Wyoming’s Economy Today
and Beyond
Presented by: Buck McVeigh
Economic Analysis Division
Wyoming State Government
Economic Analysis Division – Wyoming State Government
© Copyright 2005
Current Economic Conditions
• Favorable:
¾ Energy: production and prices
¾ State revenues: primarily being driven by mineral income
and sales tax (retail trade).
¾ Employment: year-over-year growth, low unemployment
¾ Construction: housing, highways, K-12 schools, UW, and
prisons.
¾ Personal income: the state has done well compared to
the region and the U.S.
¾ Consumer sentiment: retail sales, housing, and autos
Economic Analysis Division – Wyoming State Government
© Copyright 2005
1
Current Economic Conditions
• Unfavorable:
¾ Population: low growth rate and low net-migration.
¾ Uneven growth: energy boom is spreading wealth
unevenly across state.
¾ Undiversified employment base
¾ Workforce availability: indications of strong regional
competition for construction labor. The construction
industry also facing in-state competition from growing
mining industry.
¾ Drought: continues to impact farms and ranches, and
recreational activities.
¾ Brucellosis: Wyoming lost its brucellosis-free status in
February 2004, negatively impacting cattle ranchers.
¾ Inflation is returning.
Economic Analysis Division – Wyoming State Government
© Copyright 2005
Population
• Wyoming - more attractive during the economic
slowdown following 9/11.
– Remained relatively insulated.
• Net migration - positive last 3 years.
• Gained (net in-migration) from the states of
California, Colorado, Nevada, North Dakota, Texas,
and Utah.
• Lost (net out-migration) greatest number of people
to Arizona and Idaho.
• After U.S. economy recovers, net migration zero.
• Population is expected to grow at an annual rate of
0.5%.
Economic Analysis Division – Wyoming State Government
© Copyright 2005
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Wyoming Population and Net Migration: 1970 to 2004
550,000
20,000
Net Migration
15,000
500,000
10,000
475,000
5,000
450,000
0
425,000
-5,000
400,000
-10,000
375,000
-15,000
350,000
-20,000
325,000
-25,000
300,000
Net Migration
Population
Population
525,000
-30,000
'70
'72
'74
'76
'78
'80
'82
'84
'86
'88
'90
'92
'94
'96
'98
'00
'02
'04
Net Migration = Inmigration - Outmigration
Source: U.S. Census Bureau
Prepared by Wyoming Economic Analysis Division
Economic Analysis Division – Wyoming State Government
© Copyright 2005
Wyoming Decennial Population and Projections
900,000
900,000
800,000
800,000
0.5% (most likely)
1.0%
2.0%
700,000
700,000
600,000
600,000
500,000
500,000
Annual increase from 1960 to 2000: 1.0%
400,000
400,000
300,000
300,000
200,000
200,000
100,000
100,000
0
0
1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030
Economic Analysis Division – Wyoming State Government
© Copyright 2005
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Median Age
40
40
U.S.
Wyoming
36
36
32
32
28
28
24
24
20
20
1950
1960
1970
1980
1990
2000
2010
Source: U.S. Census Bureau and Wyoming Economic Analysis Division
Economic Analysis Division – Wyoming State Government
© Copyright 2005
Economic Analysis Division – Wyoming State Government
© Copyright 2005
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Number of Births and Deaths in Wyoming: 1970 to 2003
12,000
11,000
Births
Deaths
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002
Source: Wyoming Department of Health
Prepared by Wyoming Economic Analysis Division
Economic Analysis Division – Wyoming State Government
© Copyright 2005
Births and Deaths for 10 Small Counties: 1971 to 2003
(BH, CR, GO, HS, JO, NI, PL, SU, WA, WE)
2,000
Births
Deaths
1,800
Pop in 1970: 19.0%
1,600
Pop in 2003: 14.6%
1,400
Area: 29.4%
1,200
1,000
800
600
400
200
0
1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003
Source: Wyoming Department of Health
Economic Analysis Division – Wyoming State Government
© Copyright 2005
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Issues with an Aging Population
• Wyoming not unique
– Trend is evident nationally.
• Baby Boomers (born 1946-1964) retiring soon.
– Large proportion of Wyoming population (30%).
• Disruption/”brain drain” in the workplace.
– Managers and skilled workers
• Labor shortage?
– Generation X follows “boomers” with much fewer members.
• Change of thinking on traditional retirement?
– Most “boomers” want to continue working.
• Demand for health care and social services will
increase.
Economic Analysis Division – Wyoming State Government
© Copyright 2005
Total Employment for Wyoming and U.S.: 1977-2003
(Number of full and part-time jobs)
360,000
180,000
US
340,000
170,000
320,000
160,000
300,000
150,000
280,000
140,000
260,000
130,000
240,000
120,000
220,000
110,000
200,000
U.S. Employment (in thousands)
Wyoming Employment
Wyoming
100,000
1977
1980
1983
1986
Source: U.S. Bureau of Economic Analysis
1989
1992
1995
1998
2001
Wyoming Economic Analysis Division
Economic Analysis Division – Wyoming State Government
© Copyright 2005
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Wyoming and US Unemployment Rates: 1977 - 2003
Annual Average
10.0
10.0
9.0
9.0
Percent
U.S
Wyoming
8.0
8.0
7.0
7.0
6.0
6.0
5.0
5.0
4.0
4.0
3.0
3.0
2.0
1977
2.0
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
Source: Wyoming Employment Department
Economic Analysis Division – Wyoming State Government
© Copyright 2005
Employment Anomalies in Wyoming
2003
• Wyoming’s largest employer is Government at
25.2% (2nd only to Alaska). National percent is
16.5%.
• Mining employment, at 7.2%, is ranked 1st in U.S.
National percent is 0.4%.
• Manufacturing employment is less than 4%
(ranked 50th in U.S.). National percent is 11.1%.
• Prof. and Business Services employment, at 6.1%,
is ranked 42nd in U.S. National percent is 12.5%.
Economic Analysis Division – Wyoming State Government
© Copyright 2005
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Number and Percent of Engineers: 2000
101
19
15
Percent
0.0 - 0.4
0.5 - 0.7
0.8 - 0.9
1.0 - 1.3
107
166
71
41
27
12
6
Wyoming = 0.9%
U.S. = 1.3%
0
31
373
100
30
0
61
12
50 Miles
N
21
W
44
252
E
S
75
446
71
Source: U.S. Census Bureau
Prepared by Wyoming Economic Analysis Division
Economic Analysis Division – Wyoming State Government
© Copyright 2005
Non-Agr Employment by Industry (NAICS) for Wyoming: 1972 - 2013
number of jobs (in thousands)
300
300
280
280
260
260
240
240
220
220
200
200
180
180
160
160
140
140
120
120
100
100
80
80
60
60
40
40
20
20
0
1972
0
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
Economic Analysis Division – Wyoming State Government
2008
Government
Other Services
Leisure & Hospitality
Edu & Health Services
Prof & Business Services
Financial Activities
Information
Transp, Wareh, & Util
Trade
Manufacturing
Construction
Natural Res & Mining
Source: Wyoming
Economic Analysis Division
2011
© Copyright 2005
8
Wages in Wyoming
• In 2002, Wyoming’s average annual wage
level was $28,975 (42nd in the U.S).
• Percent change between 2002 and 2001 was
3.3% (tied for 6th in the U.S.).
• Colorado, Utah and Nebraska ranked
11th,35th, and 40th, respectively ($38,005,
$30,585, $29,448).
• Idaho, No. Dakota, So. Dakota, and Montana
ranked 45th, 48th, 49th, and 50th, respectively.
• The national average was $36, 764.
Economic Analysis Division – Wyoming State Government
© Copyright 2005
Wyoming Average Wage Per Job: 1992, 2002, 2012
$85,000
$85,000
$80,000
$80,000
$75,000
1992
2002
$75,000
2012
$70,000
$70,000
$65,000
$65,000
$60,000
$60,000
$55,000
$55,000
$50,000
$50,000
$45,000
$45,000
$40,000
$40,000
$35,000
$35,000
$30,000
$30,000
$25,000
$25,000
$20,000
$20,000
$15,000
$15,000
$10,000
$10,000
$5,000
$0
$5,000
tal
To
nin
Mi
g
cti
tru
ns
Co
on
tu
fac
nu
Ma
g
rin
*
PU
TC
Wh
* TCPU = Transportation, communications, and public utilities;
le
sa
ole
de
tra
ta
Re
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de
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FI
*
RE
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nt
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me
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Se
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$0
FIRE = Finance, insurance, and real estate
Prepared by Wyoming Economic Analysis Division
Economic Analysis Division – Wyoming State Government
© Copyright 2005
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Personal Income
Per Capita PI
% Change
Year Ago
2003
2002
Wyoming1
$32,808
$31,021
(15)
(16)
Rocky Mountain
$29,974
$29,379
+2.0%
U.S.
$31,632
$30,906
+2.3%
1
+5.8%
Numbers in parentheses are U.S. rankings.
Economic Analysis Division – Wyoming State Government
© Copyright 2005
2002 Gross State Product by Industry (NAICS) for Wyoming and U.S.
Agriculture
Mining
U.S.
$10.4T
12.0%
Wyoming
$20.3B
Construction
1.0%
0.9% 4.5%
Manufacturing
14.7%
Wholesale & Retail Trade
1.6%
21.5%
13.0%
2.4%
3.6%
Transportation,
Warehousing, and Utilities
Information
7.6%
1.9%
3.8%
4.6%
13.3%
11.7%
4.8%
4.7%
20.4%
Financial Activities
Professional & Business
Services
Educational and Health
Services
Leisure & Hospitality
5.7%
4.7%
6.2%
13.0%
1.7%
10.3%
10.2%
Other Services
Government
Source: U.S. Bureau of Economic Analysis
Prepared by Wyoming Economic Analysis Division
Economic Analysis Division – Wyoming State Government
© Copyright 2005
10
Housing
• Monthly residential building permits were on the
rise in 2004.
• June and July 2004 single-family permits had
year-over-year changes of +27.6% and +56.1%,
respectively.
• June and July 2004 multifamily permits had yearover-year changes of +325.0% and +310.7%,
respectively.
• Price appreciation in housing during 2004
averaged 7.8% compared to 6.3% in 2003.
• Affordable housing is a problem in many areas.
Economic Analysis Division – Wyoming State Government
© Copyright 2005
Mineral Income and State Finances
“The reason for the volatility
is simple: We are a
commodity market, and
volatility is inherent in
competitive commodities.”
- R. Skip Horvath, president of the
Natural Gas Supply Association
Economic Analysis Division – Wyoming State Government
© Copyright 2005
11
Natural Gas Price ($/mcf): May 2000 - Dec 2004
$10
$10
$9
$9
Differential
Opal Hub
Henry Hub
$8
$8
$7
$7
$6
$6
$5
$5
$4
$4
$3
$3
$2
$2
$1
$1
$0
$0
May00
A ug- N ov 00
00
Fe b- M a y 01
01
A ug- N ov 01
01
Fe b- M a y 02
02
A ug- N ov 02
02
Fe b- M a y 03
03
Economic Analysis Division – Wyoming State Government
A ug- N ov 03
03
Fe b- M a y 04
04
A ug- N ov 04
04
© Copyright 2005
Traditional State Funding
• Main revenue sources:
– Sales and use taxes
– Property taxes
– Investment income
– Federal mineral royalties
– Severance taxes
• Three major funds:
– General Fund
– Budget Reserve
– School Foundation
Did you know?
Mineral income as a %
of all revenue to the
state was:
FY99-00
38.4%
FY01-02
59.5%
Economic Analysis Division – Wyoming State Government
© Copyright 2005
12
Energy Multipliers – Price Changes
• Coal € [ $0.25 per ton price change ]
– $13.3 million revenue change.
• Natural Gas € [ $0.10 per mcf change ]
– $19.7 million revenue change.
• Crude Oil € [ $1.00 per bbl. change ]
– $6.1 million revenue change.
Note: revenue sources include severance taxes, federal mineral royalties, and the
school foundation portion of ad valorem taxes (based on FY05 projections). Source:
January 2005 CREG Forecast and Legislative Services Office.
Economic Analysis Division – Wyoming State Government
© Copyright 2005
Wyoming State Fiscal Profile
Surplus or Shortfall (in millions of current dollars)
$1,500
$1,219
$965
$1,000
$695
$500
$135
($200)
($54)
1999
2000
$178
$0
($500)
2001
2002
2003
2004
2005
Projected biennium balance on January 1 of each year
Economic Analysis Division – Wyoming State Government
© Copyright 2005
13
Wyoming Natural Gas Production and Prices
1,800
8.0
1,600
7.0
Price
1,400
6.0
1,200
5.0
1,000
4.0
800
3.0
600
2.0
400
1.0
200
dollars per MCF
billions of cubic feet
Production
0.0
1981
1983
1985
1987
1989
1991
1993
Source: Wyoming State Geological Survey
1995
1997
1999
2001
2003
Prepared by Wyoming Economic Analysis Division
Economic Analysis Division – Wyoming State Government
© Copyright 2005
Wyoming Oil Production and Prices
160
$40.0
Price
140
$35.0
120
$30.0
100
$25.0
80
$20.0
60
$15.0
40
dollars per barrel
millions of barrels
Production
$10.0
1981
1983
1985
1987
Source: Wyoming State Geological Survey
1989
1991
1993
1995
1997
1999
2001
2003
Prepared by Wyoming Economic Analysis Division
Economic Analysis Division – Wyoming State Government
© Copyright 2005
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Wyoming Coal Production and Prices
400
$12.0
Price
350
$11.0
300
$10.0
250
$9.0
200
$8.0
150
$7.0
100
$6.0
50
dollars per short ton
millions of short tons
Production
$5.0
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
Prepared by Wyoming Economic Analysis Division
Source: Wyoming State Geological Survey
Economic Analysis Division – Wyoming State Government
© Copyright 2005
Mineral Severance Taxes: FY1980 - FY2004
(in millions of dollars)
$600
Other
Coal
Natural Gas
Crude Oil
$550
$500
$450
$400
$350
$300
$250
$200
$150
$100
$50
$0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004
Wyoming Economic Analysis Division
Economic Analysis Division – Wyoming State Government
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Distribution of Federal Mineral Royalties: FY1980 - FY 2004
(in millions of current dollars)
$600
$600
$500
$500
$400
$400
$300
$300
$200
$200
$100
$100
$0
$0
1980
1982
Other
1984
1986
1988
1990
Local Gov't & Cap Constr
1992
1994
1996
LRI/BRA
1998
2000
Highway Fund
2002
2004
Schl Foundation
LRI/BRA = Legislative Royalty Impact Assistance Account/ Budget Reserve Account.
Prepared by Wyoming Economic Analysis Division
Economic Analysis Division – Wyoming State Government
© Copyright 2005
Total Local and State Assessed Valuation
(in millions of current dollars)
$14,000
$14,000
$12,000
$12,000
Other
Oil
Gas
Coal
$10,000
$10,000
$8,000
$8,000
$6,000
$6,000
$4,000
$4,000
$2,000
$2,000
$0
1975
1977
1979
1981
1983
1985
1987
1989
* Other includes other minerals, real and personal property
1991
1993
1995
1997
1999
2001
$0
2003
Wyoming Economic Analysis Division
Economic Analysis Division – Wyoming State Government
© Copyright 2005
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Appropriations from General Fund and Other Reserve Accounts
(in millions of current dollars)
$2,500
$2,500
Other
Public Safety
Health and Family Service
$2,250
Higher Education
K12 Education
$2,250
$2,000
$2,000
$1,750
$1,750
$1,500
$1,500
$1,250
$1,250
$1,000
$1,000
$750
$750
$500
$500
$250
$250
$0
$0
FY93-94
Source: LSO
FY95-96
FY97-98
FY99-00
FY01-02
FY03-04
FY05-06
Prepared by Wyoming Economic Analysis Division
Economic Analysis Division – Wyoming State Government
© Copyright 2005
Wyoming Tax Paradox
• On a per capita basis, Wyoming ranks 2nd
and 3rd highest, respectively, in state and
local government revenue and expenditures.
• Yet, household tax burden ranks among the
lowest in nation.
• No personal income tax.
• Mineral taxes, which residents do not pay,
significantly ease tax burdens.
Economic Analysis Division – Wyoming State Government
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Direct Tax Collections and Public Service Costs: 2001
(For a 4-person family with household income of $40,000 and own home valuing $100,000)
Public Service Costs
Personal Tax Collections
$16,000
$16,000
State Services
$14,000
$14,000
Property Tax
$12,000
Vehicle Registration
$10,000
Alcohol
$8,000
Cigarettes
$6,000
Gasoline
$4,000
Retail Sales
$12,000
$6,000
$2,000
$0
Cigarettes
Alcohol
$1,320
$126
$85
$1
County
$4,000
$0
Gasoline
City/Tow n
$8,000
$2,000
Retail Sales
K12 Education
$10,000
County
$2,400
City/Tow n
$3,600
K12 Education
$5,360
Vehicle Registration
$475
State Services
Property Tax
$750
TOTAL:
TOTAL:
$4,440
$15,800
$2,757
Prepared by Wyoming Economic Analysis Division
Economic Analysis Division – Wyoming State Government
© Copyright 2005
Wyoming’s Economic Future?
•
What’s the future of energy production and revenue?
– Outlook for near term is positive.
– Supply, production, price
– Coal Bed Methane impacted by permitting/environmental regulations.
•
Is our existing tax structure adequate?
–
–
–
–
–
•
Reliant on income from mineral taxes – burden largely exported out-of-state.
Mineral tax revenue not responsive to changes in total personal income (TPI).
No personal income tax
Sales taxes are income inelastic (grow 8.9% for every 10% increase in TPI).
Currently most businesses exempted or excluded from sales taxes.
What about job growth and income?
– Services and Retail Trade forecast to account for 3 out of every 4 new jobs.
– TPI is forecasted to grow at an annual rate of 4.2%.
•
How will population growth affect our current tax structure?
– Jobs boost TPI but have little effect on our state tax revenues.
– More people, more pressure on the demand for public services.
– Not a problem as long as mineral income remains strong.
•
Health care:
– Increasing demand; personnel/facilities shortages
– Availability/affordability
Economic Analysis Division – Wyoming State Government
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Economic Analysis Division – EAD
Dept. of Administration & Information
Wyoming State Government
http://eadiv.state.wy.us
[email protected]
307.777.7504
Economic Analysis Division – Wyoming State Government
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