A lot of people are getting worked up about the state government’s mineral tax revenue windfall, and how to best spend it.
Sorry, but I’ve seen this movie before.
Instead of using the unexpected hundreds of millions of dollars to invest in a brighter tomorrow and improve the lives and long-term prospects of Wyoming residents, lawmakers will stuff the serendipitous largesse into a savings account, kick the can on diversifying our economy and state revenue structure, waste a bunch of time on divisive, red-meat, social wedge-issues, then hold a press conference to pat themselves on the back for their stalwart conservatism.
Of course, Gov. Mark Gordon and legislative leaders immediately called for “fiscal conservatism” to avoid a wild spending spree. It may surprise you, though, to learn that I agree that some restraint is necessary since the unbudgeted $329 million for the current fiscal year and $738 million extra for the 2023-24 biennium are essentially one-time funds. But restraint and inaction are not the same thing. If officials act out the same old story we’ll be letting a historic opportunity to shape a better tomorrow for Wyoming slip through our fingers … again.
Until the Consensus Revenue Estimating Group issued its October report, legislators were staring into a budget abyss. Over the past several years, declining mineral severance tax revenues have led to repeated 10-15% state agency budget cuts. The hemorrhaging started on former Gov. Matt Mead’s watch, and no one who studies these things expects it to stop, yet Wyoming’s politicians still haven’t proposed a viable solution.
A portion of these losses was offset by federal COVID-19 relief funds and infrastructure measures, which pumped about $2.2 billion into state government when it was sorely needed. In a nausea-inducing example of the zealotry v. competence imbalance that’s crippling the Wyoming government, some officials actually tried to refuse the lifeline (while, of course, clinging frantically to it in their personal affairs.) Regardless, those funds will disappear by 2025, leaving Gordon and legislators scrambling to keep the state’s ship from sinking.
Then came inflation and Russia’s war on Ukraine, which boosted oil, natural gas and coal prices here at home. The combination landed hard on consumers. Of course nobody wants to pay a fortune at the gas pump, but additional mineral tax revenues came at the right time for state government.
Still, it continues the boom-and-bust cycle this state has been mired in since fossil fuel production took over as the economy’s main driver. Wyoming’s budgetary picture is fortified by higher prices — a notoriously volatile variable — not production increases, which remain on a downhill slide as the nation reduces carbon emissions to combat planet-killing climate change.
Most of Wyoming’s energy customers in other states are retiring coal-fired power plants and shifting to natural gas and renewables, such as wind and solar. It remains to be seen if an experimental nuclear power plant planned in Kemmerer will meet federal regulatory hurdles and ever be built. Ditto for carbon capture technology, promoted by state officials but still unproven as commercially viable.
Wyoming desperately needs to restructure its tax system away from dependence on fossil fuels, while we have the financial resources to get us through the next few years. When the minerals industry tanks again, as it inevitably will, we can’t expect the feds to bail us out.
That serious tax conversation never happens, especially when legislators can use temporary revenue boosts to avoid it at all costs. It’s political cowardice.
Lawmakers typically waste days tackling a maddening number of cultural “wedge” issues dividing Wyomingites. In the last legislative session that included everything from proposed bans on teaching so-called “critical race theory” and keeping transgender students from competing in sports, to eliminating abortion access for rape and incest survivors and mothers whose lives are at risk.
All those issues failed, but they will return in the upcoming general session in January along with fresh nonsensical legislation designed to fire up the base and solve zero problems, including a Republican move to eliminate ballot drop boxes and suppress voter turnout in a state where seven of every 10 voters are already registered Republicans. What’s the point?
There’s still a Democrat in the White House, so the extreme-right will gin up yet another bogus reason to protect our Second Amendment rights from President Joe Biden’s non-existent gun grabbers.
If there’s a reason for optimism, it’s that some legislators want Wyoming to boost pay for the state government workforce, increase education funding, make affordable housing available and finally pass Medicaid expansion.
Yes, we still need tax revenues flowing into the Permanent Mineral Tax Fund, the Budget Reserve Account, and others. But it doesn’t all have to go into savings.
The co-chairmen of the Joint Revenue Committee, Sen. Cale Case (R-Lander) and former Speaker of the House Rep. Steve Harshman (R-Casper), told the Wyoming Tribune Eagle the state must also invest in its citizens, especially the most vulnerable.
Harshman suggested creating trust funds for Wyoming’s Tomorrow Scholarships and maintaining the state’s new, 24/7 suicide prevention crisis line.
Case said he’ll advocate for “a conservative budget, but not a spartan budget.” He supports pay increases for state employees and teachers to help Wyoming recruit and retain workers in both sectors.
Education funding will likely spark an even more intense debate than usual, primarily because the Wyoming Education Association and Laramie County School District 1 are suing the state for its alleged failure to follow the state’s constitutional mandate to provide a high-quality, fair and equitable education for all K-12 students.
The legal action may cause some legislators, especially in the Senate, to delay school funding adjustments. Not that they need another excuse to do nothing, like they did last year by relying on the state’s “rainy day fund” and federal dollars to keep education spending at current inadequate levels.
If lawmakers lose, as they have the past four times they’ve been sued over school funding, they will be even further behind meeting whatever the Wyoming Supreme Court decides.
CREG Co-chair Don Richards told the Joint Appropriations Committee the state has added $950 million to the School Foundation Program, so the money is available to use now. The rainy day fund also has an all-time high balance approaching $2 billion.
Sen. Mike Gierau (D-Jackson), a JAC member, told the Cheyenne newspaper we have enough funds to wipe out the “structural deficit” in K-12 education, and also put money in the school construction account. Funds for the latter dried up with the end of coal lease bonus money. So why not do it now, while we can?
With the state’s brighter financial picture, this is the year to pass Medicaid expansion. It’s a no-brainer, as arguments against the move are misinformed or purposely deceptive.
Since 2013, the Legislature’s rejection of the program has cost Wyoming an estimated $1.4 billion in federal funds. Our residents pay federal taxes used by 38 states and the District of Columbia to expand Medicaid, while we don’t get a dime in return.
There’s an even bigger incentive the feds have offered over the next two years: an additional $54 million. Wyoming can provide health insurance to about 24,000 low-income residents, and reduce hospital losses caring for patients who can’t afford to pay.
Opponents’ argument that Wyoming will get stuck with the bill when the feds supposedly abandon Medicaid expansion sounds more pathetic every year. A decade since it began, the federal government has always paid at least 90% of the costs, as promised. No expansion state has ever gone back to the way things were.
On second thought, maybe a batch of new lawmakers on the scene after the election will lead to some creative options for how Wyoming uses its sudden influx of cash. Next year’s action doesn’t have to mirror the status quo.
Optimism isn’t my strong suit, but I suggest we follow the lead of spoken word artist Henry Rollins, a former punk rocker who once declared, “My optimism wears heavy boots and is loud.”
Wyoming folks are known for their independent streak, so the footwear and what you do with it is up to you. But being loud and making your voice heard during this critical time for the Equality State? That’s mandatory.