There is no doubt that these are difficult times for states that are heavily reliant on the energy industry. My home state, Wyoming, is having to tighten its belt, significantly, because of falling energy revenue. The Wyoming fiscal year begins July 1 and reports today show that the state will have to reduce its budget drastically in light of the downturn in the energy sector.
According to the Casper Star Tribune, "[r]evenues from coal, gas and oil account for 70 percent of the state's spending money, and those revenues are now dwindling." Governor Mead reportedly pointed out that "coal production has fallen to 1995 levels."
Wyoming's budget cuts come as no surprise due to the significant decrease in commodity prices and the downturn in the coal industry; we previously discussed these issues in our post in February of 2016, "Wyoming's Budget Session: Contemplating Rainy Day Fund Spending and Notable Bills to Watch." What may come as a surprise is the actual amount of the budget cuts – $248 million.
The Wyoming Tribune Eagle refers to the cuts made "[i]n light of the downturn of Wyoming's mineral extraction industry" as "massive."
The $248 million budget cut is reported to result in 677 layoffs of private-sector employees whose work is dependent on state spending. This is after the loss of 5,500 jobs from the state's oil, gas and coal industry over the past year.
Governor Mead also reportedly "warned that more cuts could be required because it's possible the revenue shortfall ultimately could exceed $500 million."
The Joint Appropriations Committee will continue to meet today and tomorrow to go over the proposed budget cuts – no official cuts will be made today, according to the Wyoming Tribune Eagle.
Governor Mead's Budget Plan for 2017-2018 can be found here.
The good news is that Wyoming folks are resilient and have weathered downturns in the energy industry before. This isn't their first rodeo and they have survived tightening the belt in the past, but it still hurts.
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