Mining for a rebound

Wyoming’s sales and use tax collection is on the rebound in large part because of the mining and retail trade industries, according to a Wyoming Department of Administration and Information report.

During the first four months of fiscal year 2018, which started July 1, the state’s 4 percent sales and use tax collections increased by more than 15 percent, or $33.4 million, in comparison to the first quarter of fiscal year 2017, which started in July 2016, Wyoming Department of Administration and Information Economic Analysis Division Principal Economist Jim Robinson wrote in the November 2017 issue of the Wyoming Insight report.

“That’s a pretty good (employment) increase — 2,200 jobs in the mining sector (during October),” Robinson said. “Yet overall, the state is still down 1,400 jobs from last year at this time.”

While mining companies such as limestone provider Pete Lien & Sons Inc. also report a boost in production this year, Robinson said the majority of Wyoming’s increased mining activity is drilling for oil and gas.

“It’s not really coal, it’s really more oil and some natural gas,” he said. “That correlates with rig counts we’re seeing in the state.”

This summer, about 25 oil and gas rigs were set up around Wyoming compared to the seven rigs set up in the summer 2016, Robinson said.

The increase has a significant effect on the state’s economy.

“By the number of jobs, (mining is) not that big, only 7 percent (of the total jobs in Wyoming),” he said. “But by sales and use tax collections, it’s 15 percent (of the total sales and use tax collected in the state).

“That’s huge. And traditionally, mining jobs on average pay fairly well compared to jobs in other industries in the state.”

Sales and use tax is the primary funding source of city governments and a partial funding source for county governments, Mayor Andi Summerville said.

“We use sales and use tax to pay our firefighters and police, build our parks and fix streets,” Summerville said. “It’s our primary revenue source.”

Although Albany County is not rich in energy resources, a representative from a new limestone mine north of Laramie said mining operations have increased in this portion of the state as well.

“I believe we are benefitting,” Pete Lien & Sons Plant Manager Hayden Fuchs said. “Limestone is fairly consistent compared to some of the other types of mining in the state. But our production has increased this year, so we are benefitting from the increase in the mining industry.”

The company’s Albany County plant opened in July 2016 and currently employs about 34 people, he said.

“We’re exceeding expectations (at the Albany County plant),” Fuchs said.

“We’re planning on moving a transition operation up to Laramie soon, so I would say we are looking at continued growth in the future.”

The construction and manufacturing industries have also experienced job growth compared to 2016, Robinson said. With 300 more jobs in each sector this October than October 2016, he said the increase was likely a direct result of increased mining for oil and gas.

“For Wyoming, manufacturing is mostly limited to refineries — crude oil to diesel fuel and gasoline, and trona (ore) to soda ash,” Robinson said. “I think the manufacturing we see right now in the state is based on traditional sources we’ve seen over the years.”

Heading into the second half of fiscal year 2018, he said he was optimistic about the state’s economic trends.

“I see a couple of good trends for the state,” Robinson said. “The sales and use tax collections show me we’re starting to see consumer and business spending rebound around the state.

“Also, improving crude oil prices the last several months have helped drive job gains in mining and should also bolster industries indirectly related to mining activity including retail trade and leisure and hospitality.”

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