The Wyoming legislative session is underway, and one of the main challenges facing lawmakers is a revenue shortfall due to a downturn in the energy industry.
House Majority Floor Leader David Miller defended the state’s reliance on the energy industry for revenues in a speech to the House of Representatives.
“Diversifying the economy will not diversify the tax base. In fact, every non-mineral job is a further drain on our limited revenues. Minerals can support Wyoming in perpetuity, however that requires access to the minerals,” Miller said.
Senate Minority Floor Leader Chris Rothfuss said the state’s energy industry largely depends on the market, and that isn’t something the Wyoming legislature can fix.
“I think it’s naïve for us to assume that there’s a bright revenue year ahead,” said Rothfuss. “We need to be prudent about our cuts and not overcut. We don’t need to be zealous about it, but we have to be very thoughtful, and we have to look for ways to improve and diversify our revenue picture moving forward.”
One area of particular concern is K-12 education funding, which could face up to a $400 million shortfall.
Some want lawmakers to consider a tax increase to make up for the deficit. Senate Minority Leader Chris Rothfuss said that might be challenging, because there are members of the House who have already signed pledges not to raise taxes.
“It’s difficult, then, to build a majority on the House side when around a quarter of them have indicated by pledging to a special interest group that they’re unwilling to consider a certain portion of what government does,” said Rothfuss.
Rothfuss said that once the new CREG report is released, the revenue picture could end up looking slightly better than it did a few months ago, but only in the short-term. Lawmakers will consider a number of possible solutions to revenue shortfalls over the next eight weeks.