CHEYENNE — As state officials grapple with an unprecedented budget crisis, Wyoming’s revenues are slightly ahead of abysmal projections released in May, but Gov. Mark Gordon and lawmakers maintained Wednesday that the state’s budget crisis is not going anywhere.
Wyoming faces a projected general fund deficit of roughly $760 million for the 2021-22 biennium, as of Wednesday’s revenue update from the Consensus Revenue Estimating Group. The pacing update from CREG, which consists of several economic and industry experts, comes after the group’s May report projected an $877 million general fund deficit over the 2021-22 biennium and a bottom-line revenue deficit of nearly $1.5 billion.
While those projections remain the official forecast, the update Wednesday showed the state outpacing them by roughly $117 million. The uptick was partially due to the state slightly outperforming the projections for sales and severances tax revenues.
Nevertheless, Gordon said in a statement Wednesday that the state’s financial situation “remains dire.”
“It is nice to see the small lift in oil that underpins these new projections,” he said, “but we are still well below what we budgeted for in January.”
Gordon also mentioned the report during a news conference Tuesday and, as he has previously, drew a comparison to help people wrap their minds around the issue: “If we absolutely eliminated all higher education — all community colleges and the University of Wyoming — that still would not address the problem. So while it’s improved ... we face significant challenges going forward.”
Earlier in July, Gordon announced budget cuts totaling $250 million, with almost every agency making a 10% budget reduction. Additional details of those cuts, including the number of layoffs and eliminated programs, will likely be announced in August.
The governor also asked Wyoming’s agencies to prepare an additional 10% budget cut that could be considered later this year, depending on where the state’s finances stand. Gordon emphasized that the updated projections have not changed the budget-cutting process as it moves forward.
“Virtually every part of Wyoming is still going to have to look at what they’re going to do to meet this budget shortfall that we have,” Gordon said Tuesday.
While the situation remains bleak, revenues collections slightly outpaced May projections for a few reasons. State Budget Department Director Kevin Hibbard noted that federal stimulus money and unemployment relief likely helped Wyoming’s sales and use tax revenues.
The state’s collection of online sales tax, which began only over the last couple of years, also provided a boost, he said.
But Hibbard, who serves as CREG’s co-chair, said “we still aren’t out of the woods,” noting that a COVID-19 resurgence or other dynamics could cause revenues to slip even further.
Lawmakers also cautioned against taking much solace in the revenue uptick. Sen. Cale Case, R-Lander, noted that it only made up a small sliver, around 6%, of the overall deficit.
With state agencies preparing for more cuts, it remains to be seen whether lawmakers will pursue any revenue options during their session in January.
The Joint Revenue Committee, which has often carried those sorts of bills into session, is scheduled to meet Aug. 24 and 25 to discuss some of the possibilities.
Case, who co-chairs that committee, said the budget crisis makes it crucial to consider how certain revenues can be collected more quickly than others. A sales tax increase or an exemption removal, for example, can take effect within a few months of passage, while others, such as a corporate income tax, require years to implement.
Members of the Joint Revenue Committee were reluctant to look at any of those options during their May meeting, though Case thought the next meeting could bring more discussion.
“I’m hoping that people have done some thinking,” Case said. “The [primary] election will be over, and maybe they won’t be quite as afraid to do what’s right for Wyoming.”