CREG Report Issued
Throughout the year, the State of Wyoming tries to estimate revenue coming into state coffers so that the policy makers (legislature and Governor) know how much money will be available for government operations. This task is accomplished through a joint legislative/executive branch group called the Consensus Revenue Estimating Group (CREG). Policy makers throughout the state anticipate the “CREG reports” and then discuss them ad nauseum after we receive them. The last report came out in May. The October CREG report just came came out yesterday. The big news is that the revenue estimated in October has decreased $25.5 million from the May 2009 forecast. The majority of the decrease has come from sales and use tax forecasts.
What is interesting is that investments are up and severance tax is up for the remainder of this budget year. But the news is not so good for the next fiscal year. 2011-2012 is not shaping up to look good. At this point they are estimating that we are going to be behind by about $382.8 million. The good news is that the Wyoming Legislature did make a really good decision back in 2005 to create a rainy day account (the Legislative Stabilization Reserve Account) which has almost $700 million sitting in it. There are also other reserve accounts, such as a Water account that has about $123 million in it to be used for building dams.
The Legislature gave the Governor the power last year to make 10% cuts throughout the past year, which has helped to bring down the budget by about $200 million.
Some good news in the report is that natural gas prices are holding. Also the price differential with Henry’s Hub (Louisiana) is almost on parity, mostly due to the new REX (Rocky Mountain Express) pipeline that just was completed to the midwest.
This is just my first cursory review today and I will follow up with more detail.