Director's Report

January 24, 2007

NEWS from the Equality State Policy Center

Market risk belongs to private sector

State should not speculate with public funds

The Equality State Policy Center (ESPC) thinks the Wyoming Constitution’s provision prohibiting state investment in private sector projects is just fine the way it is, said Dan Neal, the ESPC’s executive director.

A measure proposed by the Joint Minerals, Business and Economic Development Interim Committee calls for amending the Wyoming Constitution to allow state investment in (as well as ownership of) transmission lines, energy facilities and related structures or properties, which “is exactly the kind of private speculation with public funds that Wyoming’s founders sought to prevent,” Neal said.

While proponents of the amendment say it’s needed to boost Wyoming’s energy economy, Neal said the state should be cautious about moving in where private industry has declined to invest.

“Most of the companies engaged in energy development in Wyoming are multinational corporations with the best information available on markets and investments,” said Neal. “If they’re hesitant to build a project, we don’t see any justification for second-guessing the free market and putting public funds at risk.”

“If the state needs additional revenues, one simple, absolutely no-risk alternative is to raise mineral severance taxes,” Neal said. “The Legislature has a study showing that modest increases in mineral severance taxes will not hurt jobs or production, but will generate millions in revenues – without the slightest risk to public funds.”

Moreover, Neal noted, Wyoming’s energy economy is booming and does not need a boost from the state. “We’ve heard testimony this week from state officials and private employers saying they cannot recruit employees because people can’t find housing or child care in Wyoming,” Neal said.

“It would be far better for the state to continue its policy of investing in infrastructure and services than to take on risks that properly belong to shareholders under our free market system,” said Neal.

“Public investment in publicly owned facilities, such as the new super computer project near Cheyenne, is reasonable, because those investments support education, which in turn supports the private sector,” Neal added. “That’s a more proper role for government.”

The resolution is HJ0002 – State engagement in transmission lines & energy facilities.

The Equality State Policy Center, a broad-based coalition of Wyoming interests, works through research, public education and advocacy to hold Wyoming state and local governments accountable to the people they represent, and to encourage and assist state residents to participate effectively in public policy decision-making.

Contact: Dan Neal, executive director, 307-472-5939 dneal@equalitystate.org

Sarah Gorin, board chair, 307-745-8594 sagorin@aol.com