Wyoming revenue forecast tops January estimate as record investment income boosts reserves
October 31, 2025 | Appropriations, Joint & Standing, Committees, Legislative, Wyoming
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Don Richards, the Legislative Service Office analyst presenting the October Consensus Revenue Estimating Group (CREG) report, opened the Appropriations Committee hearing by saying fiscal year 2025 collections exceeded the January CREG forecast. “Fiscal year 2025 exceeded the revenue collections as compared to the January Craig forecast,” Richards said, noting CREG generally biases estimates slightly low to avoid overpromising.
Why it matters: Richards told lawmakers the general fund and the budget reserve account were about $71.9 million ahead of the January forecast and that, when the general fund, budget reserve and Legislative Stabilization Reserve Account (LSRA) are treated collectively, the biennium outlook is about $88.5 million stronger than previously projected. That extra room comes mainly from unexpectedly large investment returns and from agency reversions — unused appropriations that revert to the state.
Major details: Richards said investment income for the state reached approximately $1.86 billion this year, a record that, by constitutional and statutory rules, required significant deposits to the School Foundation Program (SFP). He laid out two remedies to a $70.3 million shortfall in a longstanding “fund swap” intended to move federal mineral royalty receipts into the Common School Permanent Land Fund reserve: transfer available SFP reserve dollars into the reserve account or direct fiscal‑year 2027–28 federal mineral royalties (FMRs) to make up the shortfall. “You could transfer money from the school foundation reserve account where there's $88 million,” Richards said, or you could direct 27–28 FMRs to the reserve account.
CREG revised several near‑term assumptions: oil prices were lowered by $10–$15 per barrel from the January baseline, and CREG trimmed projected sales and use tax receipts — the first year‑over‑year decline in about five years — citing weakness in mining, construction and large industrial trade while retail and lodging remained relatively strong. CREG also incorporated the statutory transfer of motor vehicle sales/use tax revenue to the Wyoming Department of Transportation and reduced the expected transfer for the coming year from about $69.2 million to $62.0 million because vehicle purchases have softened.
School Foundation Program: The SFP is roughly $72.4 million ahead of the January forecast, Richards said, driven largely by investment earnings and about $26.0 million in reversions tied to capital projects that came in under budget. He cautioned that higher local property tax receipts and other formula components reduced forecasted payments to districts by about $79.5 million over the biennium, which alters near‑term pressure on the LSRA but does not eliminate future risks.
Coal, gas and other commodity outlooks: Richards described a mixed commodity picture. CREG lowered coal federal mineral royalty estimates in light of the recent royalty‑rate change but noted modest production increases could mitigate some lost revenue. Natural gas prices and volumes were a bright spot because growing LNG exports and higher demand have supported prices and liquids values. Richards said CREG currently does “not anticipate any Wyoming coal going out of the Oakland export port through fiscal 2030,” so any shipments would be additive to the baseline.
Forecast uncertainty: CREG presented confidence intervals (70 percent) around major forecast lines to show the historical volatility of severance taxes, sales and use taxes, FMRs and assessed value. Richards emphasized the group's historical tendency to lean conservative: “That also means that 3 out of 10 years we're going to be outside of that dotted line,” he said, noting instances such as the COVID shock and the difficulty of forecasting realized capital gains.
Budget consequences and available funds: Richards pointed to several pots of available money that could be used by the executive and legislature. He identified roughly $88.5 million of improved all‑funds position for the biennium and flagged about $139 million remaining in a special account the Legislature had earlier attempted to eliminate by statute but which remained after a gubernatorial veto. Richards summarized that much of the current upside is likely to go to reserves unless the governor and the Legislature appropriate it.
What lawmakers asked: Committee members pressed CREG on long‑run accuracy, the mechanics and timing of reversions, and what a reduction in vehicle sales transfers means for WYDOT’s long‑term shortfall. Richards confirmed the CREG forecast had been within roughly 2–3 percent for the general fund and SFP in recent periods but warned that large errors occur when extraordinary events occur.
Bottom line: The state’s revenue picture is better than CREG projected in January, largely because of exceptional investment returns, but the outlook remains sensitive to commodity prices, vehicle sales, and the policy choices lawmakers make about transfers and reserves. Richards delivered specific options for lawmakers on the common school reserve shortfall and urged lawmakers to remember that the forecast includes a measurable degree of uncertainty.
Ending note: Richards told the panel that these figures will be incorporated into the LSO fiscal profile and that the governor’s November budget will provide the next detailed steps for appropriation decisions. “We will have an error when I'm back here visiting with you the next time,” Richards said, underscoring the need for conservative planning.
Why it matters: Richards told lawmakers the general fund and the budget reserve account were about $71.9 million ahead of the January forecast and that, when the general fund, budget reserve and Legislative Stabilization Reserve Account (LSRA) are treated collectively, the biennium outlook is about $88.5 million stronger than previously projected. That extra room comes mainly from unexpectedly large investment returns and from agency reversions — unused appropriations that revert to the state.
Major details: Richards said investment income for the state reached approximately $1.86 billion this year, a record that, by constitutional and statutory rules, required significant deposits to the School Foundation Program (SFP). He laid out two remedies to a $70.3 million shortfall in a longstanding “fund swap” intended to move federal mineral royalty receipts into the Common School Permanent Land Fund reserve: transfer available SFP reserve dollars into the reserve account or direct fiscal‑year 2027–28 federal mineral royalties (FMRs) to make up the shortfall. “You could transfer money from the school foundation reserve account where there's $88 million,” Richards said, or you could direct 27–28 FMRs to the reserve account.
CREG revised several near‑term assumptions: oil prices were lowered by $10–$15 per barrel from the January baseline, and CREG trimmed projected sales and use tax receipts — the first year‑over‑year decline in about five years — citing weakness in mining, construction and large industrial trade while retail and lodging remained relatively strong. CREG also incorporated the statutory transfer of motor vehicle sales/use tax revenue to the Wyoming Department of Transportation and reduced the expected transfer for the coming year from about $69.2 million to $62.0 million because vehicle purchases have softened.
School Foundation Program: The SFP is roughly $72.4 million ahead of the January forecast, Richards said, driven largely by investment earnings and about $26.0 million in reversions tied to capital projects that came in under budget. He cautioned that higher local property tax receipts and other formula components reduced forecasted payments to districts by about $79.5 million over the biennium, which alters near‑term pressure on the LSRA but does not eliminate future risks.
Coal, gas and other commodity outlooks: Richards described a mixed commodity picture. CREG lowered coal federal mineral royalty estimates in light of the recent royalty‑rate change but noted modest production increases could mitigate some lost revenue. Natural gas prices and volumes were a bright spot because growing LNG exports and higher demand have supported prices and liquids values. Richards said CREG currently does “not anticipate any Wyoming coal going out of the Oakland export port through fiscal 2030,” so any shipments would be additive to the baseline.
Forecast uncertainty: CREG presented confidence intervals (70 percent) around major forecast lines to show the historical volatility of severance taxes, sales and use taxes, FMRs and assessed value. Richards emphasized the group's historical tendency to lean conservative: “That also means that 3 out of 10 years we're going to be outside of that dotted line,” he said, noting instances such as the COVID shock and the difficulty of forecasting realized capital gains.
Budget consequences and available funds: Richards pointed to several pots of available money that could be used by the executive and legislature. He identified roughly $88.5 million of improved all‑funds position for the biennium and flagged about $139 million remaining in a special account the Legislature had earlier attempted to eliminate by statute but which remained after a gubernatorial veto. Richards summarized that much of the current upside is likely to go to reserves unless the governor and the Legislature appropriate it.
What lawmakers asked: Committee members pressed CREG on long‑run accuracy, the mechanics and timing of reversions, and what a reduction in vehicle sales transfers means for WYDOT’s long‑term shortfall. Richards confirmed the CREG forecast had been within roughly 2–3 percent for the general fund and SFP in recent periods but warned that large errors occur when extraordinary events occur.
Bottom line: The state’s revenue picture is better than CREG projected in January, largely because of exceptional investment returns, but the outlook remains sensitive to commodity prices, vehicle sales, and the policy choices lawmakers make about transfers and reserves. Richards delivered specific options for lawmakers on the common school reserve shortfall and urged lawmakers to remember that the forecast includes a measurable degree of uncertainty.
Ending note: Richards told the panel that these figures will be incorporated into the LSO fiscal profile and that the governor’s November budget will provide the next detailed steps for appropriation decisions. “We will have an error when I'm back here visiting with you the next time,” Richards said, underscoring the need for conservative planning.
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