Wyoming will lose approximately $50 million in annual revenue to the lower federal mineral royalty rates for coal contained in the Trump administration’s One Big Beautiful Bill, according to a report by state financial forecasters.
Companies pay royalties to the federal government for minerals extracted from federal lands. The feds then generally split those dollars evenly with the government of the state in which the mineral production took place. In Wyoming, those royalties help fund K-12 education, highways and county roads, city and town services and the University of Wyoming.
The Big Beautiful Bill, signed by President Donald Trump last month, reduced the federal royalty rate for coal from 12.5% to 7%, a discount that is “estimated to reduce Wyoming’s share of [federal mineral royalty] revenue by approximately $50 million per year, depending upon production levels,” according to the Consensus Revenue Estimating Group’s July report.
Known as CREG, the group makes revenue forecasts each October and January, and provides revenue updates on major sources in April and July. The Wyoming Legislature relies on CREG’s estimates to craft the state’s budget.
Supporters of the Big Beautiful Bill, including Wyoming’s federal delegation, touted the legislation as a way to boost coal production.
“This law empowers states to produce more energy. That certainly includes my home state of Wyoming,” Republican U.S. Sen. John Barrasso said on the Senate floor. “It encourages increased coal production on federal lands. It cuts red tape. It creates opportunities for our energy producers.”
State revenue forecasters, however, do not predict the rate reduction will be offset in state coffers.
“This reduced revenue will be modestly offset by higher severance and ad valorem payments as companies will be able to deduct a lower amount of FMRs; however, this offset is small compared to the reduced FMRs,” the CREG report states.
The federal legislation also reduces the royalty rate on oil and natural gas, but those discounts only apply to new production, so their “impact to state revenue is much less,” according to the report.
Altogether, $50 million represents a fraction of Wyoming’s revenue picture. The state’s main operating account, for example, is predicted to reach roughly $1.4 billion by the end of the 2025 fiscal year.
Even so, the loss “should concern people,” Joint Appropriations Committee member Sen. Mike Gierau, D-Jackson, told WyoFile.
The good news is that Wyoming has come to rely more heavily on investment income, Gierau said, making such a hit to royalties less painful for the state.
“Forty percent of our general fund revenue is interest income. That’s amazing,” Gierau said, adding that the tourism industry is another bright spot. But lowering royalty rates won’t budge coal’s downward trajectory, he said
“It’s going to be left up to the state of Wyoming to fill in the gaps, and that’s something they don’t talk about. We’re going to get left holding the bag and the bill,” Gierau said.
Joint Appropriations Committee Chairman Rep. John Bear, R-Gillette, did not respond to WyoFile’s request for comment by publication time.
Hope the Trump voters are happy now. Oh, that’s right, in their imaginary universe they’ll blame the loss of funds on Biden, Obama, maybe even Carter.
How about asking Barasso & Trump to donate $ to make up for the shortfall? It was their idea & they are responsible.
And they have the money
The “lost” revenue should be made up by allowing MORE COAL MINING. Wyoming has the cleanest, finest coal in the world, and it needs to be shared. Job creation a plus.
Our Congressional delegation and Gov. Gordon may have to follow the Trump solution to this sort of problem: if you don’t like the numbers just fire the personnel who made the study. That’ll show them. Ignorance is strength.
So now the government comes up with a fake dollar figure to con the public. Just like oil coal prices fluctuate so having a set number is lying. It’s also funny that a government acts like it hasn’t already spent every dollar. The university of wyoming doesn’t need an adiitional $130 million every year, where is all the tuition money going?
Gee, Barrasso forgot to mention this when he was singing the praises of Trump’s “Big Beautiful Bill”.
Our 3 elected Washington delegate have sold Wyoming down the tubes for Trump.
They are loving the high life in Washington and have forgotten the Wyoming way
Senator Barrasso and most of his Republican ilk have been telling the same lie about taxes and royalties being impediments to mineral production that they actually believe it. This latest revelation in not news. We knew with certainty 26 years ago via a study conscripted by the Wyoming Legislature to determine once and for all the relationship between mineral taxation and mineral production in Wyoming. The 350 page study took 2 years, headed by US economics professor Shelby Gerking and his roster of grad students and others. It showed conclusively that raising royalties and taxes on minerals had little to no effect on the output of product. Didn’t matter if the severance tax on coal was 12 percent or 6 percent… the same tonnage of coal left the State on rail cars. The mining companies and the railroads just passed along the royalty fees and taxes. The effect of fees and taxes on miknerals was well inside the margin or error for the study paramters. Oops.
The Wyoming Legislature fully expected to raise the study above their heads and loudly proclaim the fees assessed on minerals – all the taxes, royalties, severances – all of them – were dampening business. Except they weren’t. Just the opposite. I’m guessing that a few copies of that landmark study must still be in existence, but it was promptly buried by out state leaders and rarely spoken about since. It became a taboo. Truth be told, Wyoming could have / should have ratcheted up the taxation on minerals from the outset. It would have brought in hundreds of millions of extra dollars for the Permanent Mineral Trust Fund and state budgets over the years. The gross volume of coal mined and sold would not have fluctuated.
So here were are in 2025. Going 180° in the wrong direction once again on mineral assessments and taxation. The corporations have always been able to jump in bed with Wyoming and play them. Heck , Wyoming leadership was seduced into letting the lobbyists write the rules and set the rates . The names have changed…. Cheney becomes Trump , Geringer becomes Gordon , and so on . But the game remains the same. Wyoming once again is its own worst enemy. It refuses to acknowledge that there is a reason we tax this and put a fee on that. The core Republican dogma that all taxes are somehow evil and counterproductive is… neither. Wyoming got played and laid once again. Just add in Trump’s Big Ugly Bill and Project 2025 and perfume the room. The energy ands minerals corporations OWN John Barrasso and the Wyoming legislative and executive branches. It has cost the state vast sums of money for decades , and here at the end of the Coal Era we have little to show for it . Boom Bust Bye-bye.
We knew all along , thanks to Dr. Gerking and direct observation . Not that it mattered. The Robber Barons won. Add Trump to the list.
Our congressional delegation all voted for this bill even though it would reduce
Wyoming’s share of the federal royalties on coal production by as much as $50 million per year. Evidently, they owe more allegiance to Trump than to the people of Wyoming they purport to represent.
This is basically Walmart economics, sell more for less. So let’s say they produce more, who is going to buy it? Where is the market? The EPA has shut down the bulk of the coal fired power plants. The liberal west coast states have blocked exports, who is going to buy the coal. Now real economics comes into play, supply and demand, coal is going to get cheap. Gillette and Wright are going to have big layoffs again. The BBB is a turd, its politician economics and fixes, not real world solutions. Im a conservative, but really use a tiny bit of common sense.
They ship it to China through Canada, look at Decker coal in Montana. Coal is selling at steady levels at least for the foreseeable future.
Unintended consequences.
tRump only helping big business and even screwed Wyoming.
I believe the reduction on oil and gas royalty applies to new federal leases. It does not apply to new production on existing federal leases.
What our trump blinded congressional delegation ignores is the fact that coal, like any commodity has to have a market. The demand for Wyoming coal has been declining for years. In addition to that, increased production will create a surplus and drive the price down. It’s the same boom and bust we have always experienced in the minerals industry. They will say anything to support their cult leader regardless of the facts. Granted in the total revenue picture $50M may not be huge, but has anyone added up all the hits to the Wyoming economy in the BBS bill, what about the costs to rural medicine? That might be a good story for Wyofile to pursue, add them all up and show us the total?
Wyoming aint your home state Barrasso, Pennsylvania is.