Oil and natural gas drilling will pump up Wyo.'s coffers
By Dennis Cauchon, USA TODAY
Wyoming, the state with the fewest people, has one of the nation's biggest budget surpluses.
The state has built a $500 million cushion largely because it's a hotbed of drilling for oil and natural gas. High energy prices have sent tax revenue from oil and gas soaring. Wyoming expects to add another $500 million to the surplus by June 30, 2006.
The projected $1 billion windfall is worth about $2,000 for each of the state's 501,000 residents. "We are in an enviable position," budget director Mike McVay says.
Finances have improved in most states because of spending restraint, tax hikes and a growing economy. But Wyoming isn't just recovering - it's swimming in money.
Democratic Gov. Dave Freudenthal has proposed spending about $700 million of the surplus to build and repair schools and prisons; increase aid to local government; and raise pay for state workers.
McVay says Wyoming has a backlog of spending needs because of lean times in the 1990s, when oil and gas prices were low. The state had a $600 million budget shortfall in 1999.
Republicans, who control the Legislature, have given mixed reviews to the governor's plan.
Republicans in the state House of Representatives have suggested spending only one-third of the $1 billion. They would put the rest of the money in reserve funds.
"The last time we had a huge deficit, everyone said, 'Oh please, Lord, let us have a boom again and we promise not to squander it,' " says Republican House Majority Leader Randall Luthi of Freedom, Wyo. "I hope we can remember that pledge."
Tax cuts are unlikely. Wyoming has a 4% sales tax and no income tax. The state is reluctant to cut the sales tax because it is paid mostly by tourists, Luthi says.
The Legislature convenes Feb. 9.
"It's going to be fun," House Speaker Fred Parady says. "We can set Wyoming's future."
By Dennis Cauchon, USA TODAY
Wyoming, the state with the fewest people, has one of the nation's biggest budget surpluses.
The state has built a $500 million cushion largely because it's a hotbed of drilling for oil and natural gas. High energy prices have sent tax revenue from oil and gas soaring. Wyoming expects to add another $500 million to the surplus by June 30, 2006.
The projected $1 billion windfall is worth about $2,000 for each of the state's 501,000 residents. "We are in an enviable position," budget director Mike McVay says.
Finances have improved in most states because of spending restraint, tax hikes and a growing economy. But Wyoming isn't just recovering - it's swimming in money.
Democratic Gov. Dave Freudenthal has proposed spending about $700 million of the surplus to build and repair schools and prisons; increase aid to local government; and raise pay for state workers.
McVay says Wyoming has a backlog of spending needs because of lean times in the 1990s, when oil and gas prices were low. The state had a $600 million budget shortfall in 1999.
Republicans, who control the Legislature, have given mixed reviews to the governor's plan.
Republicans in the state House of Representatives have suggested spending only one-third of the $1 billion. They would put the rest of the money in reserve funds.
"The last time we had a huge deficit, everyone said, 'Oh please, Lord, let us have a boom again and we promise not to squander it,' " says Republican House Majority Leader Randall Luthi of Freedom, Wyo. "I hope we can remember that pledge."
Tax cuts are unlikely. Wyoming has a 4% sales tax and no income tax. The state is reluctant to cut the sales tax because it is paid mostly by tourists, Luthi says.
The Legislature convenes Feb. 9.
"It's going to be fun," House Speaker Fred Parady says. "We can set Wyoming's future."
