Khale Lenhart BW.jpg

Khale Lenhart

Wyoming columnist

This week saw some sobering news regarding our state government’s finances. The Consensus Revenue Estimating Group (CREG) – the entity responsible for estimating our state’s future tax revenue – released its report.

The report showed an estimated $400 million shortfall for our state budget for the next two years, including approximately $250 million in education funding. To fill those gaps, our state is currently relying on what is commonly called the “rainy-day fund.” This is a pot of money that our Legislature wisely saved during more flush times for use in leaner times (such as now).

According to some estimates, at our current rates of use, the rainy-day fund could last three or four more budget cycles – six to eight years – before running out. This gives us a window to address our state budget before circumstances reach catastrophic levels, but we must act quickly.

While Wyoming is used to a boom/bust cycle, where funding levels fluctuate depending on the prices of natural resources (especially coal), this shortfall appears different. Rather than a simple price decrease, the loss of coal revenues seem to be based on something larger. The market for coal is declining, and we may now be seeing the signs of a new normal, where revenue from coal extraction is no longer able to meet our state revenue needs.

Put simply, this shortfall is different because it is happening when we otherwise may have expected a surplus. It is not likely that a new boom will come and fix this problem. It is more likely that things will get worse, rather than better.

Fortunately, some in state government appear to recognize this risk. Gov. Mark Gordon’s response to the CREG report indicated that Wyoming government is likely headed for leaner times, stated his belief that the changes we are seeing may be more fundamental than our typical boom/bust cycle, and reiterated Wyoming’s commitment to fiscal responsibility and government efficiency.

All of these responses are correct, and, hopefully, the governor’s next budget will be consistent with his response.

Wyoming is constitutionally required to have a balanced budget, so we do not have the option of deficit spending. At risk of sounding like a broken record, there are only two responses to this situation: spend less or tax more (or some combination of the two).

Our current situation requires our legislators to start making changes now to prevent us from going off a cliff in the future. It is far better for our legislators to start making the changes now to realign our spending and revenue to our new realities. Incremental changes over the next few years are a much better course than hoping for a new revenue boom to come along.

If that boom does not come – and it appears unlikely to do so – we will quickly find ourselves in a position where our spending is hundreds of millions of dollars higher than our revenue, and our rainy-day fund is empty. When that happens, our state will likely be facing both cuts to state programs and state jobs and increases in taxes.

To prevent this catastrophic event from happening, our Legislature must take action now, and it should start on the spending side. Our government has a moral duty to ensure that the public funds it holds are being used wisely and efficiently before demanding that its citizens pay more to the state. It may be possible to avoid tax increases altogether through a more efficient use of existing resources. However, this only works if all spending is carefully evaluated. There is no room for sacred cows as we try to put Wyoming on solid financial footing.

Through this process, our Legislature must also resist the temptation to push the hard choices further into the future. Some of these choices will not be politically expedient. Pet programs may be cut, and it will require some of our legislators to consciously do what must be done, rather than what they would like to do.

If we are lucky enough to have the statesmen and women in our Legislature who will make those hard choices, our future is still bright. If, however, our representatives do not show the courage to make those hard choices, we may find ourselves in a dire situation sooner than we think.

Khale Lenhart is an attorney in Cheyenne. He is a former chairman of the Laramie County Republican Party. Email:

(0) comments

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.