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Luck and the economy

Aug 30, 2017 By Steven R. Peck, Publisher

Matthew H. Mead, 32nd Governor of Wyoming, isn't a gusher. That is, he doesn't make it a point of his personality to be constantly cheerleading and boosting anything and everything about Wyoming. He takes a realistic approach and tries to give a realistic assessments of conditions as they are.

Those are pretty good traits in a governor. They've been particularly useful in the past few years, when the state has had its feet stuck in the quagmire of recession.

So, it was encouraging, undeniably, when the governor said Tuesday that the state economy is improving. Matt Mead is not the kind of man who would say it if it weren't true.

Central to his assessment was an upward revision in the revenue report prepared by the Consensus Revenue Estimating Group in Wyoming. This is the cadre of economists whose projections for state revenue form a starting point for state budgeting and related legislation.

CREG has had a track record of low-balling the state revenue picture through the years. Thankfully, that may be what is happening again now. Actual revenue figures in the most recent review period, meaning money received rather than predicted, came in at $144 million more than the CREG forecast.

That's real money, and it will make a difference as the state works through its burdensome fiscal challenges, particularly related to public education. But it isn't enough to make the problem go away. As Gov. Mead put it in his speech Tuesday to Riverton Rotary, "it's less-bad news."

There weren't any fireworks and marching bands accompanying that low-key pronouncement. But nobody was complaining. Given what Wyoming has endured in recent years, "less bad" is good.

Of note among Mead's subsequent remarks was an update on his ENDOW program aimed at diversifying the state's economy. The topic of diversification itself has become almost a cliche in the state -- every political candidate touts it -- but the governor's program takes a deeper, longer-term approach. He envisions an initiative that will require years of persistence, well into the next governor's term, and perhaps into the one after that.

Diversification has been emphasized before, at least rhetorically, but it's never really gone anywhere as a cohesive, top-down plan. The simple reason is that the state's energy economy always has superseded anything put forward in the name of diversification. Just when it has looked as if the state would need to commit to a diversification program in the long term, there's been another boom in uranium, coal, oil or natural gas, sometimes in combination. Those billion-dollar budget surpluses of the first decade of the new century tended to take the urgency out of diversification talks.

Mead wants to change that, regardless of how the energy economy performs. In Tuesday's speech he said he isn't willing as governor to tell the state's population that the solution to the recession is to wait around until minerals prices rebound.

"That's not a plan," Mead said. "That's saying we are leaving our entire future to luck."

There's more to it than that. A thriving energy economy isn't simply a matter of chance. Lots of powerful and market-driven economic forces are at work. The luck comes in being a state with minerals and energy wealth -- and Wyoming is very lucky in that sense.

But the governor is right that waiting and hoping is no substitute for planning. A sensible, measured, forward-thinking diversification program is a fine idea. Whether it will continue to be seen that way after Mead leaves office as expected in about 17 months is the important question. Part of the answer will come if energy markets do improve. That single development will do more, and faster, to restore Wyoming's economy than anything we might be planning now.

By all means the State of Wyoming ought to push forward with ENDOW. It will require state leaders to take a longer-term view than most elected officials are accustomed to. If they can manage it, then those in this generation of leadership will have earned a worthy legacy.

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2017-09-24