Campbell County has been here before, as has Wyoming. As the heart of the Cowboy State’s coal-rich Powder River Basin, the county is a canary in the coal mine to predict the health of the local and state’s economies.
After the PRB posted a huge 21% drop in production in the first quarter over 2023, the county already is looking for where to trim spending in anticipation of reduced coal revenues expected to shrink more.
“There’s a lot of concern in the community because coal has been our bread and butter since the early 1970s, and to lose that, some services will go away,” said Del Shelstad, chairman of the Campbell County Board of Commissioners.
Coal pays for everything funded by Campbell County, like the Rockpile Museum in Gillette, which is filled with coal mining artifacts from the PRB, to the Campbell County Recreation Center with its climbing wall, water slides and pool. All are on the table for possible cuts.
All of the county’s departments are expected to see some phasing back in operations over the next few years, Shelstad told Cowboy State Daily.
Meanwhile, the state of Wyoming may take up its own cuts in response to lower coal revenues.
The state has indicated that it could see at least a $50 million shortfall in funding because of the 21% collapse, as well as Biden administration policies that effectively could end mining for coal on public lands and close coal-fired power plants by the early 2040s.
“The election (in November) could change things,” said Shelstad in reference to the Nov. 5 presidential election.
Coal Is Still King
In May, Don Richards, co-chairman of the Wyoming Legislative Service, said that the state budget could see a shortfall in revenue collection from severance taxes and federal mineral royalties from the state’s coal operators as it moves into 2025.
A clearer picture may emerge by late July when actual revenue collections are synced up with earlier forecasts, he said in an email to Cowboy State Daily on Monday.
Richards, who heads up the Consensus Revenue Estimating Group (CREG), said earlier that coal production data could be well off the mark from earlier estimates in January of 225 million tons. Based on federal data, Wyoming coal production is on pace for about 191 million tons, which translates into just $50 million per fiscal year for spending.
Meanwhile, Campbell County is offering up the first take on what budget cuts are looking like because of coal disruptions coming down the pike.
On The Chopping Block
In a special meeting Tuesday, Campbell County commissioners are expected to get a provisional budget on the depth of the cuts following requests made by the board of commissioners to trim at least 3%. The actual cuts are expected to come in at about 4.36%, one county executive told Cowboy State Daily.
With an assessed valuation at $5.7 billion in 2023, mostly because of the PRB coal mines, Campbell County is far and way the state’s leader. No. 2 on the assessed valuation list is its southern neighbor Converse County at $4.38 billion.
The commissioners want to get a handle on the budget before it gets to a crisis stage, Shelstad said.
The county’s current operating budget of $151 million budget is forecast to fall to roughly $125 million over the next three to five years because of an expected drop in the assessed valuation of the county’s real estate, including coal and oil and gas properties, according to Shelstad.
“The writing is on the wall now. They (the Biden administration’s Bureau of Land Management) won’t ever release any more leases. I wanted to throw something out there to get something going,” Shelstad said of the budget.
Campbell County Clerk Cindy Lovelace told Cowboy State Daily that she doesn’t anticipate layoffs, though each of the county’s two dozen departments were asked earlier this year to submit budgets based on 3% cuts.
These departments range from Public Works, the County Attorney’s office and the children’s center to the Gillette airport, adult treatment center and coroner’s office.
“We’re trying to do this without affecting personnel,” she said.
Not Without A Fight
Along with considering where to cut back, Campbell County also will hold a public hearing Tuesday to hear from the community on the coal industry’s latest financial miseries. After that, commissioners plan to send a letter to the BLM protesting Biden’s new coal rules that would ban future leasing of the commodity.
As of Monday morning, about 220 people have submitted comment letters to the commissioners that would add their names to a protest.
“This really hasn’t resonated with the people as of yet,” said Campbell County spokeswoman Leslie Perkins about a flurry of recent federal government announcements that will negatively impact the PRB region.
The attacks on PRB’s energy industries are coming on all fronts.
Last month, the BLM offered a proposed rule out of the agency’s Buffalo Field Office that essentially ends coal production in PRB under existing leases on public lands.
Separately, the U.S. Environmental Protection Agency recently released power plant regulations designed to regulate coal and natural gas-fired power plants out of existence over the next decade.
Another Bust In The Cycle
All of this uncertainty is making it difficult to balance budgets, which is nothing new for Campbell County.
The county budget has fluctuated greatly in recent years, and has been battered by the pandemic, when the budget stood at a low of $109 million for the year ended June 30, 2022, and reflected an ailing economy, to even lower in 2018 when the budget dipped just below $100 million.
That’s when revenue collection fell because of lower natural gas prices, warmer-than-normal temperatures that reduced electricity demand, and some coal-fired power plants were in the process of being retired.
It's boom and bust times for Campbell County.
The latest year’s budget reflects an assessed valuation in the county of $5.7 billion – it’s third highest ever – as the economy emerged from the Covid-19 global crisis and with coal production meeting demand.
However, that valuation is expected to begin declining, perhaps rapidly, in coming years, Campbell County officials say.
“The goal of the board (of commissioners) is to start looking at ways to reduce our budget in anticipation of possible revenue losses in the future,” Lovelace said. “It’s fiscally responsible.”
Pat Maio can be reached at pat@cowboystatedaily.com.
