- Associated Press - Friday, January 9, 2015

CASPER, Wyo. (AP) - Wyoming’s sources of tax revenue are the second-most volatile in the nation, according to a new study.

The study released this week by the Pew Charitable Trusts says Wyoming’s 12.1 percent annual fluctuation in total state tax collections puts it behind only Alaska’s 34.4 percent rating.

Pew researchers found that states that rely on mineral extraction severance taxes often show the highest tax volatility.

“Severance taxes on natural resource extraction, primarily oil and gas, are often the most volatile major tax source in six of the nine states that have that type of tax,” said Brenna Erford, state fiscal health manager at the Pew Charitable Trusts.

The 12.1 percent rating is higher than the national norm. The study found that 39 states showed volatility ratings between 3 and 7 percent.

Pew’s “Fiscal 50: Trends and Analysis” study tracked the fluctuations in 20 years of state tax revenue.

Erford said that to offset the volatility of severance tax revenue, states are often forced to save money to cover slow tax years.

“Reliance on a particularly volatile tax source often leads to having the highest reserves and balances of the states,” she told the Casper Star-Tribune (https://bit.ly/1AQzL1W).

The study also looked holistically at states’ fiscal health, considering changes in state spending and states’ long-term fiscal responsibilities.

In Wyoming, overall state spending decreased by 1.4 percent between 1993 and 2012. The state’s $1.7 billion pension obligations are its largest debts, according to the study.

Wyoming also owes $243 million dollars in retiree health care and $114 million in various debts.


Information from: Casper (Wyo.) Star-Tribune, https://www.trib.com

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