Committee backs redirecting 1% severance tax share to highway fund to address road shortfalls
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Summary
Bill draft 25LSO0258 would move a statutory 1% severance-tax distribution into the highway fund beginning FY2026; Representative Obermueller presented a fiscal model that would lower permanent fund shares while increasing highway funding; WYDOT and contractors urged the change to address a multi-hundred-million-dollar shortfall and inflation-driven construction costs; committee voted 13-1 to advance.
Representative Obermueller presented bill draft 25LSO0258 to reallocate the statutory 1% severance tax distribution to the highway fund beginning in fiscal year 2026. He showed a fiscal model estimating the proposal would shift the permanent funds' statutory share downward and increase the highway fund to about 17% of total severance distributions in the modeled year.
Why proponents support it: Obermueller and WYDOT officials argued Wyoming—s roads face sustained maintenance and capacity shortfalls exacerbated by construction-cost inflation and flat state-side revenues. WYDOT Director Darren Westby and CFO Dennis Byrne described an annual shortfall north of $400 million covering roads, operations and facilities; both warned federal funding reliance and future federal formula risk make state revenue more important.
Contractors and public testimony: Kelly Little of the Associated General Contractors urged committee sponsorship, citing high construction-cost inflation and public-safety impacts of deteriorating roads; the association presented crash-cost estimates and inflation indices.
Committee vote and context: After technical discussion, the committee voted 13-1 to sponsor the bill draft. Members who opposed raised concerns about permanent-fund priorities and long-term investment strategy. Supporters argued redirecting a modest statutory share now would enable both preservation and targeted growth projects.
What happens next: The bill draft will advance as a committee-sponsored draft and proceed through the legislative process. Implementation details, effects on the permanent funds and long-term fiscal policy will be revisited during budget and committee hearings.