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National economic gains may hide trouble for Wyoming's newfound stability

Like a powerful car with its pedal pressed to the floor, the national economy is burning hot, but that engine could overheat at risk to Wyoming, according to an end-year economic summary from the Wyoming Economic Analysis Division.

Wyoming is rumbling along, at least compared to two years ago. A jump in sales and use tax income from the end of 2016 to the end of last year is one of the largest in recent memory, according the state report. That revenue tells a story of increased spending up in coal country and from the oil and gas firms drilling in Converse or Campbell counties. State regulators are facing an unprecedented backlog of applications to drill.

As the state recovers from low oil prices and depressed revenue, the country’s positive economic state is encouraging the industries that power Wyoming.

Still, the state’s reliance on fossil fuels, as well as the weakness of its post-downturn economy, makes Wyoming vulnerable to uncertainties noted by state economists. Political decisions meant to boost the national economy could make it overheat. Employment opportunities offered by growth could tighten the job market and cause inflation. And tariffs could start a trade war that destabilizes the market, a particular risk for Wyoming’s cornerstone industry: oil and gas.

Why the bad news?

Globally, numbers are strong and national growth is robust. The downside is that the growth isn’t what most economists would call sustainable. It can overheat the economy and lead to recession, economists say.

“Think about what happens if you are going to increase production beyond the normal capacity of a plant,” said Rob Godby, an economist at the University of Wyoming. “You have to add, probably, an extra shift. You’re going to have to pay those workers overtime, and you are going to run the equipment in the factor much harder than normal and it wears more quickly.”

The state report notes that national unemployment is incredibly low, a surprising worry for economists. Having too few people looking for work means wages becomes more competitive. That pushes up prices and can cause inflation and recession.

For the time being, the U.S. is using up a part of the work force that hasn’t been counted for some time: people who lost work during the Great Recession and gave up, said Godby.

“What we’re doing is we’re healing,” he said. “We got all these people that got shoved out of the workforce and this is their chance to get back in.”

And that’s okay for now, even good. But it can only last until those workers are absorbed back into the labor force, he added.

Wyoming jobs

At 4.2 percent, Wyoming’s unemployment numbers are on par with the national numbers, if slightly higher at the close of 2017.

Unlike the national picture, people who lost jobs in Wyoming after its recent downturn simply left or retired. The labor pool shrank. The unemployment rate looks better, but mostly because there are fewer people in total, economists say.

The state’s job growth rate is improving — closing in on the national average as a result of increased activity in the mineral industries, according to the report. Wyoming extractive industries added 2,000 industry jobs last year.

But the year-over-year job growth rate comes with a mitigating factor in Wyoming, too.

It’s compared to our low point, said Wenlin Liu, chief economist at the state Economic Analysis Division, author of the report.

“Wyoming’s total employment level in 2017 was the lowest since 2006, when our coal-bed methane boom just started, and was nearly 6 percent lower than our peak year of 2008,” he said.

Political grey clouds

It’s not just wonky economic theory that Wyoming economists are tracking — it’s politics.

“The largest downside risk on the horizon is the Trump administration’s recent decision to impose tariffs,” the report states.

The oil industry has been vocal, from Wyoming to Texas, arguing that President Donald Trump’s tariffs on steel and aluminum threaten their industry. Economists agree that the tariffs come with risks like trade wars that will undermine all the good economic news.

Less obvious from the political spectrum is that the overheating economists are worried about is in part related to a recent injection of stimulus money from Congress.

Congressional choices to fund tax cuts with debt and pass a major spending bill may also have economic consequences nudging the country towards inflation and recession, according to the report.

“The best way to avoid the potential overheating is to speed up the labor force and productivity growth,” the report states. “However, neither one is expected to return to their prerecession pace, largely due to the fast aging of U.S. population.”

Wyoming economics

Wyoming’s economy is not at its best right now. It’s still in recovery mode from the bust in oil prices, depressed prices of natural gas and a surprise downturn in the coal industry.

“If you think of a recession of falling down a well, it ends when you hit the bottom,” said Godby, the UW economist. “It takes a certain amount of time to climb your way back out of the well.”

Wyoming is climbing back to normal, but it’s not nearly there yet.

News of the national economy’s progress is good for Wyoming in a number of respects.

National growth means demand for what the state does best — churn out fossil fuels to power the trucking, manufacturing and construction industries across the country. It’s helping Wyoming climb out of its own recession faster.

Economist worry that a combination of positive factors could potentially make a good story a bad one, particularly in a state that hasn’t yet recovered from economic blows.

Wyoming state-run air service moves forward, framed as essential to economic diversification

Of all the ideas to diversify — some say save — Wyoming’s economy, more reliable air service is hardly the most exciting. That distinction likely goes to the plan for making Wyoming a “cryptocurrency” hub, or perhaps it goes to doubling-down on research for drones and flying cars.

But reliable transportation in and out of the state stubbornly remains a top priority for local businesses and those considering relocating here.

“One of the first questions asked is about transportation: air service, highway transport, rail,” said Dave Hanks, CEO of the Rock Springs Chamber of Commerce. Sweetwater County is one of several communities that currently receives WYDOT-subsidized air service.

“We have multinational corporations here — headquarters in Turkey and Belgium and all over the world — so it’s very important for us to have connectivity,” Hanks said.

With similar messages echoed by corporate leaders across the state, WYDOT presented an ambitious plan to lawmakers over the summer: The state would effectively create a state-run airline. Many lawmakers initially balked over several parts of the proposal, including its cost, its supposed interference with private market and its lack of clarity.

In the end, the economic development committee rejected the plan last fall. But Gov. Matt Mead’s Endow Council, focused on diversifying Wyoming’s economy, placed securing reliable air service at the top of its preliminary report in January. Sen. Michael Von Flatern, R-Gillette, then individually sponsored the same legislation that the full committee had turned down.

With more clarity — and perhaps more time to consider the matter — the Legislature agreed to the plan during its four-week budget session this winter. If all goes according to plan, “Air Wyoming” could take to the skies as soon as next fall.

Air Wyoming —

without the branding

The plan is to use a so-called “capacity purchase agreement” to ensure reliable, convenient and affordable air service across Wyoming. Those are the contracts that large carriers currently have with regional providers like GoJet or SkyWest.

“What the likes of United and Delta and America do is say, ‘We want 100 of your airplanes, we’re going to brand them as American Airlines and we’re going to pay you to fly them and tell you where to fly them,’” Nick Wrangler, a consultant hired by WYDOT, explained to lawmakers last year.

Under the WYDOT plan, the State of Wyoming would assume the role of carrier, negotiating a contract for a provider to offer certain flights, at certain times, to and from certain cities and at prices dictated by the state.

That stands in contrast to the current arrangements through which the state offers minimum revenue guarantees to airlines serving small markets. Carriers are assured they won’t make less than a certain amount of money if passengers don’t buy tickets. But local airports have no say over when the airline schedules its flights or how much it charges for tickets, and carriers can always cancel flights or suddenly pull out of the market.

In addition to offering more reliability and control, it is expected to be less expensive than the current state subsidies for air service. Von Flatern said a statewide capacity purchase agreement would cost the state roughly $15 million over 10 years as opposed to the current $32 million being spent over the same period for existing payments to airlines operating in the state.

One reason for that is individual airports have far less bargaining power than when they band together.

“If the State of Wyoming is stepping in and doing that it carries a lot more clout,” said Hanks, of the Rock Springs chamber.

The bill passed by the Legislature creates an advisory group composed of lawmakers, members of the Endow Council as well as WYDOT and local representatives. Von Flatern said that by this fall the group should have an ideal plan in mind and begin negotiating a contract with an airline. That agreement will then have to be approved by the Legislature early next year.

“They have to decide things like how many airplanes will be needed, how many airports will be involved, what time of day will the flights be, what will the general pricing be,” Von Flatern said. “They’ll have to hustle.”

2019 take-off goal

WYDOT aeronautics division administrator Amy Surdam said her agency’s goal is to have the new flights, dictated by the state in consultation with local communities, taking to the skies by September 2019.

Once that happens, passengers shouldn’t expect to see plane bodies skinned with the WYDOT logo or tails adorned with Steamboat. Wyoming isn’t creating its own version of Aeroflot, the former flag-carrier for the Soviet Union that still features a winged hammer and sickle as its logo.

“We aren’t going to do any branding,” Surdam said. Nor will people have to navigate a state website to make flight reservations. “You’d still be able to go onto Expedia or Orbitz or the United platform.”

While some small carriers, like GoJet, do not appear to offer their own ticketing platform and exclusively serve larger airlines, Surdam said the goal is to find a carrier that can brand their own planes and sell their own tickets.

Rock Springs, Riverton, Sheridan and Cody currently rely on subsidized air service for at least part of the year. Von Flatern said he expects those airports to sign on to the new plan but that it would be open to all commercial airports in the state.

Cheyenne recently lost commercial air service when locally-based Great Lakes Airlines announced the abrupt end of service after years of unreliability. The move underscored the tenuous nature of many Wyoming communities to the national air service network.

Rural communities have been plagued by a combination of increased and decreased federal regulation in recent years. The deregulation of commercial airlines in the late 1970s put an end to the requirement that carriers serve small communities that were not profitable, or less lucrative than busier routes. The federal government stepped in with its own subsidies to incentivize airlines to fly to small cities anyway. But following a commuter airline crash in New York state in 2009, the Federal Aviation Administration increased the level of experience that pilots on smaller flights must have, making it more difficult for regional carriers to hire pilots.

The Trump administration has also proposed eliminating the federal subsidies, which in Wyoming are used by Cody and Laramie, though Congress has not approved those cuts.

Casper is one of the few airports in Wyoming that does not rely on any subsidies for its air service, and airport manager Glenn Januska said he is unlikely to participate in the statewide plan. However, he added that if other WYDOT funds are freed up by the new arrangement, Casper might pursue money to help cover start-up costs for a carrier looking to come into the Casper/Natrona County International Airport, such as waiving landing fees or paying for marketing if American Airlines wanted to start offering service to Dallas or Phoenix.

“If they go into a new market ... they are looking for communities to absorb some of the risk for doing that,” Januska said. “What we’ve always looked at is some fund availability to help reduce the risk.”

Whatever the final details of the new plan, Von Flatern said that without air service many other economic diversification efforts will be for naught. He noted that even a city like Gillette, which similar to Casper does not rely on subsidies, has seen its regular service reduced as the local carrier was forced to cut flights in order to serve a contract to provide more planes elsewhere. Von Flatern said the state-run service agreement could fix problems like that.

“Lack of reliable air service is just the killer of economic diversity,” he said. “When you can no longer fly out of a town, you just really hurt the towns. You handicap them and this is what that’s trying to alleviate.”

Trump on deal for 'Dreamer' immigrants: 'NO MORE' (copy)

PALM BEACH, Fla. — President Donald Trump on Sunday declared "NO MORE" to a deal to help "Dreamer" immigrants and threatened to pull out of a free trade agreement with Mexico unless it does more to stop people from crossing into the U.S. He claimed they're coming to take advantage of protections granted certain immigrants.

"NO MORE DACA DEAL!" Trump tweeted one hour after he began the day by wishing his followers a "HAPPY EASTER!"

He said Mexico must "stop the big drug and people flows, or I will stop their cash cow, NAFTA. NEED WALL!" The U.S., Canada and Mexico are participating in tense negotiations over the North American Free Trade Agreement at Trump's insistence. Trump says NAFTA is bad for the U.S.

"Mexico has got to help us at the border," Trump, holding his wife's hand, told reporters before the couple attended Easter services at an Episcopal church near his Palm Beach, Florida, home. "If they're not going to help us at the border, it's a very sad thing between our two countries."

"A lot of people are coming in because they want to take advantage of DACA," he added.

Former President Barack Obama created the Deferred Action for Childhood Arrivals program to provide temporary protection and work permits to hundreds of thousands of immigrants who are living in the U.S. illegally after being brought here as children. Trump ended the program last year, but gave Congress six months to pass legislation enshrining it. A deal has so far proved elusive and Trump has blamed Democrats.

It was not immediately clear what Trump was referring to when he said people are coming to take advantage of the program.

The Department of Homeland Security is not issuing new permits, although existing ones can be renewed. The Obama administration allowed sign-ups during a set period of time, and the program is closed to new entrants.

Proposed DACA deals crafted by lawmakers and rejected by Trump also were not open to new participants.

Trump did not explain what he meant when questioned by reporters as he entered the Church of Bethesda-by-the-Sea with the first lady and his daughter Tiffany. The White House did not immediately respond to a request for clarification.

Trump, when addressing reporters briefly before entering the church, again blamed Democrats for failing to protect the "Dreamers."

"They had a great chance. The Democrats blew it. They had a great, great chance, but we'll have to take a look because Mexico has got to help us at the border. They flow right through Mexico. They send them into the United States. It can't happen that way anymore."

Trump promised during the 2016 presidential campaign to build a southern border wall to stop illegal immigration and drugs from Mexico, but Congress has frustrated him by not moving as quickly as he wants to provide money for construction.

The president also complained on Twitter that border patrol agents can't do their jobs properly because of "ridiculous liberal (Democrat) laws" that allow people caught for being in the country illegally to be released while they await a hearing before a federal immigration judge.

Trump tweeted that the situation is "Getting more dangerous" and "Caravans" are coming. He did not offer details to back his comment.

The president's tweets came after Fox News' "Fox & Friends" reported early Sunday on what it said is a group of 1,200 immigrants, mostly from Honduras, headed to the U.S. The segment was a follow-up to a report by Buzzfeed News on hundreds of Central Americans making their way through Mexico in hopes that American authorities will grant them asylum or be absent when they attempt to cross the border.

The Fox headline was "Caravan of illegal immigrants headed to U.S." The president is known to watch the cable TV program in the morning.

Brandon Judd, leader of the union representing border patrol agents, predicted on "Fox & Friends" that those in the caravan would create havoc and chaos in the U.S. as they wait for what he described as immigration reform. Judd also said Congress needs to pass tougher laws, an idea Trump appeared to echo, and create more bed space for immigration authorities to house people.

Ohio Gov. John Kasich, a Republican, chided Trump over the tone of the tweets.

"A true leader preserves & offers hope, doesn't take hope from innocent children who call America home. Remember, today is Easter Sunday," tweeted Ohio Gov. John Kasich, a Trump critic who challenged him for the 2016 Republican presidential nomination.

Arizona Republican Sen. Jeff Flake, another Trump foe, urged Congress to take up the fight for Dreamers.

"There are plenty of lawmakers on both sides of the aisle who stand ready to work with the administration on legislation to protect DACA kids who call America home," he tweeted. "Let's do it."

Sunday's church visit was Trump's first public appearance with his wife since CBS's "60 Minutes" aired an interview the previous Sunday with Stormy Daniels, the adult film star who says she had sex with Trump in 2006, early in his marriage and a few months after the Mrs. Trump had given birth to their son. The White House says Trump denies the affair. Mrs. Trump spent most of the past week in Palm Beach with her son.

The Trumps returned to Washington later Sunday.

File, Star-Tribune  

Wyoming’s Antonio Hull knocks down a two-point conversion attempt by San Diego State on the final play of the game Nov. 19 at War Memorial Stadium in Laramie. The Cowboys’ win essentially eliminated any chance of the Mountain West being represented in the College Football Playoff, which would have brought more money to the conference and, ultimately, Wyoming.

Mama's bears: Nordic study shows family groups stay safe from hunters

In a variation of “women and children first,” Scandinavian biologists found that female brown bears keep their cubs close a year longer than usual as defense from hunters.

“The young are like a shield, a protection, that increases the survival of the mother,” said Jon Swenson, a professor at the Norwegian University of Life Sciences in As, Norway. “If that’s inheritable, and it might be, then it’s an example of hunter-induced evolution. Animals respond to selection pressures, and a lot of hunting is selective.”

While wildlife managers in Wyoming, Montana and Idaho debate how to set up grizzly bear hunting seasons, Sweden has decades of experience hunting a similar species. And Swenson has a tight connection, too: He grew up in Shepherd, Montana, and once worked for Montana’s Department of Fish, Wildlife & Parks.

About 3,000 brown bears inhabit Sweden, a country slightly larger than California. About 2,000 grizzlies live in the three-state area around the Northern Rocky Mountains, where their population increases about 3 percent a year. The Swedish brown bears, in comparison, grow by about 15 percent a year.

Last July, the U.S. Fish and Wildlife Service removed Endangered Species Act (ESA) protection for roughly 700 of those American grizzly bears in the Greater Yellowstone Ecosystem and turned their supervision over to state wildlife agencies.

Wyoming’s Game and Fish Department announced plans to hold a grizzly big-game hunting season starting this September, with a potential quota of 24 bears. The Idaho Department of Fish and Wildlife followed suit, with a single-bear limit for 2018.

Montana’s Fish and Wildlife Commission decided to skip a 2018 grizzly season. Its commissioners cited the possibility that federal lawsuits opposing the ESA delisting could postpone or cancel any state hunt this year.

Grizzly debate has lawyers running in packs to the Missoula, Montana, courthouse

Sweden has no individual limit on killing brown bears, although it does have regional quotas that end the season once reached. Swedish hunters who buy an annual permit (similar to a Montana conservation license) and pass an annual rifle-handling course may shoot almost any bear they find during the hunting season, Swenson said. They may not shoot bears in family groups, however.“It used to be only Swedish hunters hunting bears for meat and rugs,” Swenson said. “But now we have foreign hunters and a lot of money involved. That’s something that’s changed in the last 10 years.”

But while taxonomically Swedish brown bears and American grizzly bears are identical, in the woods they’re quite different. North American Ursus arctos horribilis are known for ferocity and occasionally eating livestock or picnic supplies. Swenson said Swedish Ursus arctos arctos rarely encounter people or raid human food. Thousands of years of persecution by humans has turned them into secretive, highly nocturnal, vegetarian animals the Swedes often call ghost bears.

Female brown bears in Scandinavia tend to be about 10 percent smaller than their American grizzly cousins, and they reach breeding age sooner. For a long time, having cubs at a younger age and raising them for only one and a half years was a good adaptation to human hunting pressure. But increases in hunting interest and kill quotas in Sweden appears to be changing that family behavior.

This presents a tricky tradeoff. Spending just one and a half years raising cubs means a female can mate more often, adding more cubs to the population. But spending two and a half years as mom means more cubs survive to adulthood. Male bears often kill a sow’s cubs in order to restart her breeding cycle. People kill mature bears during hunting season.

Swenson’s study showed solitary female bears were nearly four times more likely to die from hunting than those that hung around with their offspring. So sticking with the family helped both cubs and mature females live longer in Sweden.

“For managers we were interested to know how much has this change affected the population growth rate,” Swenson said. “The lower reproductive rate was offset by a higher survival rate of the female. And we see that keeping the young for that extra year increases the survival of the young.”

Wildlife managers in the Rocky Mountains have the same interests as they consider hunting quotas for delisted grizzly bears, according to FWP bear biologist Cecily Costello. However, American grizzly moms already keep their cubs for two and a half years, without hunting pressure. Costello got to do some field work in Sweden, including observing a helicopter capture of a brown bear.

“It made me realize they’re a little bit of a different bear than they are here in the Rocky Mountains,” Costello said. “They have a different personality.”

Sweden has recorded 40 bear-related injuries and two human deaths in the past 40 years.

“Some of them are weird things like a teenage boy who was skiing off-piste and fell into a bear den with a sow and cubs inside,” Swenson said. “You always end up with things like that in the statistics.”

On the other hand, Swedish brown bears like to hunt reindeer calves in the nation’s northern regions. This angers the indigenous Sami communities who herd reindeer. Swenson said the Swedish government last year issued so many bear kill permits for livestock protection that it couldn’t offer a public hunting season in one region: The quota had already been filled and the bear population shrunk by 10 percent.

“Any season we would have, at least right now, is going to involve a pretty small number of individuals,” Costello said. “And any hunting mortality has to fit into what’s left over after we account for other sources of mortality (poaching, roadkill, management removals). It wouldn’t have the kind of effects that it has in Sweden where they have a lot more hunting pressure.”