Wyoming's budget may affect businesses more than anything else

“The budget really is the first piece of legislation that is of utmost importance to the business community,” Cindy DeLancey, president of the Wyoming Business Alliance and the Wyoming Heritage Foundation, told the Wyoming Business Report.

“It’s so important because it really is where the discussion happens between the executive branch and the legislative branch, making sure agencies are properly resourced to conduct the business of the state,” DeLancey said.

2025-26 Biennium Budget

Late in 2023, Gov. Mark Gordon submitted his 2025-26 biennium budget to the Joint Appropriations Committee, calling his request a “fiscally conservative budget [that] reflects the beginning of the end of excessive federal largess.”

Since then, members of the JAC have been developing “a conservative, balanced budget,” according to a Jan. 6 opinion piece by Senate President Ogden Driskill, R-Devils Tower, and House Speaker Albert Sommers, R-Pinedale, published in the Wyoming Tribune Eagle. The 12-member panel has heard from state agencies over the past several meetings, with leaders presenting a fiscal projection of what their department needs to keep running.

Sen. Dave Kinskey, R-Sheridan, a longtime member of the JAC, said that this year, much of the budgeting process has been “playing defense” against federal overreach.

“A lot of initiatives out of the Biden administration are really onerous to Wyoming business in the energy industry, and in trying to shut down multiple use on public lands. That hits agriculture, it hits hunting, it hits tourism,” Kinskey said.

While he said he ultimately hopes to limit government expansion to the bare minimum, state departments must be able to operate.

“I’m not a big fan of expanding bureaucracy, but we have to play defense. We have to make sure we have adequate resources in departments like [the Wyoming Department of Environmental Quality] DEQ … to make sure that our people don’t fall behind on these regulatory initiatives, or [to prevent] applications from falling by the wayside. We have to keep business going,” Kinskey said.

DeLancey said the purpose of the budget session will be to set state spending for the next biennium, from July 2024 through June 2026, ensuring there are adequate resources available for state agencies, which businesses rely on heavily. Entrepreneurs rely on officials within DEQ, for example, to process permits, do inspections and keep business moving.

“This is something that the business community watches very closely, that the executive branch has enough funding to facilitate business,” DeLancey said.

Property tax relief

Gordon’s budget request included adding $20 million to the Department of Revenue to provide property tax relief for Wyoming residents over the next two years, after the same department distributed $8.3 million to 9,000 households last year.

“Many Wyoming people have experienced property tax bills that have gone up significantly over the last three years, some communities more so than others,” Gordon wrote.

Rising property taxes also affect the state’s businesses, large and small, according to DeLancey.

“Businesses are paying the majority of taxes, particularly the extraction industries, and ensuring that there is no more burden placed on them is something that we are closely watching,” she said.

Half a dozen bills relating to property tax relief, regulations and classes were posted by mid-January. If adopted, House Joint Resolution 1, “Property tax-classes of property and residential value,” would create separate property classes for assessing residential real property, commercial property, agricultural property and personal property for taxation purposes.

Kinskey said that state lawmakers should “do no harm,” meaning limiting new regulatory burdens and unnecessary taxes.

“I would like to see property tax relief,” he said. “Not every part of the state has had a run-up on valuations, but those that have, it’s been double digits. The Legislature failed to put anything together last session, except for the rebate. That helps those most in need, but you have to apply for it. In my view, if you’re going to give property tax relief, give it to everybody.”

Electricity, utility rates

Following a nearly 30% requested increase in proposed electric rates for a quarter of the state’s population, many in the state’s business community are watching a slate of legislation aimed at utility regulations and rate setting. In December, the Wyoming Public Service Commission (PSC) slashed a request from Rocky Mountain Power to increase retail electric service rates, but approved a portion of increases that affected residents and businesses effective Jan. 1.

Simultaneously, the Joint Corporations, Elections and Political Subdivisions Committee debated a raft of bills dealing with rate setting, and several were posted as of mid-January. Senate File 20, “Electricity rates for costs that do not benefit Wyoming,” would limit the amount of costs associated with facilities built or operated “primarily for the benefit of other states” from being passed on to in-state ratepayers. Senate File 21, “Public utilities-net power cost sharing ratio,” specifies a sharing of electric supply costs between a public utility and its customers.

“We are watching the cost of utilities and electricity. That is something that touches every business,” DeLancey said, noting that within the Wyoming Business Alliance membership are large companies like Rocky Mountain Power and smaller, mom-and-pop businesses along Main Street.

“We need to have the lights on. We need to have them on in an affordable way, but it has been complicated at every level. The cost of delivery has exponentially increased, but [it is important to] make sure the rates remain stable and affordable,” she said.

Kinskey, however, said the regulatory environment has protected electric utilities “so they can demand anything they want.”

“That simply has to change,” he said.

John Burbridge, chief counsel for the PSC, said that the 2023 decision from the PSC on the Rocky Mountain Power rate increase will represent an average 8.3% increase on a customer’s bill. However, that rate is individually affected by usage, taxes and customer class. According to Burbridge, the PSC sees a different number of rate increase requests each year, and can’t predict what 2024 will bring.

“Some companies come in less frequently than others,” Burbridge said, noting that the PSC takes applications throughout the year. “And until we get an application, we don’t know why” a company is making a request, he said.

Other issues

DeLancey said the Wyoming Business Alliance will watch discussion on special districts and the state’s education savings account. Kinskey said he supports Gordon’s initiatives like bringing a nuclear power TerraPower Natrium Reactor Demonstration Project to Kemmerer. He said he also always supports putting money into the state’s savings accounts.

The budgeting process matters to everybody, particularly business owners, Kinskey said.

“Business tends to get hit hardest and first if government gets inflated, so there should be an interest in making sure there is real fiscal conservatism here,” he said.

The 2024 Budget Session of the 67th Legislature will start on Feb. 12, and is scheduled to conclude 20 working days later, on March 8.