Facing a fiscal year 2016 shortfall of about $159 million, Wyoming Gov. Matt Mead has proposed slashing expenses and borrowing from the state's rainy day account to offset a sharp fall in energy industry revenues.
Coal-rich Wyoming, like Alaska and other states heavily dependent on the energy industry as economic drivers, is suffering the effects of very low commodity prices. Projected revenues for fiscal 2016 were revised in October to come in almost $187 million short of earlier projections.
"Over the past year, oil and gas prices have fallen and remain low," Mead wrote in a Dec. 1 letter to the Wyoming legislature in which he presented his 2017-2018 biennial budget. "Coal has struggled from federal regulations and market forces. Since a majority of state revenue is linked to these resources, we knew we would be put to the test this budget session."
Mead's proposed budget includes a cut of roughly $19 million from the previous budget. To balance it, the governor's plan cuts some funds for economic investment projects, state facilities, and employee compensation.
Mead proposes to borrow from the state's $1.8 billion rainy day fund and pass a law diverting some new tax revenue into it that would make it whole again by the next biennium.
"My budget incorporates strategic reductions while still providing the services that our citizens rely on and the projects needed for continued growth," Mead said in a statement. "These are difficult times for many in our state who have personally felt the effects of the depressed energy market. My budget helps local governments satisfy their obligations and invests in long-term economic growth for the state. We have challenges, but I feel confident in our ability to meet those challenges."
