Wyoming is in a difficult financial situation.
The energy industry, long the backbone of the state economy, is undergoing transformations beyond its control that will not allow it to support the entire state far into the future. The recent downturn in the sector – along with Wyoming’s heavy reliance on it for financial support — has prompted an $800 million shortfall in school funding for the next two-year budget cycle and a new conversation about how to raise revenue.
Lawmakers must address these factors and more in their next session, which starts early next year. Already, some are working on bills that would provide a fuller picture of the state’s financial situation – and incredibly, some would rather consider that situation without a full accounting of Wyoming’s fiscal outlook.
Rep. Jerry Obermueller, for example, recently proposed a bill that would simply catalog the total gross sales of Wyoming companies, so economists would know what portion of business is being done by out-of-state firms that don’t contribute to the general fund.
“I think most people would probably believe that the people of Wyoming deserve to know what our economy looks like and would not be interested in sheltering them from that knowledge,” Obermueller told the Star-Tribune.
But even that measure – which did ultimately pass the committee — was a nonstarter with a few members of the Revenue Committee, which indicates the bill would be a tough sell in front of the full Legislature.
These lawmakers would rather deliberately put themselves in the dark than collect all the information available to make the best decision possible for Wyoming and its future.
That’s both ineffective and irresponsible. They were elected to make the best decisions possible for the state, and that can’t happen if they don’t fully explore all options on the table for this important process. Why would they choose to make these choices with less information than they could and should have?
All this means that revisions to our tax code are unlikely. Severance taxes, mineral royalties and other money paid to the state by energy firms currently accounts for up to 70 percent of public money in the state each year – but that’s unsustainable, based on changing markets worldwide. Moreover, it makes it more difficult for Wyoming to transition to a more diversified economy. Something must change. So what options is Wyoming left with?
Some lawmakers say cuts are the way to go; they say there are areas of waste to trim in state government. We challenge those legislators to publicly identify those areas of waste and tally how the savings compare with the massive shortfall the state is facing. So far, Wyoming voters have heard few ideas for cuts that will truly make a difference.
There is also the possibility of increasing existing taxes or putting new ones in place. But recent events indicate that lawmakers have no appetite for raising money to support our schools and other public spending. Significant changes don’t have a chance, and even low-hanging fruit such as increasing sin taxes – levies on optional purchases such as cigarettes and alcohol – fails to gain traction.
To be clear, we’re not endorsing a strategy of taxing our way out of this mess. But only a balanced approach — one that involves availing ourselves of all options — will lead to success.
Wyoming’s tax structure is lacking that balance. As long as lawmakers continue to insist on cuts rather than new revenue but then never specify those cuts or address the massive shortfall they were elected to fix, the state’s financial situation will remain perilous. It’s time for true leaders to step up and make the difficult choices that must be made to put our state on the path to prosperity now and into the future.