The interdependence of Wyoming’s cities could lead to economic troubles in the long run, cautions a new report by community development advocacy group Strong Towns.
Cities in Wyoming depend on natural resource revenue to fund a substantial share of public services, including education. A case study on Wyoming within the larger report, examining how money from resource extraction flows through its cities, found that the state’s financial centralization left cities vulnerable to any decline in state funds.
“In the case of Wyoming, what you see are natural resource-based industries — oil, gas, mining — where you’re consuming a non-renewable resource, and when it’s gone, it’s gone. And that’s not the foundation for prosperity,” said Daniel Herriges, senior editor for Strong Towns and the author of the Wyoming case study.
The case study accompanied a 29-page ebook titled “Breaking Out of the Resource Trap: An Economic Plan for Resource-Based Communities.” According to the report, dependence on extractive industry can lead cities into a “resource trap,” in which a community is viewed as a cost, rather than a resource. Fixated on efficiency, such cities undergo cycles of cost-cutting and consolidation, while neglecting local prosperity.
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For a community to break out of that resource trap, the authors argue, is “to reinvent itself and grow its own capacity, to become a place that does not depend on the resource for its survival, to become a Strong Town.” A strong town is defined by the report as a place that can sustain itself over time.
Diversification of revenue sources is essential to breaking out of the resource trap, Herriges said. Just as diversification of a stock portfolio buffers it against disruptions in the market, he said, broadening sources of income protects cities from financial volatility in the industries they depend on.
In Wyoming, according to the report, cities’ consistent access to state funds has allowed them to circumvent much of the small-scale economic development that ordinarily sustains strong towns.
“The incentive to actually cultivate local entrepreneurs, the incentive to have a really strong downtown that that can attract tourists or that can that can serve as a platform for local businesses that people want to patronize, as opposed to non locally owned businesses — all of those incentives are dulled when your budget is predominantly dependent on the extraction of some natural resource,” Herriges said.
Cities were historically built block by block, and establishing a strong town requires that same sort of incremental investment, particularly in the downtown core of a community, Herriges said. He characterized the rapid suburbanization and large-scale development seen in cities like Casper as being extractive in their own way: They tend to transfer wealth out of cities and into the pockets of corporations headquartered elsewhere.
“When you see rapid suburbanization to the detriment of the downtown core of a community, it ends up mimicking some of the same economic problems that you see in the long term with natural resource extraction, where you get a windfall up front from all of this growth, almost like an economic sugar rush, but it doesn’t do anything to produce long-term prosperity. And it in fact saddles you with long-term liabilities,” Herriges said.
Those liabilities come in the form of infrastructure — roads, sewers, and other structures that must be maintained by the city, no matter whether the areas where they lead are profitable. If cities’ growth can’t be sustained, their investments in infrastructure can become lasting economic burdens.
But Cindy DeLancey, president of the Wyoming Business Alliance, says that in Wyoming, where there’s plenty of space for cities to expand outward, development in one area doesn’t necessarily limit growth in another.
“We all benefit by having as many people employed and as many opportunities for people to spend money in our economy as possible,” she said. “I think any business is good business, no matter where it is.”
She views the cities’ interdependence as a strength, not a liability. Though markets are shifting, DeLancey expects the state to expand its sources of revenue, allowing it to continue supporting its cities in the years to come.
