CHEYENNE - Diversification of Wyoming's minerals-driven economy has been an elusive goal for at least the past four or five decades.

The state's pattern in the past was to create programs to grow the economy only when the state was in the economic trough. Once the price and production of Wyoming's coal, oil and natural gas picked up, the programs to wean the state from its dependence on minerals were tossed aside.

The casualties included the Wyoming Ambassadors program of the late 1960s and early 1970s. This venture took groups of elected officials and community leaders to New York or Chicago, where they entertained business leaders with elk steak dinners while pitching Wyoming as a great place to be home to their operations.

When the coal boom hit in the mid 1970s, the ambassadors stayed home.

In the mid 1990s the risky Amendment 4 and clean-coal technology loan programs - created during the 1980s energy bust - were junked after they produced disappointing results.

With the state now in an explosive boom from natural gas development, diversification of the economy could easily be put on the back burner as it was in the 1970s. But so far that hasn't been the case.

Still, although there is widespread support for economic development, there is no consensus on what direction the state should take. And shortages of both workers and housing in Wyoming pose significant hurdles for any attempts at economic diversification.

The next debate

The freshest debate will be whether the state is on the right path for diversification with the structure of the Wyoming Business Council, created in 1998 from a host of 25 programs in seven state agencies.

Democratic Gov. Dave Freudenthal said he believes the Business Council is headed in the right direction with the Business Ready Communities grants program, the most visible and popular of the Business Council programs.

The grants, which go through the council and the State Loan and Investment Board that includes the governor and the state's four other elected officials, help local governments provide streets, sewers, business parks and other infrastructure and amenities that market research claims are essential to enticing new business.

"We need to have an honest strategy," Freudenthal said in a recent interview. "An honest strategy is this is a resource state and we need to build on that - and it is a lifestyle state."

"When you say, 'We have to do more to diversify the economy,' you have to build on what you have and try to get your strengths up and continue to diversify but be realistic," the governor said. "We're not going to get an automobile manufacturing plant here."

Ray Hunkins, a Wheatland lawyer and rancher who is running for the Republican nomination for governor and a chance to challenge Freudenthal's bid for a second term, said the Business Ready Communities program is good for the communities - but is not economic diversification.

Hunkins said he will release his plan for economic development in Wyoming in six weeks to a month. The report will address what Hunkins regards as the general root problem - "the absence of vision and a plan."

If the state doesn't diversity the economy when times are good, he said, then it will endure really bad times when the natural gas bonanza withers.

The state ought to be adding value to its natural resources that are being shipped elsewhere in increasing quantities, he said.

"That's the difference between first world and third world economic development," Hunkins said.

Adding value to the natural resources through processing or other means before they leave the state would also add a layer of white-collar workers to the state's natural resource labor force.

Hunkins noted that 10,000 University of Wyoming graduates live in the Denver ZIP code and said they should have the opportunity to come back and work in Wyoming.

He also wants to step up recruitment of out-of-state businesses. He maintains the 2 percent of the Business Council budget dedicated to business recruitment isn't enough.

'It's working'

Tucker Fagan, director of the Business Council, said the $1.76 million dedicated to recruitment in the agency's budget for 2007-08 is a dollar increase over previous years. The percentage is lower because so much more money is going into other community development programs, he said.

The new Business Council budget totals $108 million, including $86.5 million for council programs and $21.5 million for tourism. The budget includes $46 million for Business Ready Communities.

Fagan is convinced the state is on the right track.

Despite its attractive tax climate, Wyoming didn't grow for 45 years because the communities lacked what the businesses wanted and needed - that physical infrastructure, he said.

"We were bringing in clients but were unable to close the deal," Fagan said.

Today, more than 70 of the state's communities have performed local assessments to identify their strengths and weaknesses and help them decide what they need next to grow.

"I think it's working this time. I honest to God believe it is. We are not using taxpayer money to invest in high-risk companies. It's as much de-politicized as we possibly can," Fagan said.

Over time, he said, he expects the amount spent on infrastructure will go down and the dollar share for recruiting businesses will go up.

Other ideas, observations and suggestions are out there as well.

Another view

Anthony Swenson is a consulting archeologist who lives in Worland but works primarily in southwest Wyoming.

He's for economic development, but is not impressed by the Wyoming Business Council - particularly the suggestion that Worland try to recruit a call center to handle catalog orders or to build a business park.

With a population of about 5,250, Worland doesn't have enough people to meet the high turnover of a call center, Swenson said.

As for the business park, he said that might be a good option for a town with a shortage of commercial real estate.

"But we have commercial, retail and manufacturing buildings sitting empty all over. We really don't need a business park," he said.

"I don't like corporate welfare, especially if it goes to big corporations that obviously don't need it," Swenson added.

He also said that small businessmen are concerned the Business Council will subsidize competitors.

Banging the drum

Bill Schilling, executive director of the Wyoming Business Alliance, said he thinks the Business Council is doing a fine job with the limited amount of money it has to work with.

He maintains that on a percentage basis, the state's economy, in fact, is less diversified today than it was five years ago because the bulk of the growth has been in the mineral sector.

"Now that the Business Ready Communities program is humming along, it's time to look at the whole marketing side," Schilling said.

He said he has been banging the drum for a decade on the need for the state to launch a major marketing campaign to sell Wyoming as a desirable place to live and get more people to move here. This effort would be in addition to continuing business recruitment efforts.

He noted that all business sectors, not just the minerals industry, need workers.

"Government is really bad at picking winners and losers," said Sen. Cale Case, R-Lander, an economist. "The bottom line is for projects that make sense."

A project that makes sense and dwarfs the Business Council budget is the state construction program that includes $1 billion in new school construction, Case said. In his view, this is a huge economic development tool being overlooked by the state.

If the school construction program could be spread over 10 years, rather than building the schools as fast as possible with out-of-state contractors, Wyoming could develop its own in-state construction work force, he said. Wyoming's construction industry could grow, keep people employed and train new tradesmen and apprentices as part of a stable work force.

"And the people who build the schools can stay and be part of their community and send their kids to these schools," Case said.

Minerals' role

Former legislator Matilda Hansen, a Laramie Democrat, blames the mineral industry tor the failure of previous efforts at economic diversification, including the demise of the Amendment 4 low-interest business loan program.

Economic development brings more workers into the state and triggers the need for more schools, roads and water and sewer systems. The activity, in turn, boosts property values and taxes.

Because the mineral industry pays the bulk of property taxes in the state, it opposes growth, Hansen reasons.

"They see economic development as a threat to their bottom line," Hansen said. "They have been fighting it for 50 years."

"I guess I disagree," said Bruce Hinchey of the Petroleum Association of Wyoming. "I don't ever remember not supporting economic development as a legislator and in this position," added Hinchey, a former state House speaker.

He said association members have always talked about their desire for a more diversified economy.

Greg Schaefer of Arch Coal Inc. said his company strongly supports diversification to broaden the tax base. If the economy goes south again, the state has to find money to pay for services and programs the Legislature authorized, he said.

And the lawmakers are apt to turn to the mineral industry to get those dollars.

Capital bureau reporter Joan Barron can be reached at (307) 632-1244 or at joan.barron@casperstartribune.net.