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Report: COVID Stimulus Could Soften Wyoming Budget Shortfall

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States dependent on tourism and energy production revenues have been disproportionately impacted by economic fallout from COVID-19. (Roger Sylvia/Wikimedia Commons)
States dependent on tourism and energy production revenues have been disproportionately impacted by economic fallout from COVID-19. (Roger Sylvia/Wikimedia Commons)
 By Eric Galatas, Public News Service - WY - Producer, Contact
March 2, 2021

CHEYENNE, Wyo. -- Wyoming and other states facing steep budget shortfalls could bounce back as early as next year if the federal government invests big in COVID recovery, according to new analysis by the Economic Policy Institute.

President Joe Biden's plan includes sending money to states and local governments, funding vaccine distribution, supporting small businesses, expanding child tax credits and $1,400 checks for qualifying workers.

Josh Bivens, research director at the Institute, said the pandemic has hit some states harder than others.

"Two of the things that characterize states with particularly big problems are if they are dependent on tourism, or if they are big energy producers," Bivens explained. "All else being equal, that tends to mean they are in a worse position, and the latter definitely describes the Wyoming economy."

Republicans, including Sen. John Barrasso, R-Wyo, have criticized Biden's $1.9 trillion stimulus package for being too big, and argue money should be more targeted to reach those who truly need assistance.

Biden's proposal is being considered by the U.S. Senate after clearing the House last week.

Bivens contended not investing big now could mean that jobs won't return for several years.

He pointed to the slow economic recovery after the Great Recession, which he attributes in large part to a lack of sufficient federal assistance to states and local governments.

"That recovery was just agonizingly slow," Bivens argued. "It took us 10 years to get back down to the low unemployment rate we had in 2007. We really want to get back to the January 2020 unemployment rate quickly, we could be there by early 2022 if we do this aid at scale."

Bivens noted two key components of Biden's COVID package are essential for quick and sustained recovery.

The plan would help state and local governments make public investments in education, roads, water treatment plants and other infrastructure.

He added the plan also allows investments to be made as needed, which he said should support economic growth for a longer stretch of time.

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