Rob Godby, an associate professor in Economics and Finance at the University of Wyoming, had some advice this summer to those who want to diversify the state’s economy:
Diversification of Wyoming’s tax structure needs to accompany any effort at diversification of economic activity here.
Here’s what Godby told the Laramie Boomerang in June:
Our entire fiscal model depends on taxing other people through taxing energy commodities we ship out of state. If we were to develop a new economy — say it’s high-tech — we’d still be broke as a state using the current revenue model with no income tax, no corporate tax, depending heavily on property taxes paid largely by the energy industry. A lot of taxes are paid based on production potential. Sales tax is levied on activity we do in energy.
…At the end of the day, we need a new revenue model, and we still need a new model to tax that new base. It’s not to say it can’t be done, but the current economic model needs to change fundamentally if we are going to diversify the economy.
Meanwhile, he noted:
State services are essential in attracting the economic development we want to see occur — everything from infrastructure, good healthcare services, high-quality education — all of that is essential and requires government revenues. It’s a chicken-and-egg scenario: where does the revenue come from that we might need to support necessary investments to diversify the economy?
…People have become pretty used to having other people pay for services. Asking people in Wyoming to share a larger part of the burden is not going to be popular.
Read the entire Boomerang interview with Godby.