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State Government Officials Try To Defend Against A Bust

In Wyoming the energy industry accounts for nearly 70 to 80 percent of the state’s wealth. Wyoming builds its budget around energy prices and sales taxes that are connected to energy. When commodity prices fall, it’s difficult to fund government services.

After the oil downturn of the 1980’s funding the government was a challenge and Wyoming’s incoming Speaker of the House Kermit Brown remembers that it got especially bad in the late 90’s. 

“In 1998 we were so broke that we couldn’t get the budget balanced and we were waiting on an estate to settle for a lady in Jackson who died.

Brown isn’t kidding, the state was in dire straits.

“We were dead broke we were poorer than church mice.”

But that didn’t last, the next year the Coalbed Methane boom hit the state and there was a billion dollar surplus. Natural gas prices dropped in 2008 and the legislature was forced to cut budgets. And that didn’t last either.

Perhaps tired of the seesaw, a number of legislators decided what they really needed to do was increase savings in case prices fell catastrophically.

Brown says they decided to set aside enough money for a two year budget cycle, roughly three billion dollars.

"Because we know under tough enough circumstances, we could burn through biennium’s worth of money, just bridging our way across until the next boom starts."

If we don't have roads, if we don't have strong communities, if we don't have infrastructure, if we don't do some thoughtful things at the University and with economic development, you know we are going to go through all our money and we are not going to have anything to show for it.

House Minority Floor Leader Mary Throne says only socking away money is a bad idea. 

“Everybody around here likes to say here that in the 80’s and 90’s we only held it together with all our coffee cans of funding. I would argue that didn’t work, because the only thing that saved us was the next boom.”

Throne says investing that money is a better strategy.

“Because if we don’t have roads, if we don’t have strong communities, if we don’t have infrastructure, if we don’t do some thoughtful things at the University and with economic development, you know we are going to go through all our money and we are not going to have anything to show for it.”

Throne says that investment will help the state overcome swings in mineral prices. Strangely, she shares that philosophy with the State’s leading Republican, Governor Matt Mead. 

During a recent meeting with the Joint Appropriations Committee Mead urged legislators to use some of their savings to invest in Wyoming, so that the state can do something it often talks about, diversify its economy. The governor says spending money has been successful. He points to the Microsoft Cloud Data center, Magpul, and UL laboratories in Laramie.  

“These are all things that certainly are not what we consider mainstream historically in Wyoming, but I think they all help and you know money is put in to help those sort of companies, attract them to the state of Wyoming. “

Mead says with low taxes and cheap electricity, the recent focus on high tech is paying off the most.

“And that not only diversifies our economy in terms of revenue, but it diversifies it in terms of giving our young people more options in terms of career choices.” 

Which historically has been a problem for Wyoming. There are simply not enough jobs for college graduates. Incoming Speaker of the House Kermit Brown said data centers and new jobs are nice, but the state should really be focusing its efforts on keeping a strong energy industry. 

“I don’t know, the Minerals are such a huge component, to try and replace those is really difficult.”

And that’s how many people see it. Money given to other sectors, takes money away from the energy sector. Overcoming that attitude will be the Governor’s challenge during the upcoming legislative session.

Bob Beck retired from Wyoming Public Media after serving as News Director of Wyoming Public Radio for 34 years. During his time as News Director WPR has won over 100 national, regional and state news awards.
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