“Wyoming’s economic development efforts need to be focused on creating good jobs so that our youth will not have to leave the state.” Almost every Wyoming citizen and public servant has made this cry. Every citizen, politician and policy maker knows of our common desire to build a Wyoming where our children can earn a decent living to raise a family.

I am convinced that Wyoming’s government policies encourage temporary jobs filled by out-of-state folks who take our tax money and leave the state when the job is done. Not only does this policy export our tax wealth, but it has thoughtlessly eroded our citizen’s purchasing power to invest, build and prosper.

We need to moderate the state’s enormous capital construction program. That way we can make sure more Wyoming people will benefit from well-paying construction jobs for many years to come

Wyoming’s explicit economic development efforts are carried out by the Wyoming Business Council. The WBC has a 2-year Governors budget of $123 million; $95 million is for building community infrastructure and other capital facilities while $28 million is for tourism promotion and traditional economic development efforts. $28 million sounds like a lot, but it is peanuts compared to what the WBC and other state agencies have in their budget for capital construction.

Our two-year budget contains an astonishing $ 357million for building K-12 school buildings and another $125 million in construction spending budgeted for the rest of state government and the University. When you add in the $95 million in community capital construction in the WBC budget, things start to get pricey. Roll in $200 million for highways and the cash register bell rings a lucky $777 million in new capital construction money appropriated this year. But consider that this is not the whole story as it does not include the money we have previously appropriated but have not been able to spend yet because of our jammed up construction program.

Lets try to get the total picture of pent up capital construction. Last biennium’s budget has $279 million in construction projects for state facilities and another $454 million for school construction. These projects are in various stages of completion. Many have not even been started yet, others are still in design and planning and a few are completed. I did a quick look and found that 71% of the state funds for state facilities remain unencumbered. This could mean that over $500 million of the $733 million in previous appropriations has not been spent.

Adding the new and the pending projects means that the bottom line here is that we are looking at trying to spend $1.3 BILLION in capital construction.

All this unfinished and pending construction dwarfs the amount the Wyoming Business Council spends on other economic development programs and tourism promotion. So when it comes to economic development in Wyoming, virtually all of our eggs are really in the capital construction basket.

By properly choosing how, where and when we build, these construction expenditures could be used to employ the maximum number of Wyoming citizens for the longest period of time. Why then, are we spending our taxpayer’s capital construction money in a way that encourages a substantial portion of economic benefits to leave the state? In the case of the new prison, located very close to the Nebraska border, a majority of the construction economic benefits will flow to out of staters who come to Wyoming to build it and later provide a lot of the staffing for the facility. And why are we spending this money so that the greatest possible negative impacts accrue in terms of shortages and high costs imposed on the rest of the economy of Wyoming?

Of course the source of this construction boom is our fabulous new mineral wealth. This wealth has allowed us to catch up on past deferred maintenance and begin to build a wonderful new public infrastructure. K-12 school construction will be a biggie; current plans call for spending up billions (yes the word is BILLIONS) of dollars in the next few years. New school construction is required by the state’s Supreme Court, but even the court can not expect this process to happen all at once. There are emergencies that need to be addressed, but largely we are planning to replace older, but still very functional schools, with newer ones.

In fact, many local school boards and communities are dismayed with the process, wanting more time for planning and more consideration of local wishes in the capital construction decision process. The Wyoming School Facilities Commission has received a host of complaints from school boards, architects, engineers and builders – all bemoaning the pace and ridged requirements of school construction.

In other parts of state government our building boom will mean new Game and Fish facilities, a new National Guard headquarters, an I-90 welcome center, and new buildings at the University and community colleges. Some of these facilities are essential, others desirable, some are convenient and others are just pork.

Our Government-created construction boom combined with the mineral boom makes for a double whammy, contributing to labor and material shortages and high construction costs throughout the state. A note about the prison serves to illustrate a couple of drawbacks to this spending effort. Cost increases forced the legislature to add another $6.9 million in the last session to the $76 million appropriated the session before. This sounds like a lot of money, but unfortunately it is far short of the $125.6 million construction bid that we received which was 52% above the estimated cost. Telling was the fact that the only bid was from and out-of-state company.

Obviously our policies towards mineral development play a role. We are attempting to develop resources at a maximum rate in order to encourage development here and not elsewhere. But this makes for a shorter more intense construction/development period with a maximum of temporary workers. Like our experience with capital construction, labor and materials are in short supply contributing to higher development costs. For gas and oil, earlier resource development means earlier depletion. Compounding the problem for these producers is the fact that when everyone brings new resources on line at one time, take-a-way capacity becomes limited and producers must bid for pipeline capacity by accepting lower prices for their product. This causes a price differential between what resources sold in Wyoming get versus those sold elsewhere.

The booming government capital construction and mineral activities have spill-over affects in private markets. Labor and material shortages make it harder and more expensive for any economic activity. High wages can be a good thing, contributing to a more livable life for our hardworking folks. However, artificially high wages and other costs caused by temporary government expenditures, just make for a flash with no sustenance.

Our goal is to build as fast as we can. To accomplish this we are using a very high percentage of temporary workers and out-of-state contractors who will move on when the job is done. In fact few Wyoming architectural, engineering and construction firms even have the capability to bond for multiple state projects. As proposal after proposal comes across their desks, these Wyoming professionals can only wring their hands and wish that they had the time, staff, and bonding capability to do the work.

There are some things that we could do to modulate the mineral boom. We could slow down the pace of permitting, require greater spacing of wells, extra room for wildlife habitat, and more strictly enforce environmental and archeological regulations. Controversial? You bet. And most of us would not agree on whether this is the right approach or, because of the world energy situation, whether it would even work.

But the government-driven capital construction boom is fully under our control. Wouldn’t it be better to have an initially smaller, but longer term boom that provides a-long term support to Wyoming construction folks? This would allow us to home grow building trades with Wyoming people – people who want to live here for the rest of their lives and build communities as well as buildings. Now wouldn’t it be great if the folks that build all of these new schools stuck around and actually had kids who will go to school there?