On its surface, the news that Wyoming is projected to bring in more revenue than previously anticipated is good. More revenue in state coffers means our economy is improving. That means more money in the pockets of Wyomingites and more jobs. And it suggests Gov. Matt Mead’s plan to restore funding to the Health Department and the Department of Family Services is a feasible one.
However, the revenue report’s positive outlook also likely signals the end of any serious conversation in the Legislature about reworking Wyoming’s tax structure in order to help diversify its economy. That’s unfortunate, because you can’t have the latter without the former.
Currently, Wyoming earns about 70 percent of its revenue from energy development in the state. That money ultimately pays for our schools, our roads and our safety net. So when energy isn’t doing well, neither are Wyomingites.
Wyoming has always been at the mercy of the boom and bust cycle in energy development. We’re no strangers to the struggle of the busts and the success of the booms. Our economy is beginning to improve, but economists warn that this slight uptick is the top of our new normal, and that we’ll likely never return to pre-bust economic levels. That means doing nothing is not an option.
Historically, lawmakers shy away from conversations about taxes, except when they’re about cuts. When the economy is riding the wave of a boom in energy, there’s no need. But when the state is nursing the wounds of a painful bust, no one wants to suggest we stretch ourselves even more. And that’s why the time to have this hard conversation is right now, while the economy is on the mend and before it takes another hit.
Other energy producing states that haven’t adapted to new economic realities have been left behind. The global factors that contributed to this last bust are still there — stabilized, sure, but not gone. Lawmakers need to address the systemic problem in how our state generates revenue – namely our overwhelming dependence on the energy industry – while reforming our tax system to allow for more economic development. Because long-term, that’s the only way Wyoming’s economic health can be secured.
Coal, oil and natural gas will always be integral to Wyoming’s economy – they just don’t have to be the sole provider. Western states are embracing renewable energies and that’s increasingly what they’re looking to purchase from producers like Wyoming.
The time is now to bring Wyoming out of the boom and bust cycle. It’s not just families of coal miners out of work who hurt when Wyoming busts; it’s school-age children, the elderly, the sick, the mentally ill. It’s all of us. Lawmakers need to have the tough conversations at their legislative session in February. They need to resist the temptation to do nothing. That will inevitably doom us to another painful bust.