makes a lot of sense,” Aadland said. 

University of Wyoming first-year economics students, he said, learn about a concept called the “permanent income hypothesis.” The theory holds that when a household receives a permanent increase in income, they spend more, because the money can be expected to keep coming. 

“But when it’s temporary, the theory says you should save a larger portion of that,” Aadland said. “I feel like what’s going on here with Wyoming: Legislators and policy makers are applying the permanent income hypothesis, because, after all, this is temporary money.” 

“In the end, this is a once-in-a-generation opportunity. Altogether, you’ve got a billion or so dollars. What do we do with that so that it doesn’t evaporate?”

—Sen. Drew Perkins (R-Casper)

Some decisions can be put off. Wyoming has until 2024 to appropriate a  share of the ARPA funds, $544 million, that are subject to guidelines released last week by the U.S. Department of the Treasury. That sum must be spent by 2026. The balance, $502 million eligible as revenue replacement, is not under those same restrictions. 

“In the end, this is a once-in-a-generation opportunity,” Perkins said. “Altogether, you’ve got a billion or so dollars. What do we do with that so that it doesn’t evaporate? 

Used wisely, Larsen said, the unanticipated ten-figure sum from the federal government could “help drive the state’s direction for the next century.

“We have an opportunity to help broaden or smooth out the path of Wyoming going forward for generations to come with programs and investments that won’t disappear in six months,” he said. 

Mike Koshmrl

Mike Koshmrl reports from Jackson on state politics and Wyoming's natural resources. Prior to joining WyoFile, he spent nearly a decade covering the Greater Yellowstone Ecosystem’s wild places and creatures...

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  1. More money for the bloated education system that refuses to trim the budget? Broadband? Affordable housing? Sadly, this looks like it will be used to grow even more government we can’t afford.
    (Comment was meant for the general thread, not as a response to Mr. Baker).

  2. Inflation is not going away. The state needs to invest in hard assets so that we will have the backstop for whatever crisis the lawless fools in DC create next. Wyoming should invest in a silver bullion nest egg for when the FED has to reverse course in a few months and inflation goes parabolic. Spending money on affordable housing is a noble cause, but it would have to managed by people who don’t buy into leftist hysteria. Stay grounded, people. This will be a hard year. It is better to have a reserve than to spend our way into poverty next year.

    1. Typical Bob response. What is basically happening with the State’s savings accounts is that the Governing body wants a nest egg so they can go brag to fellow Governors how much money they have in savings while telling the citizens of Wyoming there is no money to help them and sorry but we have to cut the programs that you desperately need. This would be like me going home and telling the kids they can’t eat today because we have no money and I don’t want to touch my savings account because it sounds good when I tell people I have a large savings account.

      1. Reality check. I was a latchkey kid. I grew up hungry, Rick. No free breakfast or lunch at school. I walked 3 miles to get home from school because there was no school bus to my neighborhood and my mom was a working widow with 6 kids. I either paid for lunch at school or I could pay to ride the city bus home. I was hungry so I walked. Hand me down clothes from the neighbors. Fried bologna and toast for dinner. No optometrist appointment until the 10th grade, so I had searing headaches for years and had to sit in the front row in class to see the board.
        Spare me. Please. If you can’t feed your kids and save money then don’t breed.

        1. Wow Bob, you completely missed the jest of my comment. I was saying that the legislatures want to stash money away instead of using it to help the people in Wyoming that they cut services to when they determined it wasn’t raining enough to dip into the rainy day account over the last two years.

          1. I see your point, Rick. I agree that we have to be empathetic and support our safety net. Frankly we have been impressed since coming to Wyoming. People here pull together and we voted for tax increases to support infrastructure and our senior centers since arriving. We support local businesses and contribute to the fire department and local fundraising. At local craft fairs we see food and clothing freely donated and sitting by the door for those in need. I also have picked up books and puzzles at our library and community thrift store. California was never this “socialized”. I would like to see funding to keep the rest stops open and clean and an area where drivers can park and sleep without light shining in the windshield. Yes. Let’s make investments in our lives but let’s not go down the destructive path of blue states. They literally create programs based on one-off funding and then panic and demand tax increases when the cash runs out. As you jested, it is unfair to those who simply live day to day to have uncertainty and the threat of loss hang over them. I’ve been there. We benefit from the kindness of strangers here and do our best to spread the wealth where we can. But the only reason we can do that is because we only splurge occasionally and our focus has always been to save for a rainy day. I hope you understand. I come across pretty critical because I know folks who can’t stop spending and always have problems with money. Our legislators need to balance these desires for us just as a parent does.

  3. I’m sure our “brilliant” representation will be in favor of donating a chunk of money to the next failed lawsuit against the federal government. Gor-duhn has never met a losing lawsuit that he didn’t support.

  4. Proverbs 21:20
    We need to look back when the state had money and how it was spent . The last thing I don’t want to hear is how some construction project didn’t cost the tax payers any money by an overpaid state employee .

    1. I love the term “overpaid state employee”. I am not denying there are some that fall into that category but the majority fall into the underpaid category.

  5. Hopefully if the funds are expended appropriately, no one will be homeless because of a shortage of affordable housing. That needs to be a priority.