Wyoming revenue outlook improved by record investment earnings but oil, vehicle sales and coal changes temper forecasts
October 31, 2025 | Appropriations, Joint & Standing, Committees, Legislative, Wyoming
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The Legislative Service Office 27s revenue forecast to the House Appropriations Committee on Oct. 2025 showed the state finished fiscal 2025 ahead of the January consensus forecast, largely because of record investment returns.
Don Richards, principal author of the LSO profile and presenter to the committee, said the fiscal year "exceeded the revenue collections as compared to the January CREG forecast," while also noting that some major streams came in below expectations, including sales and use taxes and state royalties. Richards is staff to the Consensus Revenue Estimating Group (CREG) and led the presentation to the committee.
The committee heard that the general fund and budget reserve account together are about $71.9 million ahead of the January projection for the fiscal year, and that the School Foundation Program (SFP) is $72.4 million above forecast, much of that driven by investment earnings. Richards told the committee that investment returns reached record levels this year and that "this is the first year ever that the investment earnings on the PMTF exceeded sales and use taxes deposited into the general fund." (00:32:23)
Why it matters
The meeting highlighted how volatile commodity and tax receipts can be and how investment performance now makes up a larger share of the state's near‑term resources. Richards cautioned the committee that CREG maintains a conservative, slightly downside‑biased forecast and uses a 70% confidence interval to illustrate historical error bands. That means occasional large forecast errors are expected and budgeting must account for that risk.
Key details
- Investment income: LSO reported unusually high investment earnings (record levels) across reserve accounts; those returns materially improved the near‑term balances available to the Legislature and governor.
- FY2025 variance: General fund and budget reserve receipts collectively exceeded the January estimate by roughly $71.9 million; SFP posted a similar variance of about $72.4 million.
- Reversions: About $9.4 million in reversion (unspent appropriations returning to the state) was noted; roughly half stems from the Wyoming Community College Commission, largely because vacant positions carry unspent employee group insurance lines back to the state.
- Vehicle sales tax transfer: A statutory change that directs certain vehicle sales/use taxes to the Wyoming Department of Transportation (WYDOT) remains in force; weaker vehicle purchases lowered the anticipated transfer from about $69.2 million to $62.0 million for the next fiscal year.
- Coal royalties and production: CREG incorporated the recent royalty cut for coal into the forecast and modeled two approaches (volume constant vs. increased production); reduction estimates ranged roughly $36M–$65M in near‑term effects depending on production assumptions.
- Natural gas and LNG: LSO highlighted natural gas prices and exports (LNG) as a bright spot and cited increased liquids (NGL) content in Wyoming production as a price support.
- Other revenues: Corporate filing fees and other non‑mineral filing fees have grown substantially over the last six years (LSO reported LLC filing fees roughly $4.1M in FY19 to about $21M in FY25), adding to a more diversified revenue base.
LCONFIDENCE AND RISKS
Richards repeatedly emphasized the volatility of several sources (commodities, realized capital gains and trona prices) and presented Appendix A charts showing CREG 27s 70% confidence intervals; he noted the group deliberately avoids forecasting realized capital gains and that the forecast has historically been within 2–3% for general fund and SFP in many periods but can miss materially in crises (for example, the COVID shock of 2020). (00:12:36)
What the committee asked for next
Members pressed LSO on measures to target volatility (confidence intervals, composition of reserves, and the effect of statutory transfers) and asked for follow‑up details about the composition of reversions, the assumptions behind coal scenarios, and the limits of using one‑time investment gains for ongoing expenses. LSO said those follow‑up details are available in the written report and appendices and will be incorporated into the fiscal profile distributed to the panel.
Ending note
CREG 27s presentation framed the state 27s current position as stronger than January 27s outlook primarily because of investment performance, but stressed that structural revenue trends (lower oil prices, softness in vehicle sales and coal royalty changes) and forecast uncertainty counsel caution in any durable increase to recurring commitments.
Don Richards, principal author of the LSO profile and presenter to the committee, said the fiscal year "exceeded the revenue collections as compared to the January CREG forecast," while also noting that some major streams came in below expectations, including sales and use taxes and state royalties. Richards is staff to the Consensus Revenue Estimating Group (CREG) and led the presentation to the committee.
The committee heard that the general fund and budget reserve account together are about $71.9 million ahead of the January projection for the fiscal year, and that the School Foundation Program (SFP) is $72.4 million above forecast, much of that driven by investment earnings. Richards told the committee that investment returns reached record levels this year and that "this is the first year ever that the investment earnings on the PMTF exceeded sales and use taxes deposited into the general fund." (00:32:23)
Why it matters
The meeting highlighted how volatile commodity and tax receipts can be and how investment performance now makes up a larger share of the state's near‑term resources. Richards cautioned the committee that CREG maintains a conservative, slightly downside‑biased forecast and uses a 70% confidence interval to illustrate historical error bands. That means occasional large forecast errors are expected and budgeting must account for that risk.
Key details
- Investment income: LSO reported unusually high investment earnings (record levels) across reserve accounts; those returns materially improved the near‑term balances available to the Legislature and governor.
- FY2025 variance: General fund and budget reserve receipts collectively exceeded the January estimate by roughly $71.9 million; SFP posted a similar variance of about $72.4 million.
- Reversions: About $9.4 million in reversion (unspent appropriations returning to the state) was noted; roughly half stems from the Wyoming Community College Commission, largely because vacant positions carry unspent employee group insurance lines back to the state.
- Vehicle sales tax transfer: A statutory change that directs certain vehicle sales/use taxes to the Wyoming Department of Transportation (WYDOT) remains in force; weaker vehicle purchases lowered the anticipated transfer from about $69.2 million to $62.0 million for the next fiscal year.
- Coal royalties and production: CREG incorporated the recent royalty cut for coal into the forecast and modeled two approaches (volume constant vs. increased production); reduction estimates ranged roughly $36M–$65M in near‑term effects depending on production assumptions.
- Natural gas and LNG: LSO highlighted natural gas prices and exports (LNG) as a bright spot and cited increased liquids (NGL) content in Wyoming production as a price support.
- Other revenues: Corporate filing fees and other non‑mineral filing fees have grown substantially over the last six years (LSO reported LLC filing fees roughly $4.1M in FY19 to about $21M in FY25), adding to a more diversified revenue base.
LCONFIDENCE AND RISKS
Richards repeatedly emphasized the volatility of several sources (commodities, realized capital gains and trona prices) and presented Appendix A charts showing CREG 27s 70% confidence intervals; he noted the group deliberately avoids forecasting realized capital gains and that the forecast has historically been within 2–3% for general fund and SFP in many periods but can miss materially in crises (for example, the COVID shock of 2020). (00:12:36)
What the committee asked for next
Members pressed LSO on measures to target volatility (confidence intervals, composition of reserves, and the effect of statutory transfers) and asked for follow‑up details about the composition of reversions, the assumptions behind coal scenarios, and the limits of using one‑time investment gains for ongoing expenses. LSO said those follow‑up details are available in the written report and appendices and will be incorporated into the fiscal profile distributed to the panel.
Ending note
CREG 27s presentation framed the state 27s current position as stronger than January 27s outlook primarily because of investment performance, but stressed that structural revenue trends (lower oil prices, softness in vehicle sales and coal royalty changes) and forecast uncertainty counsel caution in any durable increase to recurring commitments.
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