GILLETTE — The phrase “new norm” has been thrown around in Gillette and Campbell County the past few years to refer to a world with declining coal revenues.
Now some county officials have taken on the slogan in an effort to prepare the government for the future. With all the uncertainty surrounding the mineral industry, they want to prepare for the worst, just in case.
It’s going to be a few months before Campbell County departments start budgeting for fiscal year 2020-2021. But at a managers meeting Tuesday afternoon, Campbell County Public Works Director Kevin King suggested the county be proactive and start planning ahead.
“We have some time between now and January, we can put some heads together and start looking at ways we can be more efficient,” he said.
It is is not meant to panic anyone, he said. Rather, he wants to come up with solutions before substantial decreases in revenue hit the county.
“We’ve heard the term ‘new norm’ for several years now,” he said, adding that he wanted to put the term into perspective.
Annual mill levy revenue from coal has made up 25 percent of the total county budget in the last nine years. Direct mill revenue from coal, oil and gas makes up one-third of the budget.
During that same time frame, coal production has decreased 4 percent, or 14 million tons, each year, and estimates show the annual decrease could reach 10 percent per year in the future.
For each $1 billion drop in assessed valuation, the county loses out on $11 million in tax revenue. From 2015 to 2017, Campbell County’s assessed valuation dropped from a record high of $6.2 billion to $4.2 billion. In the two years since, the number has slightly increased.
But the county can’t expect it to keep growing. Commission Chairman Rusty Bell said he expects next year’s assessed valuation to be lower.
In the months leading up to fiscal year 2017-2018, the county commissioners asked county departments to prepare two budgets: one with a 7 percent decrease from the year before, and one with a 12 percent drop.
The 12 percent decreases were “extremely difficult,” King said, and they got into major cuts in workforce and services. The overall drop ended up being 3.5 percent.
“What happens if we’re asked to do that annually, or every two years?” he asked. “Would we be able to provide the same level of service?”
King wants to put together a committee, with direction from the commissioners, to find ways the county can operate and continue its level of service with less revenue from the energy industry.
“Can we rethink how we do business and continue to provide the excellent service in a changing economy?” he asked.
He compares it to the county’s continual contingency planning for disasters and severe weather.
“What you hope is you never have to use it, but if you do, you’ve got it,” King said. “That’s what I’d like to see here. I’d like to be ahead of the curve.”
Campbell County could have a stroke of good luck. Oil could explode, or the Carbon Valley concept could become a reality and turn northeast Wyoming into a hub of advanced carbon research, King said. But it can’t count on that happening.
And even if it does happen, he added, “I don’t know if that’s going to be quick enough to get us over the hump.”
“We’re going to have to get creative,” he said. “Let’s sit down together and chart our destiny.”