Energy boosts Wyoming’s tax income at start of year
CASPER, Wyo. (AP) — The sales of products that can be taxed in Wyoming accelerated to $3.9 billion for the first few months of 2018, thanks largely to a buoyed energy sector.
The total income from sales and use taxes increased by 64 percent in Converse County, the center of current oil interest, and 50 percent in Sublette County, home to the state’s large gas fields, from the start of 2017 to the beginning of this year, according to an economic summary from state economist Wenlin Liu released Monday.
Liu said improvements are also happening nationally, thanks to federal tax cuts and government spending, though the rapid growth could stall.
For Wyoming, the gains are largely from energy industries picking up after a traumatic downturn that plunged Wyoming into a recession. The turnaround is particularly visible in the oil sector, according to the report.
Crude prices have risen to pre-downturn heights. The national spot price currently sits in a narrow band near $70 a barrel. That boost in commodity price has encouraged drilling and spending in Wyoming’s fields.
“The mining sector experienced a year-over-year expansion of 45.1 percent due to increased sales of equipment, supplies and services from new energy exploration and production activity,” the report states.
The first three months of the year brought in $195 million in mineral severance taxes, nearly 40 percent higher than the same period last year, the Casper Star-Tribune reported .
Job growth in mining rose by 11 percent from last year, with the addition of 2,030 positions. The number of construction workers continued to decline, though the bleeding from that industry has slowed. Government jobs, which represent a significant portion of the state’s labor force, dropped by 1.5 percent, or 1,070 jobs. The drop in revenue from fossil fuel extraction during the downturn significantly cut government spending in the state.
Unemployment in Wyoming is on par with national rates as many unemployed people simply left the state during the recent downturn. The unemployment rate reveals the tally of able bodied workers looking for work relative to the current labor force. The national numbers are low as many of the “discouraged workers” pushed out during the country’s recession are returning to work, said Liu, the state economist.
Workers are returning so quickly, in fact, that the low unemployment rate is considered too low by many economists. In April, the number of job openings outnumbered the number of jobs seekers, Liu said. That imbalance creates wage competition, then inflation, then the risk of recession, he said.
Liu’s report notes one other factor that could have a depressing impact on the current national growth: the president’s tariffs on a number of countries, which will affect a number of industries.
“A developing trade war between the U.S. and its trading partners is a mounting threat to economic expansion,” the report states. “Its impact of uncertainty on businesses is particularly difficult to gauge.”
Information from: Casper (Wyo.) Star-Tribune, http://www.trib.com