Breaking Wyoming's dependence on mineral money first step in diversification

That was the overarching message of a forum hosted by Laramie County Community College and the University of Wyoming’s American Heritage Center on Thursday night. The assembled panel of current and former lawmakers, representatives of county governments and academics spoke at length on the roadblocks to the fiscal change many see as necessary to make Wyoming’s government and economy viable in the long run.

The attempt to tackle this issue isn’t a new fad. Former Rep. Pete Simpson, who moderated the event, talked about the various attempts in the past to take on the tax structure and diversifying the economy.

Whether it was Tax Reform 2000 in the late 1990s or the Wyoming Futures Project in the early '80s, all of those efforts produced recommendations that were quickly ignored when the price of minerals went back up.

Panel member Rep. Sue Wilson, R-Cheyenne, said one of the biggest issues facing change in Wyoming is exactly what Simpson described – an unwillingness to make tough choices about spreading the tax burden around when the mineral sector is producing good revenues.

“Sometimes you start to feel like you’re making some progress in efficiencies, in discussions about how we can do different funding. And just then, the price of oil goes back up and we don’t have to worry about it anymore,” Wilson said. “Why does (reform get) hijacked? Because the commodity prices go back up and we don’t have to make hard decisions anymore.”

Just this past session, the state Legislature rejected bills that would have imposed a lodging tax, corporate retail tax and an increase in the tobacco tax. Former Rep. Michael Madden, who spoke at the event, said the passage of those and other bills would have solved 60% to 70% of structural deficits the state faces currently.

Madden said Wyoming is in a way an energy republic, a spin on the term "banana republic," which referred to Central American countries where all of their financial fortunes rested on a single crop. Without diversification, the state would continue to see issues like available funding for Wyoming’s education system fluctuating wildly depending on the market.

“It’s not too far from the truth to say you’re living in an energy republic when the quality of your kid’s education depends on what the price of oil is, and natural gas, and how many tons of coal we can sell,” Madden said.

Author Sam Western, who focuses on Western economic issues, said Wyoming’s dependence on mineral money to fund government operations might only be broken by the serve cuts that come with huge budget shortfalls.

He described what happened in parts of Oregon in the past few years, where massive cuts had to be made because of a lack of revenue. Libraries were closed and police services were cut to the point where sexual assaults couldn't be investigated on the weekends.

“We have a really tough time disconnecting ourselves from the extractive industry. And I don't blame us,” Western said. “We’ve been on the mineral dole for so long – three or four generations – it's going to be a very difficult narrative to break.”

Rep. Sara Burlingame, R-Cheyenne, said Wyoming needs to look across the country and see that states can fund operations without depending on mineral royalties. There’s a myth that if the state could just find the right level of spending for its existing revenue, all the problems it faces would be solved without the need for reform.

“I think there’s this critical lack of imagination,” Burlingame said. “We can’t even imagine ourselves decoupled from the extraction industry.

“We can’t even imagine what it would be like to move away from that.”

Wilson said before Wyoming could tackle these real problems, the state needed to reach a consensus on what it actually believes is important to solve. Half of the state thinks revenues need to be raised and diversified, while the other half believes the answer is to make significant cuts to government spending.

“We don’t agree on what better is,” Wilson said. “Everyone can agree we should educate our children. But about half the population thinks better education comes from more money. And the other half of my constituents in my district ... thinks we spend too much money on the education system already.

“The discussion about what public services we want and how many tax dollars we want to pay for them, we haven’t decided that.”

Without first coming to a consensus, Wilson said there would continue to be a lack of action from state leaders.