Income for the state’s two main bank accounts continues to run ahead of projections made earlier this year, according to the latest report on Wyoming’s revenues.
Due largely to unexpected gains in sales tax income and mineral revenues, the income for the state’s General Fund and Budget Reserve Account through the end of June is running more than $450 million ahead of projections made in January, according to the latest update from the Consensus Revenue Estimating Group.
“The January 2021 CREG revenue forecast, in retrospect, was generally somewhat conservative (thought not intentionally), particularly in the near-term because of limited information availability on additional fiscal stimulus, tremendous uncertainty of the (coronavirus) duration and the pace of deployment and efficacy of the vaccine,” the update said.
CREG is a group of state fiscal experts from various state agencies that makes regular projections on how much income the state can expect to support its two-year budget. It issues official reports twice a year — in January and October — and then updates those figures quarterly.
In May of last year, the group’s announcement that the state could face shortfalls of up to $1.8 billion prompted budget cuts by Gov. Mark Gordon and legislators.
However, subsequent reports have shown that the state’s income has exceeded those expectations.
According to the latest report, during fiscal 2021, which ran from July 1, 2020, to June 30, 2021, the state collected almost $439.2 million in sales and use taxes, almost $34.6 million more than was predicted in January.
The report attributed the gain to increases in retail spending boosted by federal COVID stimulus payments and sales taxes generated by wind farm construction in the state.
Additionally, severance tax income from mineral production has exceeded projections by almost $18.8 million, the report said, due to oil and natural gas prices that have been higher than earlier projections.
“Both Wyoming oil production and prices are on pace to exceed forecast levels,” the report said. “In particular, oil prices have rebounded at a much faster pace since late 2020 than CREG expected, thanks to the winding-down of the pandemic and the government’s stimulus payments which, in particular, boosted consumers’ demand on travel and recreation.”
However, the report was not optimistic that the trend for mineral income would continue.
“Caution is still warranted regarding the recovery momentum on multiple fronts,” it said.
The state received another almost $294 million through capital gains, the report said. It noted the CREG does not usually include estimates for income from capital gains in its two main reports of the year, so the income appears as an unanticipated increase in revenues.
As for the budget reserve account, the account used to pay for government agencies if the general fund runs short, income in fiscal 2021 exceeded projections by almost $86.8 million for a total income of almost $178.9 million, the report said.
Funding for the state’s schools is running $40 million ahead of projections when capital gains are taken into account, the report said, totaling $375.6 million during the fiscal year.