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Wyoming Wrangles With the Horns of a Dilemma: Growth : Some tout need for expansion. Many, however, see urban problems encroaching on range.

November 12, 1996|LOUIS SAHAGUN | TIMES STAFF WRITER

CHEYENNE, Wyo. — High-tech industries and recreational opportunities are the economic engines that have made the West the fastest-growing region in the United States.

Everywhere, that is, except Wyoming.

But that doesn't seem to bother many Wyomingites who view the so-called "new West" with suspicion, equating growth with urban problems of traffic congestion, pollution and crime.

For nearly three decades, severance taxes imposed on oil and mineral producers have underwritten almost all public services for 480,000 citizens, who pay no corporate or state income taxes.

But their dependence on these industries now has been rattled by a state Supreme Court order that Wyoming equalize funding for its public school system. The order has left the state Legislature grappling with options that include raising taxes on minerals or dipping into the pockets of tax-averse citizens.

The problem is that property taxes in mineral-wealthy Wyoming school districts raise far more money per student than in mineral-poor districts. The court has ordered that financing be based on the state's wealth as a whole.

Wyoming is at a crossroads. The court order has triggered calls for diversification and an economic vision for the entire state.

But change will not come easily in a state where people want to keep government out of their lives.

There are also signs of inertia.

For example, Gov. Jim Geringer launched a program in October that offered a handful of cities modest development assistance, but only if they want it. And a brainchild of the state Department of Economic Development is a plan to knit communities together by building more front porches. So far, that year-old plan has produced one new front porch: a symbolic model added onto the Douglas City Hall.

"We don't define economic growth the way other states do," Geringer said in an interview. "If the alternative is high growth, high anxiety, crime and pollution, then what we are doing is worth the gamble.

"When the dust settles and urbanization is complete in other states, we will be envied. Wyoming will be seen as the true new West, the last state standing with wide open spaces, clean air and a healthy public attitude."

But critics say that without an overhaul of the state's tax system--under which minerals account for more than half of all state revenues, compared with 1% nationally--dreams of diversification and a release from cycles of boom and bust will never be realized.

In the meantime, 70% of all college graduates leave the state because there are few jobs to keep them here. And the severance tax system, which helps pay for state infrastructure projects, public services and education, discourages growth, which would spread those finite revenues more thinly among an expanding population.

Severance taxes on Wyoming coal, oil, natural gas, soda ash and uranium in fiscal 1995 totaled about $184 million, less than half the amount raised a decade earlier.

"We've trapped ourselves," said Shelby Gerking, a professor of economics at the University of Wyoming in Laramie.

"Nothing will change unless the tax structure is reformed," Gerking said. "Unless the state has a fiscal or tax structure that will accommodate growth, it is not likely to try very hard to have it or even promote it."

Philip Burgess, who heads the Center for the New West, a free-enterprise think tank, believes that "the court order is forcing many Wyoming civic leaders to come to grips with a new reality.

"Those who want to keep Wyoming the wildest and mildest part of the country and forgo economic diversification may wind up shooting themselves in the foot by becoming very vulnerable to the next energy crisis," Burgess said.

However, with the state scrambling to find alternative sources of revenues to satisfy the court's directive, advocates of growth are in no position to ask for handouts.

"There could not be a worse time to ask the state to fund incentives to attract new businesses to Wyoming," said Greg Palmquist of Cheyenne Leads, a private, nonprofit group dedicated to developing Cheyenne, Wyoming's largest city, with a population of 53,000. "Some companies considering a move to Wyoming are waiting to see how things shake out."

Or, local boosters fear, companies are moving to other states where shifts away from natural-resource-based economies are sparking financial booms--and new centers of power. Eight of the nation's top 10 job-producing states are in the West, as are 7 of the 10 states reporting the most rapid gains in personal income.

Wyoming is not among them.

Apart from Jackson, which plans to expand over the next two decades to become one of the largest playgrounds for the rich in the United States, much of Wyoming remains what one resident described as "scenically challenged" plains crossed by two-lane roads connecting isolated burgs serving miners, oil field workers and cowboys.

"So what if some other state makes more microchips than we do," said Gene Bryant, director of the state Department of Commerce.

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