CASPER, Wyo. – Governor Mark Gordon gave a direct and bleak assessment of Wyoming’s impending economic challenges during a speech on Thursday afternoon.
Gordon says Wyoming could see revenue losses of considerably more than $1 billion over the next biennium. Within a year, Wyoming’s rig count has gone from 30 to two, and soon will be one. Wells have been shut-in, coal production is in decline and Gordon said some mines will likely idle.
Wyoming’s economic future was dimming even before the COVID-19 global pandemic slowed down the world’s economy and further reduced the market for the state’s fossil fuels.
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The governor issued a freeze on new government contracts and hiring in April. This week, Gordon said he told all agency directors that the state should prepare for a 20 percent budget reduction.
“There is a multi-phased approach,” said Gordon, the first being the freeze. The second phase is scheduled for July 1, where reductions in spending will be addressed.
“There will be layoffs, there will be potentially furloughs,” he said. “This isn’t easy.”
Wyoming citizens receive roughly 10 times in services to what they pay in taxes, said Gordon. “That’s because of our mineral wealth,” he said. “That means we are going to see declines in our economic activity because we’re going to have to reduce our state spending.”
“We know that if we fired every single state employee that we would not change the course that we’re on,” he said. “We would be broke.” Wyoming’s “rainy day fund” would be depleted within a year without revenue and spending changes, he added.
“This is about planning our future.”
New revenue needs to be explored, and Gordon suggested eliminating all tax exemptions could be an option. That would be ultimately left up to the legislature, which has been loath to touch tax issues.
“We are in this together, we have been working together to address these issues,” he said.