On Oct. 30, Wyoming received the best news of all.
It all happened when Consensus Revenue Estimating Group (CREG) Co-Chair Don Richards gave a report to the Joint Appropriations Committee.
There must have been smiles all around as Richards explained there was $1.86 billion in investment earnings from the investment savings account this fiscal year.
Nearly all of the conditions resulting in Wyoming’s investments to set a record year in positive gains happened this last fiscal year.
These investment earnings came from interest, realized capital gains and dividends, the same funds we as individuals receive from our investments in the stock market.
Wyoming has a huge savings account, and currently the market value is around $32.5 billion.
These investments didn’t just happen by chance, so a big thanks to those who made it possible throughout the years.
I believe it all started during Gov. Stan Hathaway’s term from 1967-75. His administration developed the first mineral severance tax in 1969 and an amendment to the Wyoming State Constitution in 1974, creating a Permanent Mineral Trust Fund which imposed a 1.5 percent tax on extraction of minerals in the state.
These dollars are deposited in the Wyoming Trust Fund. The principal of the trust fund can never be spent, but the income from it goes into the state’s general fund.
Funds from this past fiscal year came from mineral production, high interest rates and a rising stock market – the pieces fell into place, and everything will have to fall into place in future years to match this year’s results.
For many years, Wyoming’s investments were really conservative as we knew we were in for the long haul. However, when Gov. Mark Gordon was state treasurer, along with current State Treasurer Curt Meier and the rest of legislature, they changed what Wyoming could invest in and it has paid off.
Investment income was the top revenue source for Wyoming over the last fiscal year.
Richards told the Joint Appropriations Committee, “I can’t overemphasize the amount of money generated from savings of the state for this. I’m not advocating or endorsing any of those policies, but I would acknowledge the prior action of the legislature in terms of their investment policy, the savings in those funds, the increase to money management, the authorization to invest in alternatives and increasing the reserve amounts is all contributing to these outside gains.”
Wyoming’s investments are really diverse. It has a few one could call somewhat aggressive or volatile and a large number which are safe investments. This year, the aggressive investments won big.
With the current economy, inflation, minerals and interest rates down and sales and use taxes declining, next year’s funds look to be lower.
The stock market always goes up and down. The last few years we’ve been on a good ride, but when it goes down, it almost always comes back stronger.
Investing is a lot like owning cattle or sheep. It is a fragile market, and one small incident can hurt, like adverse comments from the White House.
Someone once said, “It is easy to make a buck. It’s a lot tougher to make a difference.”
Dennis Sun is the publisher of the Wyoming Livestock Roundup, a weekly agriculture newspaper available online and in print.
