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.