Wyoming enjoys budget windfall from energy prices

CHEYENNE, Wyo. -- At a time when other states are pinching every penny they can find, Wyoming lawmakers just boosted state spending by 5 percent a year. And they did it with no program cuts and only one tax hike, a 48-cent boost on a pack of cigarettes.

Wyoming is enjoying the effects of recent high prices for the resources that provide the bulk of its revenue -- mainly coal, oil and natural gas.

"Sure we've been lucky," state Sen. Rich Cathcart said. The spikes in natural gas prices last year "were incredibly beneficial to the state."

Lawmakers opened their just-completed session with a $169 million surplus and went on a spending binge, creating new programs for senior citizens, insect management, animal euthanasia and public television.

They also increased spending to promote air service, nursing education and natural gas pipeline expansion and to defray prescription drug costs.

By the time they passed this year's supplemental budget on March 1, they had left $78 million in reserve.

The most heated debates weren't on the budget but on such topics as increasing the penalty for animal cruelty and restricting teenage carloads. Legislators even dumped a law enacted three years ago that sought to cap the number of government programs.

Without an income tax, Wyoming relies heavily on mining and drilling taxes and earnings from investments to support its $2.5 billion annual budget.

"We're the richest state in the nation in natural resources and I don't have a bit of a problem with our natural resources supporting this state," Cathcart said.

Wyoming even takes in about $100 million a year in interest from its Permanent Mineral Trust Fund, created in 1974 by diverting a portion of its annual mining and drilling tax income.

"We're putting money in the bank and living off the interest and that's something to be proud of," said former House Speaker Rick Tempest.

But not everyone agrees with milking the minerals cash cow. Legislation has been introduced in recent years to study possible income or business taxes.

"We've put too many of our eggs in one basket," said Marion Loomis, director of the Wyoming Mining Association. "Imagine what would happen if either coal or natural gas went into the tank right now. Wyoming would be really, really crippled."

Cathcart worries that too much one-time money from the short-term bump in minerals prices was spent for continuing programs.

"Eventually one of these programs we created is going to be the straw that breaks the camel's back," he said.