Income to pay for the state’s next budget, including education, will probably fall almost $1.5 billion short of projections used to create that budget, but could dip as far as $1.8 billion below earlier estimates, according to a state report released Tuesday.
The Consensus Revenue Estimating Group, in a special report, said between the economic slump created by the coronavirus pandemic and an oil price war between Russia and Saudi Arabia, Wyoming’s revenues will be reduced significantly and will not bounce back quickly.
“Under all scenarios, state revenues … are materially lower,” said the report. “A forecast … eventually illustrates a modest rebound; however, none of the funds/accounts recover to pre-COVID-19 levels … by the end of the forecast period.”
The CREG is made up of economists from different state agencies who look at the impact of statewide, national and global developments on sources of revenue for the state.
The CREG’s reports provide the basis for legislators as they work to set up the state’s budgets, which run in two-year cycles. The next budget for the state begins on July 1 and ends on June 30 of 2022. It was approved by the Legislature in March using a projection issued by the CREG in January.
The report said money for the state’s general fund — its main bank account — and budget reserve account would probably drop by almost $1.1 billion during the biennium from January projections. The report said the decline could range from $783.6 million to almost $1.4 billion, depending on conditions.
Meanwhile, income for the state’s School Foundation Program and School Capital Construction Account, will fall by from $291 million to $472 million below estimates, the report said. CREG said the decline will most likely be around $394 million.
The report said the CREG was forced to make broader estimates than it usually does because of the uncertainties its members faced in making projections.
“Traditional models and methods employed by CREG in prior reports are unlikely to carry the previous levels of accuracy due to the unprecedented nature of current events,” the report said. “Perhaps this forecast is best described as a reasoned assessment.”
The report predicted a drop of more than $536 million in mineral severance taxes from January estimates, a decline of more than 44%.Sales and use tax revenues, meanwhile, were expected to fall by more than $310 million from earlier projections during the biennium, a decline of more than 27%.
The report was delivered Tuesday to members of the Legislature’s Revenue Committee.
Committee member Sen. Ogden Driskill, R-Devils Tower, said in a Facebook posting the decline will force the Legislature to make difficult choices.
“Tough decisions ahead for the state,” he wrote.