Vol. 32, No. 2, 4. Forecasting Wyoming's Financial Future.

• Author: By Buck McVeigh

Wyoming Bar Journal

2009.

Vol. 32, No. 2, 4.

Forecasting Wyoming's Financial Future

Wyoming Lawyer Issue: April, 2009 Forecasting Wyoming's Financial Future By Buck McVeigh

The Consensus Revenue Estimating Group (CREG) is the official estimating body for all revenues received by Wyoming State Government. Created in the fall of 1983 by a mutual informal agreement between the executive and legislative branches, the CREG is responsible for developing a single consensus estimate of state revenues to aid in the budgeting process. Prior to its existence, each branch developed its own independent forecast of revenues, and as you might imagine, the variance was quite dramatic at times. I serve as the Administrator of the Economic Analysis Division of the Department of Administration and Information. Along with Steve Sommers, who heads up the Budget and Fiscal Division of the Legislative Service Office, we serve as the co-chairs of CREG. Between the two of us, there lies nearly 60 years of experience in state government finance. Additional members of CREG include representatives from the State Auditor's Office, State Treasurer's Office, Department of Revenue, Department of Education, Wyoming Geological Survey, Wyoming Oil and Gas Commission, and the University of Wyoming.

The CREG produces its official forecast report in early October of each year and reconvenes after the holidays to re-evaluate its assumptions and projections. Following its January meeting, a revised report is released, reflecting any new information that could enhance the forecast. Occasionally, an unusual event or economic shock may occur that significantly impacts revenues to the state. If the situation is severe enough, the co-chairs may call for a special meeting of the CREG and, if necessary, revise the forecast.

The group doesn't claim or attempt to reach pinpoint accuracy. In fact, we know we'll likely be wrong. Rather, by using the expertise of individuals representing mineral valuation, earnings on investments, and general fund revenue sources, we try to get as close to actual as we can be, having earned a notorious reputation for being on the conservative side. Obviously, the consequences of erring on the long side of a forecast are horrendous, so we tend to be extra cautious, especially when it comes to the mineral portion of the forecast.

When it...