State Fiscal Briefs

June 2020

Wyoming’s budget basics

According to the National Association of State Budget Officers (NASBO), Wyoming’s total expenditures in fiscal year (FY) 2019 were $4.7 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2019 were $2.1 trillion, ranging from $4.5 billion in South Dakota to $311.3 billion in California.

Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.

Per the US Census Bureau, Wyoming’s combined state and local direct general expenditures were $8.9 billion in FY 2017 (the most recent year census data were available), or $15,354 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $9,446.

Wyoming’s largest spending areas per capita were elementary and secondary education ($3,298) and health and hospitals ($2,724). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.

Wyoming’s combined state and local general revenues were $8.6 billion in FY 2017, or $14,816 per capita. National per capita general revenues were $9,592. Wyoming does not levy a corporate income tax or individual income tax. After federal transfers, Wyoming’s largest sources of per capita revenue were charges ($2,956), such as state university tuition and highway tolls, and property taxes ($2,188). Wyoming also collects a relatively large amount of revenue from severance taxes, which are taxes on the extraction of natural resources such as oil and natural gas. Wyoming’s per capita severance tax revenue was $771 in 2017. Severance tax revenue is extremely volatile and can quickly rise and fall with the price and production of natural resources.

Wyoming’s politics

Governor Mark Gordon, a Republican, was elected in 2018 with 68 percent of the vote. The next gubernatorial election is in 2022.

Republicans control both the House of Representatives (50 Republicans to 9 Democrats and 1 independent) and Senate (27 Republicans to 3 Democrats), with veto-proof majorities in both houses. Control of the governor’s mansion and each house of the legislature gives Republicans a trifecta in Wyoming. All Wyoming House seats are on the ballot in 2020 because representatives serve two-year terms. Senators serve four-year terms; roughly half the senatorial seats are on the ballot in 2020, and the other half will be up for election in 2022.

Wyoming’s budget institutions, rules, and constraints

Wyoming uses a biennial budget. Wyoming uses one of the least strict processes in implementing its budget. There are no balanced budget requirements, no tax or expenditure limits, and no limits on authorized debt and debt service.

(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)

Wyoming’s recent fiscal debates

  • In 2017, 5 percent of Wyoming’s state and local general revenue came from severance taxes. That was the second-largest percentage in the nation (trailing only North Dakota; Alaska also collected 5 percent from severance taxes), but it was down from 7 percent in 2016. Although severance tax revenue lets Wyoming keep other taxes low (and not tax individual and corporate income), it also creates challenges. The volatility of severance tax revenue requires states to have flexible budgeting arrangements, other readily exploitable revenue sources, or significant rainy-day funds to accommodate unforeseen changes in severance tax revenue flows. In 2019, Governor Gordon and legislators discussed moving the state away from its heavy reliance on severance tax revenue. And the legislature debated several revenue proposals that year, including bills to create a 7 percent corporate income tax, establish a 4 percent individual income tax on taxable income over $200,000, and broaden the general sales tax base (paired with a rate reduction). None of these bills were successful, though. At the end of 2019, with severance tax revenues down, Governor Gordon announced the state would use reserve funds to avoid budget cuts.
  • Wyoming is one of 14 states that have not accepted funds for expanding Medicaid eligibility created by the Affordable Care Act. The Urban Institute estimates that if Wyoming had accepted Medicaid expansion, it would have received 16.6 percent more federal Medicaid funds ($94 million) and increased its state spending on Medicaid 4.9 percent ($15 million). Urban estimates that savings from Medicaid expansion (e.g., lower spending on uncompensated care) would, like with other states, fully or largely offset Wyoming’s additional direct state spending. The Wyoming legislature has voted down expansion several times but is expected to debate expansion again in 2020.

Wyoming’s current budget

Wyoming last enacted a budget in 2018 for FY 2019–20. In December 2018, outgoing governor Matthew Mead submitted a supplemental budget that included mostly one-time expenditures (e.g., funds for wildfire costs) as well as a pay raise for public employees. In January 2019, Governor Mark Gordon made his own supplemental budget request that, like his predecessor’s request, mostly included one-time appropriations for wildfire and agricultural needs. Governor Gordon emphasized Wyoming’s agricultural resources in his 2019 state of the state address, discussing plans for investments in agricultural research and higher education.

The legislature passed supplemental appropriations in February 2019 in a somewhat contentious process. Governor Gordon issued 14 line-item vetoes, mostly over legislative requests for task forces, state studies, and new public employees, which he deemed “legislating from within the budget.” The legislature was only able to override two of the governor’s vetoes, both related to creating new positions in the state engineer’s office. However, the appropriations in the budget were roughly in line with the governor’s supplemental request.

Governor Gordon released his proposed FY 2021–22 budget in January 2020 and gave his 2020 state of the state address in February 2020.

For more on Wyoming’s budget, see