For the first two years in the life of the Endow Council, Wyoming’s economic development think tank had one goal – charting a course for the state’s economy for the next 20 years – and one person to answer to – Gov. Matt Mead, whose eight-year tenure ended in January.
Last fall, Endow finished its goal, unleashing its long-awaited economic strategy. At the same time, state treasurer Mark Gordon – now governor – was on his way to a decisive victory in the 2018 election, ready to receive the baton from Mead and the keys to the economic development plan.
A little more than six months into his administration, Gordon is now ready to kick off the next stage of the effort: making all of the goals highlighted in the plan into realities. It just won’t be as ambitious as anyone expected.
At a meeting of the Endow Executive Council on Friday in Cheyenne, Gordon delivered a list of goals and expectations for the group over the next several months, asking them to take a more incremental approach to economic diversification than the wide-ranging plan submitted last year.
“Your efforts have been remarkable and have helped to contribute to some of the major milestones that Wyoming has seen over the past two years,” said Gordon, noting successes like the establishment of the Asia-Pacific trade office with Taiwan, the passage of workforce development legislation and the state’s broadband enhancement plan.
“With that said, I would like to ask you to help me take this plan we’ve developed and turn it into ‘action pieces,’” Gordon said in prepared remarks to the council. “You’ve given two years of work to come up with some very smart ideas. Now I’d like to see how we could put those into action. I do not believe we can do it all at once, and as I said back in January, I am concerned we – as a state – simply lack the resources to implement everything in that 20-year strategy right now.”
To address this challenge, Gordon asked council members to take the five economic development strategies they had developed in last year’s plan and to try and select just one, though he hinted others could be chosen if they’re found to be feasible. After this is completed, Gordon asked the council to write a detailed plan of how those proposals can be put into action and achieved within the next two to three years, with defined and measurable results.
Spending money to make money
On the campaign trail in 2018, Gordon would often speak of a need to diversify the state’s economy and to examine its tax structure in an effort to shift the state’s revenue streams away from the volatility of oil and gas, and from coal, which is rapidly losing ground as a reliable source of income for the state.
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“We all know a diverse economy is a much more resilient and, therefore, much less prone to ‘boom and bust,’” said Gordon.
His upcoming strategy for Endow, he said Friday, hopes to reflect those realities. However moving forward, he said, any conversation about economic development and the state’s revenues can no longer take place independent of one another.
Gordon told members of Endow to find ways to analyze the revenue impacts of their proposal to the state, asking whether or not that effort would cost or make the state money. Additionally, Gordon announced that he had formed a task force of experts from agencies across the state led by the University of Wyoming’s Steve Farkas to study the state’s tax structure and produce models that will allow his administration to take “a realistic view” of the state’s energy-reliant tax structure.
Much of that conversation, he said, will require the input of the private sector, particularly Endow, to yield positive results.
“As Wyoming’s economy grows and diversifies, we need to better understand the opportunities and challenges they present to our revenue,” Gordon said.
Part of this strategy, one of his policy advisors noted, means confronting an inconvenient truth head-on: that any economic development effort, in the short-term, will inevitably be revenue-neutral, something that will only be made apparent by the governor’s request for a measurable return on investment from the council.
“If it’s not mineral related, there’s a high likelihood it will be revenue negative,” said Rob Creager, a policy advisor and Gordon’s lead on the Endow efforts. “So to your abilities, you have to figure out what that number would be. Economic diversification is important, but we want to know what, if we could implement all the ideas you are proposing over the past two years, what it would look like for the state’s budget.”
This does not mean, however, that plans will be scrapped if they turn out to be revenue negative, Creager said – only to show what the budgetary impact of economic development is in a transparent matter, and to glean out how those ideas would compare to each other under different revenue models.
“It may have an upfront cost, but it may generate revenue down the road,” said Renny Mackay, another policy advisor in Gordon’s office.