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As Wyoming rakes in extra revenues, Gordon recommends $412M infusion into Permanent Mineral Trust Fund

Gov. Mark Gordon gives his state of the state address during the 2022 Wyoming State Legislature's joint session. (Dan Cepeda, Oil City)

CASPER, Wyo. — The State of Wyoming has more money in its coffers than was anticipated when the biennium budget for fiscal year 2023–24 was set this spring.

Driven by higher oil and natural gas prices, the state’s Consensus Revenue Estimating Group’s October report projected $874.5 million more in revenues for the General Fund, Budget Reserve Account and investment income during the biennium than CREG had forecast in its January 2022 report. The January report was a major reference point for the Wyoming Legislature’s discussions when setting the biennial budget.

With updated revenue information available, Wyoming Governor Mark Gordon’s office released a supplemental budget recommendation on Friday. The supplemental budget includes adjustment’s to the the FY 2023–24 biennium budget in a range of areas for the Wyoming Legislature to consider when it convenes for its 2023 General Session.

“Our economy has performed better than anyone has anticipated,” Gordon said during a press conference on Friday, adding that the situation has provided the state a “serendipitous” amount of funding it can use.

While the governor is recommending spending in a variety of areas not provided for in the initial biennium budget, he is also recommending that a large chunk of the extra revenues the state has seen be put into savings.

“After all of the complex distributions to the many funds and coffee cans of our government, $913 million was left in the general fund and budget reserve account that could be used to meet the challenges and opportunities now facing Wyoming,” Gordon’s supplemental budget message stated. “This budget would put almost half of that surplus into savings generating ongoing revenues that will benefit us in the coming years and future generations, holding down the need for further government taxes in out years.”

Gordon is recommending $412 million be added to the state’s Permanent Mineral Trust Fund. Investment earnings from that fund generated about a third of the money for General Fund expenses in 2021–22, the governor added. The supplemental budget recommends infusions into other savings accounts such as the Common School Permanent Land Fund, which generates revenue to pay for K–12 education.

While higher energy prices may have boosted revenues for Wyoming, Gordon said Friday that inflation in the economy has been a double-edged sword for the state as the cost of government has risen. The governor added that he is aware higher costs for goods and services have been hard on Wyoming residents.

While inflation is presenting challenges, Gordon said a positive indication for Wyoming’s economy is that its diversification index is at its highest level in 40 years.

“We are diversifying our economy. That is really important,” he said, adding that a more diverse economy provides greater certainty about future revenues.

The supplemental budget Gordon is recommending aims to address inflation in a number of ways. One example is a recommendation to add $1 million to the property tax relief program, which over 3,000 households were able to utilize in the program’s first year.

Gordon is also recommending about $70 million to fund an external cost adjustment for K–12 education. An external cost adjustment is a mechanism to help schools deal with inflationary pressures, and the money Gordon is recommending is in line with the legislature’s Joint Education Committee recommendation.

The governor is also recommending additional money for payments to long-term care facilities under a proposal developed by the Wyoming Department of Health. His supplemental budget recommendation also supports increasing the reimbursement rate for dental care to Medicaid recipients.

“Dentists in Wyoming cannot afford the disproportionate cost of this service without more support from the State,” Gordon’s supplemental budget message said. “The benefits to children, those with disabilities, and the small business owners who provide dental care across Wyoming would go a long way toward reducing future uncompensated care.”

Gordon is also recommending money be allocated toward meeting the inflationary costs of construction.

“Supply chain and inflationary issues show no signs of letting up,” Gordon’s supplemental budget message said. “Thus, I include $50 million towards projects the Legislature has already approved. These are cost increases and not cost overruns. Still, the true cost is likely to be closer to $172 million for those projects. This supplemental budget allocates funding to get these projects under contract and forestall further rising costs.”

Gordon is also recommending $13.7 million be made available to deal with inflationary costs related to delivering state services.

“These include travel, food at state facilities, as well as healthcare,” Gordon wrote. “Although these are tough expenses to swallow, if inflation does not ameliorate substantially in the coming months, we may be in for other challenges ahead in the next budget.”

The biennium budget included money to increase state employee compensation to try and bring their wages closer to market.

“Then inflation struck, raising the costs of living,” Gordon’s budget message said. “What an irony. Accordingly, private-sector employers are increasing salaries, as are neighboring states. We continue to struggle to hire and retain employees. State agencies have expanded the other programs they use to attract employees with more flexible hours and teleworking, and still, our wages have not kept up.

“We see this in the fact that many agencies are dealing with worrying amounts of vacancies. For example, in public safety, we are down 140 correctional officers and 44 Highway Patrol Troopers. I think we all know about the vacancies for snow plow drivers and maintenance crews, but the same is true for healthcare workers, social workers, and other demanding and essential workers where the vacancy rate is approaching 50 percent. Overtime is eating our lunch, and the taxpayers of Wyoming know it.”

The employee compensation package approved at the start of the biennium budget aimed to bring state employee compensation up to 2020 market rates, Gordon wrote. His supplemental budget proposal recommends additional money to deal with inflation seen in the last two years.

“With this investment, we can start to make much smaller adjustments year to year,” Gordon wrote in his budget message.

Gordon is also recommending a one-time injection into Wyoming’s retirement system to provide an increase in benefits to retirees.

“My proposal aims to benefit those who have been retired the longest, seen the least adjustment for inflation, and are, therefore, most impacted,” Gordon wrote. “I am suggesting we bolster our main retirement account with a one-percent increase to the contribution. Because the fund is on a positive trajectory, this one-time boost will help our retired employees deal with inflation while simultaneously providing the opportunity for improved earnings on the fund.”

Gordon is also recommending adding $26 million for direct distribution to local governments. His supplemental budget recommends placing $10 million back into the Mineral Royalty Grant program that was defunded when the biennium budget was passed.

Some of the other areas Gordon is recommending money for in his supplemental budget request include:

  • Energy matching fund
  • Wyoming’s Tomorrow program
  • Mental and behavioral health service gaps
  • Cyberinfrastructure
  • Enhancing security at state prisons
  • Invasive species and predator control

The supplemental budget request, which is also available on the Wyoming Sense website, can be reviewed in full below: