Wyoming Revenue Projections Down
The Consensus Revenue Estimating Group (CREG) issued their January report this week. Severance taxes were up because of higher than anticipated oil prices and also natural gas was up. The problem however was in the projections for our investment income, which has now been revised downward by $53.8 million. Overall, the net decrease to projections is $7.5 million for the 2009-2010 biennium. Thank goodness that the decrease from the investments was tempered by the increase in minerals. The interest rates being earned on our investments is down.
Even though, oil is reaching $100 per barrel, this appears to be a high and not a new plateau. CREG has moved the oil forecast from $54 to $58 for the coming year. Natural gas they are estimating at $3.50/mcf for next year, with the hope that we will be back up around $5/mcf by 2009.
Congress just passed a law that lowered the state share of federal royalties. This will affect us by a loss of $17.3 million in 2008. Of that amount, school capital construction will take a hit of $3.4 million. Enzi and Barrasso are working to reverse the congressional action of taking away a portion of our royalties.
The loss to royalties also will affect coal lease bonus payments, which will make a direct hit on school capital construction and the money that we use for Hathaway Scholarships. As some of you know from previous postings on this blog, we try and watch the coal lease bonus money closely because that money is used for both school construction and the Hathaway Scholarships. The Federal Government declared the 2007 sale void because the bids were too low. The next sale is to occur in February. So right now, we are only profiling coal lease bonus money through 2009 and then there is no money after that. So hopefully, the sales will go better this February.
The bottom line is that there will not be much money this session for legislators to fund anything out of the main system. Right now it looks like there might be about $62 million unappropriated funds, but bills will start to get filed this month, that will eat into that amount very fast.