We’ve all heard the news: it’s raining in Wyoming.
Falling energy prices have resulted in fewer jobs and declining revenues for local and state government. Over the next few years, Wyoming is expected to face an over $600 million shortfall in anticipated revenues.
In Wyoming, 66% of our budget (FY2015) is derived from current and historic mineral production. Declining energy prices coupled with efforts in Washington to regulate Wyoming energy out of existence, make our budget future anything but certain. It is estimated that federal regulations surrounding natural gas, and changes in the oil and coal markets, have resulted in over $300 million in financial losses for Wyoming.
However, boom and bust cycles are nothing new to our state. And while we can’t control the energy sector, we can control our budget.
That’s why the Wyoming State Legislature has worked diligently over the past several years to build up our savings and keep spending measured. We’ve worked hard to control the growth of government over the last four years while developing reserves required to maintain services.
In the last two budget cycles, Wyoming has saved over $1.1 billion. According to several national organizations, Wyoming is one of the very few states leading in fiscal responsibility.
What we have spent, we’ve spent wisely, building foundations to help get us through these lean times and lessen future downturns. We’ve invested in one-time infrastructure projects and education systems across the state. We’ve supported towns and counties to grow their communities and local economies. And we’ve funded projects and programs to diversify our economy and help ensure an economically viable future for our energy sector
When it comes to addressing our budget shortfall, there is no silver bullet. As lawmakers, we are looking at any and all options to continue funding essential programs and projects while ensuring we are as prepared for the next energy downturn as we are today.
From exploring reductions in the standard budget, investing to diversify and grow our economy to tapping into reserves, Wyoming needs to strike a balance among saving, investing and spending. We’ll need to examine ways to streamline agency processes, eliminate duplicative programming and find opportunities to scale back on initiatives that aren’t producing measurable results for taxpayers. Wyoming also needs to ensure lawmakers have the flexibility to continue to make smart investment decisions with state savings.
While trimming our budget will help ensure Wyoming is living within its means during an energy downturn, it will be no easy task. Cuts and funding reductions will have real impacts on our schools, communities and local governments. Throughout the budget session, legislators must be diligent, thoughtful and targeted when deciding where to allocate funds.
Recognizing the risks and challenges of a state budget so heavily reliant on one industry, the Wyoming State Legislature has been investing in projects and programs that aim to diversify our economy. As a result, we’ve seen growth in many sectors including tourism, construction and technology. Investing in the growth of these industries is an investment in the future of our state, and an insurance policy against dramatic state budget swings courtesy of fluctuating energy prices.
At the same time, however, we have worked to ensure a role for Wyoming energy not only in the coming months and years, but decades. With a revenue stream reliant on mineral production, it’s essential for Wyoming to take a pro-active approach in protecting and promoting our energy sector. We’ve worked hard to make targeted investments in opportunities to protect and grow our energy economy such as the energy mega-campus, coal export terminals and the Integrated Test Center.
In the days ahead, Wyoming legislators will have to make many tough decisions. Decisions with the potential to impact nearly every Wyoming citizen. Decisions that will inevitably force us to make compromises with the shared goal of ensuring a brighter future for our state. Decisions that we can’t take a rain check on making.
Eli Bebout, Senate Majority Floor Leader
Rosie Berger, House Majority Floor Leader
