Governor Matt Mead’s office announced an initiative Monday that is hoped will diversify the state’s economy and strengthen it.
The Governor’s initiative, called “Economically Needed Diversity Options for Wyoming (ENDOW) was created to help develop a comprehensive approach to diversifying the state’s largely carbon-fuel based economy, according to a release by the Governor’s office. The program has received support from the 145-member Wyoming Economic Development Association (WEDA), a group that wants to expand Wyoming’s economy, create jobs and improve the state’s tax base by diversifying the economy.
Dave Simonson, president of WEDA said in a news release issued Monday that the organization was hopeful the measure would help diversify and grow Wyoming’s economy.
“We greatly appreciate the long-range vision of Governor Mead and the legislative sponsors of the ENDOW bill,” Simonson said. “We look forward to being part of this collective effort to help grow Wyoming.”
The announcement of ENDOW came on the heels of the latest economic indicators that showed Wyoming’s economy continued to struggle amidst a stagnating coal market and oil prices that are only slowly increasing.
According to state data released by the U.S. Bureau of Economic Analysis (BEA), Wyoming’s Gross Domestic Product (GDP) declined by 5.3 percent in the first half of the 2016-2017 fiscal year, the second greatest drop in the U.S. after North Dakota’s loss of 5.6 percent. Overall, nine states saw decreases in GDP in that time frame, most of them states heavily involved in oil, coal and mining.
According to oil field services company Baker-Hughes, Wyoming added two oil rigs in the month of January, bringing state totals from 17 rigs to 19. This came amidst a rally in oil prices, partially precipitated by an agreement by the Organization of Petroleum Exporting Countries (OPEC) to curb production.
Between January 2016 and January 2017, commodity prices of oil increased from $29.01 per barrel to $53.27 per barrel. Oil closer to $60 per barrel generally would benefit Wyoming’s economy, but other states that can gear up production faster, like Texas or North Dakota, have begun absorbing some of the spoils that come with increasing prices.
Texas added 24 rigs in January, and North Dakota added three.
Coal prices have also worked against the state’s economy, a one-two economic punch when considered together with the oil market. The price for coal has risen slightly from $11 per short ton for 8,800 BTU Powder River Basin Coal in the last week of December, 2016, to $11.80 per short ton as of Jan. 27. However, the Wyoming Consensus Revenue Estimating Group, a government agency that predicts revenues from mineral extraction in the state, predicts a flat coal market until 2020.
The markets for carbon fuels have had an impact on the state’s economy across the board. The state’s unemployment rate at the end of December was 4.8 percent. While only 0.1 percent above the national average of 4.7 percent, the state had shed nearly 8,000 jobs between December 2015 and December 2016.
According to figures released by the U.S. Bureau of Labor Statistics (BLS), Wyoming was one of eight states in the U.S. that saw decreases in payrolls over that period, and it lost the second highest number of jobs in that period. Mississippi, at over 11,000 jobs lost, and Kansas, with about 9,300 jobs lost, were the only two states to lose more jobs than Wyoming.
The state’s sales and use tax collections are also off from last year. For the first half of the current fiscal year, sales and use tax collections decreased statewide by 16.1 percent. The largest drop of 35.1 percent was in Converse County. Carbon County’s collections decreased by 4.5 percent.
The only county in the state to realize growth of sales and use tax collection was tourism-heavy Teton County, where collections increased 4.9 percent.
Statewide, the only business sector that reported an increase in collections was professional and business services, which showed a slight improvement of 2.2 percent. Mining and logging collections decreased 39.5 percent.