With the decline in the Wyoming economy, all projections of income for the coming biennium show that state revenue from taxes and royalties will be down. The same economic decline has caused demand for state services to increase. In addition to substantial additional requests from the Department of Health and Social Services, the University of Wyoming is projecting a twelve percent (12%) increase in its budget, school districts want more state funding to help pay higher teacher salaries and community colleges are asking for a thirty percent (30%) increase in state funds. In addition, there is a widespread desire for the state to spend more money in the area of economic development. It is expected that federal funding—especially in block grants and in revenue sharing programs—is to be drastically reduced.

The reconciliation of increasing demands for state expenditures and declining state revenues will require careful legislative discipline, harsh decisions and unpalatable political choices. For the first time, Wyoming, which has been living “high, wide and handsome” must seriously cut state spending and eliminate or reduce certain programs if the budget is to be balanced and taxes are not to be raised.

In addition to these decisions, the legislature must face the proper funding of the state’s unemployment compensation plan, which is out of balance and in disarray, and must address the insurance “crisis” which has been caused by the withdrawal of most major insurors from the business of protecting state and local government entities.

The choices available to meet those challenges will be examined and certain broad solutions suggested.