January 15, 2024 |
Photo – Stacked oil barrels – Bigfoot99 file photo
The Consumer Revenue Estimating group — the official name of the state bean counters who watch the flow of Wyoming’s dollars—on Friday revised their estimate. CREG is now projecting that sales and use taxes will be $10 million more in the current fiscal year than was forecast in October.
Looking ahead a few years, projections show a downward trend.
CREG revised its forecasts of Wyoming’s major mineral production and prices. The projection for oil production is up 5-million barrels from the October forecast. Coal production was lowered by 5 million tons. CREG also reduced CY 2023 production of trona by 600,000 tons.
Governor Mark Gordon saw the numbers as a sign to maintain a slow, steady approach to spending in the upcoming legislative session. “With the possibility of our minerals commanding lower prices, leading to reduced severance tax revenue,” the governor, said “Wyoming may need to lean harder on investment income. Placing surplus revenues into savings ensures Wyoming is well prepared for the challenges facing our legacy industries due to Biden Administration policies.”
The lower revenues from less mineral production mean severances taxes will be lower to state-funded services. Total severance taxes to all state funds decreased by $11.6 million for FY 2024 and decreased by $18.4 million for FY 2025.
Looking forward a few years, the trend is down, not up.
Also down is state income from severance taxes. The forecasts of both general fund and the budget reserve account are down,$4.8 million for in the general fund and $10.6 million in the BRA. Similar to severance taxes, mineral royalties will be down $10 million or more because of the downward trend in mineral production and prices.
The bottom line: CREG increased revenues to the General Fund by $7.6 million and decreased income to the Budget Reserve account by $8.5 million. The new forecast shows a $20 million drop in expected revenue between October and now. Federal energy policies play a role in the drop.
Sales and use taxes were up largely because of wind energy production in Albany County, CREG notes, but taxable sales are down in the retail trade and mining industry overall.
Still the CREG report is optimistic and increases in General Fund sales and use tax collections by $10.0 million to $651.7 million for FY 2024.
The Wyoming Joint Appropriations Committee will consider the budget’s requests on January 11 at 2:30 p.m.
