Wyoming received the first $500 million installment of its billion-dollar share of American Rescue Plan funds last week, setting the stage for a July special legislative session dedicated to appropriating the money.
Now, the state’s elected officials just have to figure out how to spend it.
Gov. Mark Gordon has announced his priorities for the funds — health and social services, education and workforce and economic diversity and development efforts. Despite that, lawmakers and Gordon’s cabinet still need to fully understand federal guidance around how those dollars can be used, and agree on how best to spend them.
“[The governor] talks to lawmakers a lot,” Renny Mackay, Gordon’s policy advisor, said. “As the guidance comes out, we’ll dive more into what’s possible and what is not.”
Those challenges will be manifest. Unlike most states, Wyoming’s tax revenues have in the first five months of 2021 failed to recover from the damage of last year’s COVID-19 pandemic, according to April projections from the state’s Consensus Revenue Estimating Group. The economies of major metros like Casper have also been slow to rebound to pre-pandemic levels, according to state numbers, driven largely by an energy sector decline that hasn’t bounced back.
“We are going to be laser-focused on addressing Wyoming’s short and long-term recovery, and on getting people back to work,” Gordon said in a statement last week. “I want to ensure we use these dollars to thrive in the long-term, because this federal spending is increasing debt on our children and the generations to come. We must not squander this opportunity to invest wisely in our state’s future.”
Other pieces of legislation working their way through Congress — in particular, a massive infrastructure spending package and the American Families Plan — could have other, unanticipated impacts for Wyoming’s economy. However, the state’s current financials underscore structural challenges in Wyoming’s economy that federal spending alone cannot fix, according to legislative leadership.
“There are certain sectors — energy, particularly — where there are just fewer jobs to go back to,” House Speaker Eric Barlow (R-Gillette) said.
COVID-relief funding will likely be targeted toward projects that stand to have long-lasting social and economic impacts, according to officials interviewed by WyoFile. However, short-term budgetary considerations will also demand attention. In the 2021 session, the Wyoming Legislature ratified hundreds of millions of dollars in spending cuts to everything from the state-level bureaucracies in Cheyenne to an adult group home in Gillette, leaving holes that may or may not be filled with ARP funds.
The relationship between the broad cuts that were made this winter — along with large dollar amounts from 2020’s CARES Act that are still circulating in some parts of the economy — are still not fully understood, Mackay said.
“Some programs are getting a lot more money than they’re normally used to, both from the federal government and the state combined,” Mackay said. “How those overlap with programs that were cut or reduced is something we’re watching closely.”
Legislative leaders and the governor’s office will work together to develop a limited suite of legislation for July’s special session, Barlow said. That process, he said, will take time, and involve the input of more than just legislative leadership and Gordon’s office. It will also involve tough discussions about the proper uses for one-time dollars from the federal government, and how to begin the conversation of filling needs once those dollars run out.
This round of funding, Barlow noted, has fewer spending restrictions than CARES Act dollars did, and also lacks the one-year spend-down window requirement. That affords lawmakers greater flexibility in deciding where the funding goes, he said.
“We do have some ongoing, fundamental challenges,” Barlow said. “But we’re not limited on time. We hurried last year because we had until the end of the year [to spend CARES Act money] but now, we can really pace ourselves to do the meaningful things that really make a difference.”