Gov. Mark Gordon is asking the Legislature’s Joint Appropriations Committee to continue funding the Wyoming Business Council, as some on the panel question whether the state’s chief economic development office is necessary.
“I understand, it may be time for the Business Council to benefit from more careful scrutiny from the Legislature in how it goes about the tasks assigned to it,” Gordon wrote in a Jan. 7 letter to the committee. “A course correction may be warranted, but a wholesale defunding of the [Business Council] would be counterproductive.”
The letter was sent the same week the committee quizzed Business Council Chief Executive Officer Josh Dorrell about the organization’s successes and shortcomings. Committee members also pondered whether economic development is an appropriate use of state funds.
Appropriations Co-chair John Bear, a Gillette Republican and Wyoming Freedom Caucus member, asserted that offering businesses incentives to come to the state only makes them perpetually reliant on state help, using the analogy of a “self-licking ice cream cone.”
“I don’t think that’s the way free markets were ever intended to work,” Bear said. “My belief is the government has a responsibility to keep taxes and regulations low. That’s it. And that makes an environment where businesses can flourish.”
Sheridan Republican Ken Pendergraft said the Business Council’s mission inherently amounts to “flat out interference” with a free market by picking winners and losers.
It’s true, Dorrell told committee members, that the council discerns between applicants and says yes to some and no to others. It’s also the case, he said, that prior to 2020, it was probably too easy to get a grant from the council. But for the past five years, the council has self-imposed reforms to ensure that it is only “investing” in companies and publicly owned infrastructure that are self-sustaining and fit Wyoming’s economic priorities.
“We’re not creating a self-licking ice cream cone where we’re propping businesses up,” Dorrell said. “In fact, if you look at the rule changes that we’ve made and the statutory changes that we’ve requested [from the Legislature], they are actually for self reliance. So what we are doing is in line, in a lot of ways, with what you’re saying.”
The council’s current roster of investments generate an estimated $30 million in annual “economic impact,” according to the organization. The council has also drawn attention over the past year to what it considers a damaging trend of “out-migration” among Wyoming’s youth. Fully addressing Wyoming’s economic development needs, Dorrell has said, might require an investment of up to $1 billion over several years.
The Business Council requested a budget of $112 million for the next biennium, or two-year budget cycle. But Gordon, in his recommendation to lawmakers, trimmed the request to $54.6 million. The governor did not include nearly $50 million for an ongoing broadband buildout effort.
Dorrell noted that in addition to his agency’s budget request, it is also asking lawmakers to join the council and its stakeholders in a longer discussion about how to realign the organization with a changing economic and political environment.
“We are very willing to not defend our programs, or to defend the efforts that we’ve taken so far, but rather to seek out the problem and address it with the right statutes and the right investment mechanisms. That’s what you have in front of you,” Dorrell said.
The question of whether economic development is the proper role of state government, Dorrell added, makes for a good discussion. But it doesn’t change the fact that Wyoming is in stiff competition with every state in the nation, he said, because they all heavily invest in economic development strategies that include business recruitment.
“You have to be able to compete. And the way you compete is interesting and it’s hard to explain. But you at least compete,” Dorrell told the committee.
Laramie Democrat Trey Sherwood said she likes the idea of a coordinated effort between the Legislature, Business Council and stakeholders to fully examine the organization and potentially craft reforms.
“It’s something I’m definitely interested in as an interim topic,” Sherwood said, “to really do a deep dive into your statutes and figure out what is no longer serving our businesses and our communities and where there’s programs that we could align with our shared values — to really build out strong communities and let the world know that we are absolutely open for business.”
Gordon, in his letter to the committee, implored committee leaders to examine, but not defund, the council.
“Throwing the baby out with the bath water would be short-sighted and significantly diminish Wyoming’s ability to compete successfully in President Trump’s considered efforts to bring industry back to America,” he wrote. “Wyoming always sought to get to ‘yes’ with the private sector. Defunding the state economic development agency is a flashing neon sign that Wyoming is ‘closed.'”
Though the Appropriations committee holds sway over budgeting decisions, the fate of the Business Council’s budget won’t be known until the full Legislature takes up the issue in February.
Many Wyomingites don’t know the Wyoming Business Council’s history or reason for being. (I’ve mentioned this elsewhere on social media, but I’m repeating it here, with more details, because it’s important.) The WBC was originally created as an end run around the anti-corruption provision of the Wyoming Constitution which prohibited appropriation of funds to non-government entities. Instead of appropriating the funds directly to those entities, the Legislature would appropriate funds to the WBC, which would in turn issue grants to the private entities. But the WBC has abused its power. It picks winners and losers among businesses and often gives money to out-of-state companies which compete with native Wyoming businesses. It also funds ill-advised projects that are a waste of taxpayer money, such as the “Cirrus Sky” business park in Laramie (a big business park which currently has only one tenant and one POSSIBLE future tenant due to its inconvenient location far from food, the post office, the University, and other resources that businesses need).
Several years after the WBC was founded, the Legislature pushed through a constitutional amendment allowing it to appropriate funds to private entities for the purpose of “economic development.” (Many citizens opposed this amendment, noting that one could brand just about any giveaway to a private party as fostering economic development, but it passed nonetheless.) In any case, the amendment made the WBC unnecessary for the purpose for which it was originally created. Might as well just eliminate it. It has become a big, extremely costly bureaucracy, is dysfunctional, and is actually harmful to many Wyoming businesses.
Well, this one is clearly on the Governor.
The Governor has the duty, power and authority to oversee his appointees to ensure the benefits to Wyoming. He could have headed this off but chose not to do so. He did cut the Wyoming Business Council exception request in half. The governor clearly had concerns over the budget request by WBC. But he did not address the issues of in competence and ethical issues in the WBC.
Case study:
Cyrus Sky is a business park North of UW. It was specifically built by the WBC, Laramie Economic Development, UW and the City of Laramie to target data centers. It was projected to be fully occupied within 10 years… that is long past. There is only one client at Cyrus Sky which is UL Laboratories.
How is it that WBC and Laramie Economic Development (led by Brad Enzi formally from Two Elk) cannot get a data center in a business park next to a University. This state is seeing data center growth everywhere but the business park designed specifically for data centers. See all of the design documents below.
https://www.cityoflaramie.org/550/Cirrus-Sky-Technology-Park
This is total incompetence. WBC complains that UW students leave the state, but there are little to no jobs for them in a business park that is dirt and weeds.
And ethical issues case study for the WBC.
WBC has several contracts and amendments with Harvard University. We have spent $4,566,452 with Harvard since January 2022 (Source: wyopen.gov). Harvard through the Growth Lab did work on the Comprehensive Economic Development Strategy (CEDS). Josh Dorrell highlighted this work here:
https://wyofile.com/building-know-how-can-strengthen-wyoming-communities/
But the document is terrible. Apparently the Kennedy School of Harvard cannot use the Strategic tools developed by Harvard Business School. The strategic document would get a “C” in a Business Administration undergraduate business strategy course. The document does not even mention Data Centers as economic development opportunities. The SWOT analysis disregards the values of Wyoming. It also states that taxes in Wyoming are a strength, a weakness and a threat. There are no five forces analysis for industries that economic zones should target. And therefore no references for local decisions to attract those businesses. It is critical of our young people leaving Wyoming, but does not offer strategic decisions or analysis on how to keep them here. Bottom line is the team that did the work does not know what they were doing. It is worthwhile to note that Wyoming was the first state to hire the Growth Lab. The Growth Lab mainly operates in the international arena. Competitive strategy for Ghana is probably quite a different animal then between states.
There were a few other white papers written by the Harvard Growth Lab and the Kennedy School for WBC. They even hosted Mark Gordon on the following video.
https://www.youtube.com/watch?v=SF03stpslXU&t=938s
Ricardo Houseman and the Growth Lab are very accommodating to the WBC and the governor. Why not? They get paid handsomely… $4.5 million. I think they would like that gravy train to continue. Host Mark Gordon and introduce him as a governor with many accomplishments and ties to New England. Then provide certifications from the Kennedy School to employees of the Business Council. All part of a cozy vendor relationship. Linkedin might require an account to see the below links.
Josh Dorrell- Kennedy School with 1 certificate and 5 skills.
https://www.linkedin.com/in/josh-dorrell/
Chance Price- Kennedy School (1) Certificate
https://www.linkedin.com/in/chance-price-34832272/
Kaley Holyfield- Kennedy School (1) Certificate
https://www.linkedin.com/in/kaley-holyfield/details/certifications/
Heather Tupper- Kennedy School (1) certification
https://www.linkedin.com/in/heathertupper/
Amy Quick- Kennedy School (3) Certifications
https://www.linkedin.com/in/amy-quick-wyo/
Brandy Harlow- Kennedy School (2) Certifications
https://www.linkedin.com/in/brandi-beecher-harlow-edfp-79100061/
Kristin Bonk Fong- Kennedy School (2) Certifications
https://www.linkedin.com/in/kristinbonkfong/
And so on… many in the WBC are getting certified following a contract start date with Harvard.
I do not believe that the contract law of Wyoming allows for vendors to provide opportunities for state employees to individually gain value related to the contract. This is an economic development contract and the certifications were gathered during the contract period. In many ways, this might be construed to be to an influence further contracts and amendments to contracts of the vendor.
In light of the quality of work of the CEDS, it was probably inappropriate to issue certifications to many WBC employees. Josh Dorrell’s CEDS did not provide anyone decisions on how to better compete for economic development.
Governor Gordon should have ensured that the value of the WBC would be easily seen by Wyoming citizens. Business parks that have no businesses or are primarily vacant like Johnson County and Cirrus Sky are not stellar examples. The executive director has a salary of over $280,000 and the work on the strategic document did not represent Wyoming values. It did not even represent the excellent work of Michael Porter from Harvard Business who is a guru in competitive strategy.
The WBC held budget presentation watch parties throughout Wyoming. They did not argue with the governor’s 50% cut of the WBC exception request. However, they did say out loud that legislators are Neanderthals. Perhaps the economic development community, should be cited for being politically inept as well as ethically questionable.
This is just 2 case studies. There are many questions to be made about business council activities.
The work of the business council truly needs improvement. Whether WBC needs defunding… that is up to the Legislature now. The governor could have made changes in the interim to head off this growing disappointment. But even he saw that the budget request of the WBC was out of line. If the WBC is to survive, it needs oversight and direction.
And in Thermopolis: In 2007 the WBC (BRC funding) gave Hot Springs County $2,689,706 for the Red Rock Business Park. Where it remained free of any businesses until 2016 when the Thermopolis Economic Development Company sold the park to the Wyoming Dinosaur Center. No sales price was disclosed in the Thermopolis Independent.
Record.https://www.thermopir.com/story/2016/01/21/news/business-park-sold/1486.html
I am an electrical engineer who (among other activities) operates an ISP and has engineered and built equipment for data centers. I predicted, when the boondoggle was being proposed, that the “Cirrus Sky” business park was going to have a hard time attracting data centers (or other tenants for that matter). I noted that while that area has big WAPA power station that IN THEORY could provide a data center with power (in practice, there’d be big infrastructure costs involved), the park site is located at an elevation of 7300 feet. The laws of physics and thermodynamics dictate that, due to the thinner air at that altitude, cooling is MUCH more difficult and expensive than it is in nearby Cheyenne, which is more than 1000 feet lower. And Cheyenne is a crossroads city where major fiber routes meet, making it a much more attractive site for data centers hosting servers. Thus, companies would choose (and have chosen!) Cheyenne over Laramie as a site for data centers. The Cirrus site also has other disadvantages: it’s far from food, shopping, and other resources that a business and workers at a business need. The WBC not only failed to listen to me when I pointed all of this out but tried to silence me. It then went ahead and funded the project with taxpayer money anyway. But sure enough, the site only has a single tenant and one possible future tenant.
I support Governor Gordon’s request to continue substantial funding to the WY Business Council. Its important for Wyoming to be competitive with other states and not just those surronding us. We have to do everthing we can to diversify our industries, work force and opportunities if we are to thrive and not just survive.
Thank you
“I don’t think that’s the way free markets were ever intended to work,” Bear said. “My belief is the government has a responsibility to keep taxes and regulations low. That’s it. And that makes an environment where businesses can flourish.”
if thats the case, why isnt this state already booming? Because last time I checked we are the most “business friendly” state according to what Republicans tell me we need, and most businesses are on life support.
Which businesses are on life support? Is that life support supplied by the government? Can you speak to the statement that our state is not booming when we enjoy very low unemployment, a relatively low tax base, a moderately high funding level for schools, and a modestly increasing population? Housing prices and sales are robust. What’s your source for that statement? How, specifically, has the WBC contributed to our boom or lack of boom? I’m asking for specifics, please.
There’s a reason why the states surrounding WY that do tax businesses are economically growing and expanding while we contract or at best tread water.
To attract economic growth it requires more that just no taxes and we’re going to remove regulations. If the spouse and/or family of a new prospective employee doesn’t want to come here that person is not going to take the position being offered.
Reps Bear’s and Pendergraft’s statements demonstrate what they think will encourage economic growth. Change is hard. Have our representatives identified which towns in WYO are growing and which are shrinking? What trends have been identified that are possible reasons for why this is happening? And will our leaders believe the trends or stay within their preconceived beliefs? A diverse economic base is not a bad thing. Our leaders need to look beyond extractive industries, hospitality, and agriculture. And building data centers isn’t it either.
Decent businesses that are looking to expand will evaluate a town’s quality of potential employees available, quality of life issues, the schools, the infrastructure, proximity to other needs (highways to move product, airports, suppliers, etc.) along with a business friendly taxation/regulation environment. Add in our weather, remoteness to larger markets, many people’s resistance to change and blunt conservatism, and WYO is a tough place to attract businesses to.
There’s no such a thing as a ‘free market’ in America. Farmers, ranchers, oil companies, the mega rich, all receive billions of dollars- at the expense of the average working man and women.
Is economic development an appropriate use for state funds? Only if you are interested in economically developing the state (i.e. moving beyond a fossil fuel economy). Otherwise, sure–defund the Business Council! Let’s see how few businesses will come here and how many more of our young people will leave the state in search of job/career opportunities. Every year I ask my students how many of them want to leave Wyoming after graduation from UW. Between a half and two-thirds say they don’t want to leave but don’t see they have any option–no jobs in their field here. Looks like the legislature wants to keep that ball rolling. Brilliant.
That’s part of the problem, many in the legislature are not interested in economically developing the state. I would guess that there are some who would even like to eschew a monetary system completely and just barter for everything. I have a lot of broiler hens ready to go by the way, and I a looking to acquire a barrel of salt if you have one.