ENDOW Panel Discusses Economic Diversification
Is Wyoming like Blockbuster, or is it more like Netflix?
Jerimiah Rieman, director of economic diversification strategy for the Office of the Governor, compared the need for economic diversification in Wyoming to Netflix taking over the video rental market from Blockbuster.
At one time, Blockbuster had 9,000 stores. Today it has one, and the online video provider was undeniably the primary cause for Blockbuster’s downfall.
“One had an understanding of what needed to happen, and the other did not,” Rieman said.
He was one of the speakers on a panel discussion Tuesday at the “Strengthening Economies in Wyoming” conference in Gillette.
The National Association of Counties sponsored the event to facilitate talks on how coal-reliant communities can improve their economic situation and escape the “boom and bust” cycle that is so much a part of economies based largely on minerals.
Tuesday’s panel provided highlights of the ENDOW Initiative’s 20-year strategy. Governor Matt Mead established the group and tasked it with an economic diversification plan in the wake of the energy bust that left Wyoming economies reeling.
Rieman said, in developing the ENDOW 20-year diversification strategy, they tried to avoid a “cut and paste” approach, where programs that worked well in other places are emulated here in Wyoming. While they looked at other states’ success stories, they considered Wyoming’s unique characteristics in developing the plan.
“We have to address tax policy in Wyoming,” said Campbell County Commissioner Mark Christensen.
The commissioner explained, in Wyoming, each family receives an average of $33,000 in government services, yet pays an average of $3,200 in taxes.
Residents are receiving far more than they’re paying, and most tax revenue in the state comes from the fossil fuel industry.
If other industries develop, as the ENDOW plan envisions happening, they won’t contribute much to the state revenues. In this scenario, the speakers of the panel discussed, new industries develop, bringing jobs and people to the state.
The increase of residents and businesses then adds to the burden on government services without generating a revenue stream to support them.
Discussions on increasing taxes are often met with the argument increased taxes on industry will drive businesses away and undermine the goals of improving the state’s economy.
Rieman argued this concern is unfounded. He pointed to Smucker’s, which in 2017 considered locating a factory in Cheyenne. The company instead choose to build the new plant in Longmont, Colorado.
Rieman held discussions with representatives of the company after the decision was made, and he said they told him differences in tax rates were not a factor in the decision-making process. They ultimately chose Colorado because it had the workforce the plant would need.
The panel explained that ENDOW can’t really address the problem. Until the legislature takes a look at the state’s tax policy, nothing will change.
“The problem will be addressed when we run out of money,” Christensen warned.
Rieman spoke on the need to improve the job market to avoid the “brain drain” Wyoming experiences as graduates of higher education move to other states to find jobs.
“We are paying for the education of someone else’s workforce,” Rieman said.
One of the goals of Governor Matt Mead’s ENDOW Initiative, which seeks to establish a plan for economic diversification in the state, is to greatly increase graduation rates over the next couple of decades. This is not just four-year degrees, but also vocational certificates.
Sarah Fitz-Gerald, industrial development manager, Wyoming Business Council, said development of the state’s wind and solar portfolio is an important component of economic diversification.
She said Wyoming has a potential for 472 megawatts of wind to be tapped into, but only five megawatts is currently producing. We are 11th in the nation for solar potential, Fitz-Gerald said, but very little of that is developed.
Windmills and solar panels require rare earth minerals, of which Wyoming has a lot of potential for development. Fitz-Gerald said there is an untapped resource in the state.
She also encouraged a “stay strong, get strong” attitude and offered an optimistic view of the future.
Citing increasing rig counts in Wyoming, she said, “We’re on the edge of a boom.”
Outliers Creative, LLC, the publisher of County 17, is owned by The MC Family of Companies, LLC, a company owned by Commissioner Mark Christensen.