The Wyoming Legislature begins its biennial session in just a few days. With a large crop of new lawmakers joining, the Legislature is bound to see shifting priorities. New members will bring their views to the table, including views on what are the most important issues for the body to address.
Economic diversification — and how Wyoming can better achieve it — should top the priority list. Even though we have all heard talk of it before, this Legislature would do well to devote time and effort to make meaningful strides toward diversification.
Wyoming is at a crucial point in its history. We have spent much of our time as a state supported by the extraction industry. Severance taxes and federal mineral royalties are a major part of our state budget, not to mention the impact that extractive industries have on sales and property taxes. Oil, gas and mineral extraction have provided jobs and supported communities. It will undoubtedly remain a major industry in Wyoming for the foreseeable future.
However, the natural resource market is a global market, and that market is changing. Demand for coal is declining — especially in the United States — and we have limited access to overseas markets. Even as extractive industries remain major players in Wyoming’s economy, they are likely to decline relative to where they have been in the past.
As a result, economic diversification efforts are more important than ever. We have talked about it for decades, though all the clamor hasn’t resulted in much success. It’s gotten to the point where many of us have grown jaded and dismiss the talk of economic diversification as a pipe dream.
This is understandable. But just because we have not made progress doesn’t mean we should give up. The problem has not receded just because our efforts to address it have been lackluster. The day is still coming when Wyoming will need new industries to support our population.
At the same time, we must also remember that government itself cannot diversify the economy. It can only set the conditions. Private enterprise is the actual source of economic diversification. The state can create favorable tax rates and infrastructure that allows business to thrive, but new industries require entrepreneurs and risk-takers to make the difference.
Perhaps the biggest obstacle to economic diversification is the need for more entrepreneurs to undertake the actual work of growing new businesses. Wyoming’s population migration statistics cast a daunting shadow in this regard and deserve careful consideration. In the most recent census, more people moved out of Wyoming than moved in. This does not bode well for economic diversification. Even worse, the population that moved out of state tended to be significantly younger than the population that moved in. Wyoming is a favorable place for retirement, but an unfavorable place for ambitious young people. This trend has to change for the good of our state.
A healthy future for Wyoming is going to require adjustments to how we currently do things — and some might be painful. Economic diversification will require, for instance, a change to how our state sees itself with relation to the extractive industries. They have carried the load for a long time, providing the tax income Wyoming needs to function, and that won’t last forever. With an older population base, we will see a higher demand for government services but a generally lower tax base to pay for those services. Barring major reforms, the only solution on the horizon is a change to our tax system. Preparation now as to what that looks like will pay major dividends in the future.
Our state has its share of both challenges and advantages. We are geographically large, but with a small population. Our costs are high, but our tax base is low. At the same time, we have an advantageous tax climate and plenty of room for growth and for ambitious individuals and companies to make their mark.
The Legislature must weigh these pros and cons and think long term as it sets its priorities. This is not the time for lawmakers to waste their time on topics that do not set Wyoming up for future challenges. The time is too limited. Instead, the Legislature must focus on putting our state in the best position to thrive for the decades to come. A major part of that is Wyoming’s economic future.
Even though our progress has been slow, we have no choice but to keep trying.