Lenhart: Wyoming should brace for a drastic change in state government
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Lenhart: Wyoming should brace for a drastic change in state government

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Wyoming was met with yet another round of sobering news recently. Our state’s revenue projections showed a massive decline in expected revenues over the next two years. It is nearly impossible to overstate how dire the situation is. Even the best-case scenarios put us in a budgetary crisis. In previous columns, I have advocated for the legislature to start planning for coming changes in our long-term revenue picture. At that time, projections showed our rainy day fund running out in the next four to six years. The most recent projections have our state’s funds running out before even the next biennium is up. That means that without major changes to state spending beginning immediately, our state is bankrupt within two years. As an illustration, to balance the anticipated shortfall the state would have to lay off every single state employee or cut the entire education budget for the whole state. The legislature no longer has the choice: it must act to address the state budget, and act fast.

We must recognize that this is not just another “boom and bust” situation. Global markets for both oil and coal have declined, and systemic changes make it unlikely that we will see anything approaching the revenues that Wyoming has had in the past. We must prepare ourselves for what comes next. We should anticipate a significant, and likely permanent, reduction in our state revenues from the natural resource sector. As this has been the primary source of government funding for decades, this means we are facing a drastic reduction in funds available for state government. Put simply, we should expect significant cuts to all areas of government – including reducing government jobs and programs – and should also expect some sort of tax increase. Where, how and to what extent those cuts and increases happen remains to be seen, but I have a hard time picturing a future where both do not occur in some form or another.

Wyoming’s future will look very different from its past. I anticipate cuts to all sectors of government. Even previous untouchable areas – education most prominently – should anticipate reductions in available funds. Our state government will have fewer people employed in it and will likely have to offer fewer services and programs. I also anticipate more of state government will be funded out of the pockets of Wyoming residents. This may change our attitudes toward state spending. Historically, we have tended to spend freely, despite Wyoming’s self-image of a fiscally conservative state. I believe this is because the funds primarily came from pockets of large, out-of-state corporations and we did not feel the personal pain from funding state government. I expect attitudes to change as more of our state revenue comes from the pockets of state residents. We will likely see a more tightfisted approach to state spending, even after the immediate crisis is passed.

If I were to advise the legislature, I would first tell it to take this situation very seriously. This is a new reality, not just another temporary “bust.” While we still see some ups and downs in revenues, I do not believe we will see the resource industry in a position to provide us with the budget surpluses we have seen in the past. I would advise the legislature to perform its duty to safeguard state funds. There will have to be significant budget cuts. I agree with those that say that those should come before any tax increase, but I also suspect that we do not have the time to sit and wait for long. Now is the time for statesmen to rise up and do what is right for the state, not what is convenient.

Lastly, if I were to advise the voters of Wyoming, I would say that this is probably the most consequential election for our state government in recent history. Candidate filing closed just days ago, so we now know who is asking to step up and deal with this issue. This is not the time for platitudes. If a candidate cannot tell you what they believe should be done about our budget crisis, they are probably not serious enough to warrant your vote. If they tell you that they oppose spending cuts, you should ask them to list what taxes they intend to raise, because that is the only alternative. The legislature is out of time to wait for things to get better. They must be prepare to act, to lead and to accept the truth about our situation, even where it is painful. Anything less is failing in their duty to Wyoming.

Khale Lenhart is an attorney in Cheyenne and a former Chairman of the Laramie County Republican Party. He can be reached at khale.lenhart@gmail.com.

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