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Wyoming Applies Federal Coronavirus Relief Funds To Internet, Processing Plants

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By Jim Angell, Cowboy State Daily

Two programs set up to help Wyoming businesses in the wake of the coronavirus pandemic are almost out of money, but the distribution of federal relief funds to help the state is continuing, Gov. Mark Gordon said Wednesday.

Gordon, during a briefing, said the state is working to use the federal coronavirus relief money for items such as broadband service improvement, medical facility upgrades and agriculture relief as the two business relief programs still in operation draw to a close.

“Our two business relief programs are still open, but funding is beginning to run low,” he said. “These funds are open for small businesses and we are trying to be as accommodating with small businesses as we possibly can. We want to be sure the people of Wyoming and businesses of Wyoming have every opportunity to relieve some of the burdens placed on them by COVID-19.”

Of the $1.25 billion sent to the state through congressional action, the state has distributed $829 million, Gordon said.

Much of the money has been distributed through three business relief programs approved by the Legislature during a special session earlier this year.

Of the two programs still in operation, one is designed to offset the impacts on Wyoming businesses with up to 50 employees of business restrictions imposed to help limit the spread of coronavirus and the other is designed to compensate companies for the direct costs of dealing with the coronavirus, such as the purchase of protective equipment.

The state is required to spend the full $1.25 billion by the end of the year and the Legislature gave Gordon the authority starting Sept. 15 to spend any of the funds not already spent.

Gordon said one program that will use money will launch next week, when meat processing plant owners will be able to apply for funds to expand their operations. Gordon said meat producers around the state have been able to have their meat processed because of shortages of processing facilities.

The state has also used some of the money to expand broadband Internet service to rural areas of Wyoming.

“I’m pleased to report that some of the most rural parts of Wyoming will now have connectivity when these projects are completed,” he said.

The state has already started work to get some of the federal money into the hands of local governments and medical facilities

Wyoming Economic Indicators Up from May, Still Down From 2019

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By Jim Angell, Cowboy State Daily

The indicators that point to Wyoming’s economic health improved slightly in June from May, but the state’s economic health remains worse than it was one year ago, according to a state report.

The state’s Economic Analysis Division, in its regular report on “Wyoming Economic Indicators” said unemployment rates, tax income in the mineral and hospitality sectors and total employment were all below where they stood in June of 2019.

“The Wyoming Economic Health Index reported an index value of 97.3 in June 2020,” the report said. “This value was higher than the May 2020 value of 95.5, but significantly lower than the June 2019 value of 108.”

However, the report also said declines in the state’s unemployment rate in recent months are a good sign for the economy.

“These improved unemployment rates over the last couple of months are a bright sign that the recovery from the Covid-19 business shutdowns has begun,” it said.

Each of the four indicators fell during the year, the report said, with sales and use tax revenue from mining dropping by more than 66% to total $3.8 million in June, compared to about $11.8 million in June of 2019.

In addition to economic difficulties created by the coronavirus pandemic, the state has been hit with a collapse in coal prices that has led to declines in its coal industry.

Lodging tax income also fell from 2019, dropping by 46.2% to total $1.7 million in June. Although the income was higher than it was in May, it also marked the fourth consecutive month that lodging tax revenues dipped below the previous year’s levels by 35% or more, the report said, due largely to the coronavirus.

“These large decreases in collections from lodging tax are not surprising because of the stay-at-home orders and lack of travel due to the Covid-19 pandemic,” it said.

The state’s unemployment rate of 7.6% in June was a drop from the rate of 8.8% seen in May, but it remained considerably higher than the rate of 3.6% seen in June 2019.

In addition, the number of people with jobs in June totaled 266,300, an increase of 2,500 from May, the report said, but a decline of 24,100 from June 2019.

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Budget Cuts Could Reduce Medicaid Providers, Wyoming Health Department Says

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By Jim Angell, Cowboy State Daily

Reductions in the amount of state money paid health care providers through Medicaid made as a way to tackle the state’s budget shortfall could result in providers leaving the program, according to the Wyoming Department of Health.

The department, in a report outlining the impacts of its $28 million reduction in benefits it pays for health care for some Wyoming residents, said the reductions will lead to limits on services in some cases.

“In some cases, some Medicaid providers may choose to leave the program entirely, which may create access issues in some more rural or frontier areas of the state,” the department said in a report on its recent budget cuts.

The Health Department was the hardest hit by budget cuts outlined by Gov. Mark Gordon recently to offset a $1.5 billion shortfall in revenues predicted to occur during the current two-year budget period.

Of almost $254.5 million in cuts in spending from the state’s “general fund,” its main bank account, the Department of Health saw the largest reduction, almost $89.1 million.

More than a quarter of that amount, almost $28.2 million, will come from cuts in reimbursements to health care providers from the state.

The cuts would be matched with a $28.2 million reduction in federal funds.

The Department of Health, in its report on the reduction, said the spending cuts would come from a 2.5% decrease in reimbursement rates for health care providers and through service reductions.

The cuts are likely to cause a decline in Medicaid involvement by health care providers, the department said.

“Various second-order effects are likely as well, including Wyoming Medicaid providers limiting services to Medicaid members or in some cases no longer accepting new Medicaid clients,” the report said.

Another spending reduction of almost $3.7 million will be seen in the state’s Children’s Health Insurance Program or “CHIP,” a program that provides low-cost health care for eligible children.

The program had been managed by a private company, but the state received no bids to continue the program during the most recent renewal period.

As a result, the program will now be run through the state, with claims processed through the Medicaid Management Information System, the Health Department said, with lower Medicaid reimbursement rates for health care providers.

The change will save the state $3.7 million without reducing benefits to covered individuals, the department said, although some patients may have to find new health care providers.

“A small number of clients may need to change providers if (the Health Department) cannot convince the providers to enroll due to lower rates,” the report said.

Federal funds to the state to help pay for the program will also be reduced by about $6.8 million, the report said.

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Gordon: State Does Not Have The Rainy Day Funds To Fix Revenue Crisis

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In a somber press conference on Wednesday, Gov. Mark Gordon sought to clear up the misperception that the state has enough money saved up to fix the state’s revenue crisis.

The governor said the notion that the state has large sums of money “stuffed away in coffee cans” isn’t true and the use of emergency funds won’t solve the problem.

“Sure we can spend the entire rainy day account down over the next two years but then what?,” Gordon said.

“Many people may be thinking we’ve got all this money in permanent funds and other accounts,” he said. “We’ve got to get [the budget picture] down to a very simple approach so people understand there just isn’t that much money.”

To that end, he said the state needs to plan five years out instead of the biennial process so “we know in five years we still have a state we can run.”

“We are approaching this cliff and we don’t have a way to affect a slowdown or a pause,” he said of Wyoming’s education funding mechanism.

Gordon said he hoped new legislators — many of whom ran on anti-tax pledges during the recent primary campaign — take time to learn about the budget and that government then clearly communicate to the public.

 “The people of Wyoming need to be assured that what they see in the budget documents is exactly what the state has,” he said.

Gordon said he hoped the public understands the severity of the problem before the state runs completely out of money.

“I know there are several people in the Legislature who feel this (running out of money) has to happen before anyone looks at this,” he said. “But the state has been through this a time or two before.”

He said he spoke to both former Gov. Mike Sullivan and Gov. Jim Geringer about the budget crisis acknowledging that each of them faced similar challenges.

An issue is trust, he said. 

“I do think people in Wyoming have got to be satisfied that we are out of money,” he said.

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Reason For Optimism In Wyoming’s Future, Gordon Says

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By Jim Angell, Cowboy State Daily

Despite the economic problems that have forced Wyoming to make deep budget cuts to its government agencies, there is reason for optimism in the state’s future, Gov. Mark Gordon said Wednesday.

Gordon, speaking during a news conference, said the state is actually in good condition in several areas, including its low coronavirus infection and unemployment rate, and has been helped by actions that have been taken to provide assistance to portions of the state’s economy.

“This is a challenging time, but I do believe there are reasons for optimism,” he said. “There are bright days ahead because of the sacrifices we are making. Those are having positive effects and those positive effects will have a ripple into our economy.”

Gordon pointed specifically to Wyoming’s low rate of positive results on coronavirus tests, which are averaging 2.45%, and to the state’s unemployment rate of 7.1%, well below the national average of 10.5%.

The state has directed more than $300 million in federal coronavirus relief funds to the state’s small businesses and has worked to issue contracts for the cleanup and reclamation of old coal mines and oil wells, he said, to help offset losses seen in the state’s coal, oil and natural gas industries.

“This year we are spending more on more (reclamation) projects,” he said. “It is anticipated that we will spend more than $200 million this year.”

Gordon also noted that Wyoming was one of the few states to allow its state and county fairs to proceed.

Such forward steps will be important as the state continues its work to climb out of the economic problems created by the coronavirus pandemic and energy industry slump, he said.

“Right now Wyoming feels pretty good,” he said. “We’re doing what Wyoming does. Let’s just be mindful about it. Let’s make sure we have a successful fall. That’s what’s going to be important for us to get out of this economic slump.”

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Gordon: Budget Cuts Will Be Devastating And Just Tip Of The Iceberg

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By Ellen Fike, Cowboy State Daily

The first round of Wyoming government budget cuts as proposed by Gov. Mark Gordon has been finalized, totaling more than $250 million, with an additional $80 million in cuts to maintenance of state buildings.

The 10% cuts to state agencies, boards and commissions will have significant effects on Wyomingites and their communities because they will affect important services that people depend on and will reduce general fund dollars that enter the private sector, Gordon said Wednesday as he announced the cut.

Gordon said the state’s largest five agencies would see the largest cuts, totaling almost $200 million.

“These cuts that we have made are devastating, but necessary given the state’s fiscal picture,” Gordon said in a news release. “A third of our revenue has dried up since the beginning of the year. I am constitutionally required to balance the budget. Our state cannot deficit spend the way the Federal Government can. Just to manage this crisis, difficult decisions had to be made.”

The governor began his Wednesday press conference with remarks about the budget, detailing some of the cuts that have been made. He noted it’s taken about two months to decide on what would be best to cut in the first phase.

He also asked the Wyoming school districts to make voluntary 10% budget cuts, although he noted it would make for difficult decisions.

The Wyoming Department of Health, with the state’s largest budget, will see a 9% cut totaling approximately $90 million.

WDH programs facing cuts and elimination include those that serve senior citizens, disabled individuals and those with very low incomes, Gordon said.

Among the cuts planned are the phased elimination of the Wyoming Home Services program, an Aging Division program which provides services to individuals who are at risk of premature institutionalization; the elimination of some immunization funding for children; and a reduction in funding for early childhood developmental and educational programs. 

UW and the state’s community colleges had their budgets cut by 10% as well.

These cuts will mean reduced higher education options for Wyoming students, Gordon said. One program eliminated was Wyoming Works, an initiative the governor supported to help prepare adult students to enter the workforce. 

The Department of Family Services is eliminating vacant positions in the state office and field offices across the state, including at the Boys School in Worland and the Girls School in Sheridan.

Additionally, this means fewer people will be able to work on foster care and child protection Gordon said.

DFS cuts also mean the defunding of the Community Juvenile Services Boards, county-based diversion programs to prevent juvenile incarceration, and the burial program, which pays up to $500 to funeral homes for burial expenses for the indigent. 

The Department of Corrections will also see significant cuts to programs that keep the public safe. Parole agents will now be required to supervise additional offenders, and programs that help inmates re-enter Wyoming communities and not reoffend will see reductions in funding. 

The Department of Health, Corrections, Family Services, the University of Wyoming and the community colleges make up two-thirds of the state’s general fund budget. 

The governor is considering options for addressing the remaining $500 million shortfall.

State agencies have already developed proposals on further cuts to services, and the governor is working with legislators on other options, all of which require legislative action. 

On top of these cuts, Gordon has put furloughs in place for higher paid state employees and is consolidating human resources across the state government. 

“None of the cuts are easy, nor are they designed to highlight critical programs for political effect,” Gordon said. “These are the types of cuts we will continue to have to make to get our budget in balance. These hurt, and what comes next hurts more. I recognize the impact these cuts will have on Wyoming families and I am truly saddened that we had to make them.”

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Occidental Petroleum Skips Wyoming, Sells Land To Orion Mine

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By Ellen Fike, Cowboy State Daily

Occidental Petroleum ended weeks of anticipation Wednesday when the company announced that it would sell land grant assets in Wyoming, Colorado and Utah to Orion Mine Finance.

The transaction will amount to approximately $1.33 billion and is expected to close in the fourth quarter this year.

The purchase includes 4.5 million mineral acres and 1 million surface acres. In this transaction, Orion is acquiring mineral rights to the world’s largest known trona deposit.

Trona is a mineral used to make soda ash, the principal ingredient in baking soda, global glass manufacturing, pollution control systems, as well as other critical chemical applications.

Gov. Mark Gordon’s office announced last week that its bid for the Occidental land was on hold, as the company was in negotiations with another bidder whose name wasn’t announced at the time.

The governor and other members of the State Loan and Investment Board planned to use Wyoming’s Permanent Mineral Trust Funds for the purchase.

Gordon announced in a release Wednesday that he was disappointed about the outcome of the sale.

“I am disappointed that Wyoming was not the ultimate buyer of the Union Pacific Land Grant lands and minerals,” he said in a statement. “We worked hard to prepare a responsible, good faith bid, which we believe would have augmented Wyoming’s investment returns, bringing in more revenue to keep taxes in Wyoming low.

“Had Wyoming’s bid been accepted, the rate of return was expected to be in the range of 8% to 12%, depending on the assets and how quickly the economy recovers. This predicted rate of return is currently better than our current average rate of return.”

The purchase was expected to provide benefits to Wyoming citizens by making it easier to manage public lands in southwestern Wyoming and providing more and better public access for recreation and hunting on the land. It was also seen as a way to give Wyoming more flexibility to manage the land for multiple uses, including grazing and the development traditional and non-traditional energy resources.

“We felt the purchase would have been a good investment at the bid we submitted,” state Treasurer Curt Meier said in the release. “However, we believe our existing investment opportunities will also serve the needs of the state and its constituents. Exceeding our target bid was a risk we were not willing to take.”

According to the Wednesday release, Occidental will retain all cash flow from the currently producing oil and gas properties on the land, which are primarily cost-free royalties.

“This transaction significantly advances the progress against our $2 billion plus divestiture target for 2020,” Occidental President and CEO Vicki Hollub in a company news release. “We will retain our core oil and gas assets in the Rockies, including the prolific DJ Basin in Colorado and the highly prospective Powder River Basin in Wyoming.”

The acquired properties will be held under Sweetwater Royalties, a new base metals and industrial minerals royalty company, which will be managed by Orion.

“Acquiring high-quality producing royalties is a core component of our investment strategy and we are thrilled to be partnering with Occidental in this transaction,” Oskar Lewnowski, chief investment officer of Orion, said in the release. “This transaction offers significant royalty cash flow from the trona mines and has strong potential for mineral development.” He added, “As a firm we recognize the importance of US mineral and energy production and are pleased to be able to offer our support to the existing world-class operators and their associated communities.”

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Gordon Launches Wyoming CARES Funds Transparency Website

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By Ellen Fike, Cowboy State Daily

Gov. Mark Gordon has created a page on the “Wyoming Sense” state spending transparency website outlining how the state is using federal dollars awarded through federal coronavirus relief.

As of Thursday, Gordon has allocated more than $710 million of the $1.25 billion in federal funds Wyoming was provided by Congress to address the impacts of the coronavirus pandemic.

During a special legislative session in May, the Wyoming Legislature provided guidelines as to how that money should be spent, splitting the funds into three disbursements.

The first amounted to $450 million and was made available for allocation on May 25.

The second amounted to $400 million and was made available for allocation on July 15.

The third will amount to another $400 million and won’t become eligible for allocation until Sept. 15.

The CARES Act spending page breaks down spending into nine categories:

  • Economic/business relief ($327.3 million);
  • Education resilience ($110.5 million);
  • Broadband and communications infrastructure ($100 million);
  • Testing and contact tracing ($60 million);
  • Unemployment and Workers Compensation ($42.2 million);
  • Local governments ($35.9 million);
  • Eviction prevention and support ($15 million);
  • State agencies’ COVID response ($12.2 million);
  • Judicial and legislative branches ($7 million).

The page, https://www.wyomingsense.gov/cares-act, includes additional details on each category, along with helpful links and additional resources. It will be updated regularly as additional funds are allocated. 

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Wyoming Banks Examine Ways To Ease Coin Shortage

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By Wendy Corr, Cowboy State Daily

There seem to be a lot of shortages right now – shortage of work, shortage of workers, shortage of new cars in car lots, and even a shortage of coins.

Derek Moore with First Bank of Wyoming says the holdup is at the federal level.

“There’s limitations on what banks can actually order in terms of coin,” Moore said, adding that in his years in banking, he’s never come across this situation before. 

Garrett Growney with Pinnacle Bank explained that the problem has been brought on by the slowdown in the economy.

With the shortage of general commerce out there, a lot of coin has not made it back into the Federal Reserve system,” he says.

But Pinnacle Bank got creative. In order to assure an adequate supply for local businesses, it launched a contest to get people to bring in change that they may have been gathering at home – and the chance to win a $50 Visa gift card as the prize.

“There’s a demand for coin,” Growney said. “You’ll see some businesses around town not taking coin transactions. So we saw that coming and have run a promotion so that we could have coin, so that our customers can access it.”

According to the Federal Reserve’s website, the entity is working with the U.S. Mint and others in the industry on solutions, but the agency said that since mid-June, the Mint has been operating at full production capacity and is on track to mint 1.65 billion coins per month for the remainder of the year.

Growney says he doesn’t believe the change shortage is an indication that the government is moving to a “cashless society” as alleged by some conspiracy theorists.

“I know there are some conspiracy theories out there,” he said. “But my thought would be that this would be a very cumbersome way to go about it.”

And he pointed out that there’s still plenty of change circulating.“It’s still getting used,” he said, speaking of coins. “I’m not aware of any effort to do away with it.”

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Wyoming’s Budget Picture Improves Slightly, But Still Horrible

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By Jim Angell, Cowboy State Daily

Wyoming ended its last fiscal year in a little better condition than predicted earlier, according to a report issued Wednesday by the state’s leading financial officers.

But Gov. Mark Gordon urged Wyoming residents not to forget that the state still faces major shortfalls moving forward.

“Even if this report suggests moderate improvements … our state’s fiscal situation remains dire,” he said. “We must still exercise budget discipline to balance our budget.”

The report issued by Consensus Revenue Estimating Group was an update to one issued in May, when the panel of fiscal officers for various state agencies predicted a shortfall for the 2021-22 biennium of up to $1.5 billion.

The report also predicted the state would end the 2020 fiscal year on June 30 with $70 million less in its general fund, its main bank account, than originally believed because of declines in mineral tax income and sales and use tax income expected to accompany the coronavirus pandemic.

However, Wednesday’s update said income for the state ran slightly ahead of the May projections.

“The current pace of actual revenues … suggest that the May 2020 revenue forecasts are almost certain to be exceeded,” the report said.

For the state’s general fund, its main bank account, deposits were expected to total about $1.06 billion for the year ending June 30, about $50 million ahead of May’s projections.

The biggest part of that income is from sales and use taxes, which were expected to total $440.6 million in 2020, compared to forecasts of $418 million in May.

“Even during the darkest economic period of pandemic to date – the second quarter of 2020 – certain retail trade businesses such as building materials and garden supplies, grocery stores, sporting goods stores, warehouse club and super centers still demonstrated year-over-year growth in sales, offsetting some of the substantial declines in leisure and hospitality services,” the report said.

The state’s income from mineral taxes also exceeded estimates by about $33 million, the report said.

“Severance tax collections are above the May 2020 … projections, mainly attributed to the less drastic declines in both oil and natural gas production and quicker rebound of oil prices compared to levels projected by CREG,” it said.

However, Gordon, in a news release, said residents must remember that income for the state’s main bank accounts in 2020 still were 17.6% below the previous year’s totals.

“We are still well below what we budgeted for in January,” he said. “We will continue to face significant challenges going forward and will need to continue to make tough decisions about how we meet this budget shortfall.”

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