Riding the Wyoming 'brand'

  • "The Spirit of Wyoming": ...and the capitol dome in Cheyenne

    Kevin Poch photo
  • DON'T BUCK THE SYSTEM: Vivian Watkins

    Craig Pindell photo
  • Cartoon: Kyoots

    E.G. Vlastos
  • Jim Geringer, governor

  • Robert Grieve

    Lifestyle Photography
  • Bruce Hinchey

    Lifestyle Photography
  • Eli Bebout

    Lifestyle Photography
  • John Hines

    Lifestyle Photography
  • The Hitching Post does business with politicians and lobbyists

    Margaret Laybourn
 

Editor's note: A year ago, High Country News carried a lead article by Wyoming journalist Paul Krza (pronounced Cur-zay) titled, "While the New West booms, Wyoming mines, drills ... and languishes." The theme of his story was that an alliance between the state's ranchers and minerals-energy industry had turned Wyoming into a low-tax, low-wage, anti-environmental state. Krza's piece was followed by similar articles in The Wall Street Journal, The Denver Post and the Philadelphia Inquirer. In fact, Krza says, even the Wyoming media is beginning to report on the state's plight.

Now Krza is back. He spent a long winter at the 1998 Wyoming Legislature in Cheyenne, and his report below shows how sausage is made in the Cowboy State.

 A sidebar article titled "Democrats struggle to regain a foothold" accompanies this feature story.

Meet Vivian Watkins, who knows when to keep quiet. So quiet, she's unknown to most folks in Wyoming, even though her job concerns the most high-profile issue in the state: economic development. Watkins may be an unknown, but when it comes to 1990s Wyoming politics, she is more symbolic than the state's trademark cowboy riding a bucking bronc.

Watkins was president of a small bank in central Wyoming in 1994, when she was called to Cheyenne to take over the state's development agency under newly elected Republican Gov. Jim Geringer. Four years later, she is about to become jobless, essentially tossed overboard by Geringer, her agency discredited and replaced by the new Wyoming Business Council, a corporate-style, business-dominated board.

It took a year to create the new council. During that time, nobody - including members of the Republican-dominated Legislature, who rushed to embrace it - asked, "Could the same thing be accomplished by adequately funding Watkins' public agency?" You bet, Watkins told me after the legislative special session in March. But she kept quiet, not wanting to buck the system.

"In Wyoming, there's a saying that "you ride with the brand," "''''she said.

It's how Wyoming operates. The political "brand" is Republican and rural, in league with big industry. If you aren't part of it, you keep quiet or leave. Wyoming is like the isolated little island off Croatia I visited last summer. It is called Susak, and it is known, as a tourist brochure delicately put it, for its "very unusual folkways." Translation: inbreeding.

In Wyoming, the incest is political. A small group of insiders has built a network of relationships into political power. They decide whom to tax and where to spend the revenue. Insider natives are idolized - the "nativity yardstick," a former legislator calls it - and outsider views are discouraged. Disagree and you're a dissident or even a communist.

At a recent meeting in Casper, rural wise-users called the Wyoming Outdoor Council, "the domestic enemy." It's as if nothing has changed since rancher-biologist Tom Bell founded the Wyoming Outdoor Council 30 years ago, to combat the killing of wildlife, the fencing of public range and wholesale drilling and mining.

Why is Wyoming stuck in place?

Watkins provides an example. Rather than fight for her job and for the jobs of the men and women who work for her, she kept quiet, figuring that even a raw deal in Wyoming is better than a good deal anywhere else.

She symbolizes Wyoming's unique mix of apathy and arrogance. In a state offering lots of activities in an unpopulated landscape, many people would rather be outdoors than be inside politics. Watkins' job disappears in July, but she's staying in Wyoming. "I would not leave our wonderful state for anything ... the outback country, the clear blue skies ... I wouldn't trade that for anything."

It also helps that the mineral industry pays more than 60 percent of the taxes. And that the state Constitution specifically prohibits an income tax.

But residents' contentment has consequences. Over the years, the power clique's decisions have created a low-wage, no-growth state that starves public education, social welfare, the environment and culture. Until a decade ago, Wyoming was lost in a crowd of similar Western states.

Now it stands out because it's surrounded on three sides by states that are part of the booming New West.

Wyoming's economic and social crash is stark: The state's per capita income - 35th in the country - is $3,000 below the national average, job growth is nonexistent, and it's dead last, even behind Puerto Rico, in technology-related jobs. Older people are the fastest-growing age group in Wyoming, a clear sign that educated youth are fleeing the state.

But the pain isn't distributed evenly; the Wyoming system is adept at taking care of its own. Industry is protected from environmental pressures and rising taxes and it gets to hire from a nonunionized pool of workers.

Ranchers who are part of the political system get below-cost grazing leases on state land and, until recently, some got to buy up that land at bargain-basement prices. They, too, are protected by the state from environmental pressures brought by the federal government or environmental groups.

Perks abound. Ranchers and industry buy their fuel tax-free. Everyone else pays very low gasoline taxes. If you drink or smoke, your habits are barely taxed, although the health costs and drunk-driving accidents cost Wyoming as much as in the neighboring states.

Everyone, including the state's many tourists and cross-country truckers, drives on roads they don't pay for. Wyoming's fuel tax in 1976 was only seven cents per gallon. In 22 years, the fuel tax has increased by only one cent. Fuel taxes in neighboring states average about three times as much. Rather than tax highway users, the state diverts millions of mineral severance tax dollars and mineral royalties to road construction.

The state's 12-cents-per-pack cigarette tax is the sixth lowest in the nation - only the tobacco-growing states are lower. Neighboring Colorado charges 28 cents in tax for a pack of cigarettes, while Utah imposes a 51-cents-per-pack tax. As a result, one of Wyoming's stronger economies is border convenience stores, where people from Colorado or Montana or Utah or Nebraska come to fill their tanks with lightly taxed gasoline or diesel fuel and haul home cartons of cigarettes. Alcohol is also minimally taxed in Wyoming - there's only a nickel tax on a case of beer, for example.

Money that could have been generated by systematic fuel, alcohol and tobacco tax hikes over the years, then spent on education and social needs, has instead subsidized users of the products.

Life under the GOP "big tent'

This mix of low taxes and lower services is the result of a long-term juggling act, which is now overseen exclusively by the Republican Party but was a bipartisan affair until the once-strong Democratic party began shriveling over the past decade or so.

The Democrats' misfortunes are in part connected to the national failings of the party. But the fact that the usual Democratic constituencies are weak here also contributes. Environmental groups are few and perpetually on the defensive, their agendas consisting of reactions to moves made by the state's ranchers and minerals industry.

The Wyoming Outdoor Council's Tom Throop says WOC puts most of its time and money into the agencies and courts, battling to change federal and state land-use decisions. At the Legislature, WOC allies itself with organized labor, but the labor voice in Wyoming has been largely silenced by fat paychecks to workers in the non-union coal mining industry in the Powder River Basin. Unions and their politics once dominated Wyoming's southern tier along the Union Pacific Railroad line and its underground coal mines. But most of these once-unionized jobs have disappeared.

This weak coalition must go up against an all-powerful Republican Party, a party that doesn't depend on a high-profile political leader, the way the Democrats counted on the late three-term governor, Ed Herschler. The GOP influence is institutionalized, especially in the influential Wyoming Heritage Society, whose members generally like industrial development, hate federal regulations and are suspicious of the press.

The Heritage Society fills a void created by long distances and lack of statewide media. It brings people together from around the 97,000-square-mile state. Unlike most of Wyoming's 450,000 residents, the 1,500 members of the Heritage Society are united by a flow of information and yearly forums that allow them to think about the state as a whole. It's a place to network and build relationships and draft legislation, all based on common information and shared values. Most of the state GOP hierarchy are members, including Geringer who is an "ex officio" member of the "steering committee." Even the director of the state AFL-CIO, John Faunce, joined the anti-union Heritage Society and serves on its steering committee.

"I thought I was better off on the inside than the outside," he told me.

Because the Wyoming GOP is so dominant, the struggle to change Wyoming takes place inside the Republican Party and its "big tent." But not all Republicans are happy with the right-wing tilt of the party hierarchy, and particularly with Geringer, who was the first Republican governor elected in two decades in Wyoming.

"Governor Morality," some detractors now call Geringer. Earlier this year, he boycotted a National Governors' Association breakfast meeting with President Clinton because he was "disgusted" with Clinton. GOP State Chairman Wally Ulrich says Geringer has brought the state back to its "conservative values."

The highest-profile clashes under the big GOP tent have been at State Land Board meetings between state auditor Dave Ferrari and Geringer over state-lands management. Ferrari has opposed low-cost leasing fees for state lands, saying the breaks subsidize agriculture. The state's 3.6 million acres net an average of less than $1 an acre per year in leasing fees, while neighboring states get two or three times as much, Ferrari says. But Geringer and the system have different priorities. They say it's more important to "stabilize" livestock interests than to get a higher return from the state lands. What income there is from these lands goes to education.

Ferrari, who has served as the state's elected, full-time auditor for eight years, also irritates many mainline Republicans by using his position to push for strong public official ethics and lobbyist disclosure laws. In Wyoming, suggesting that rules are needed to enforce ethical behavior is almost unpatriotic. In late 1997, Ferrari joined Republican moderates and good government advocates backing a ballot initiative on ethics.

Ferrari is a soft-spoken, low-key person, who doesn't come across as the kind of politician who would back such an emotionally charged issue. Nevertheless, he has worked hard for an initiative that would change everything about how the business of Wyoming is conducted. It would do this by making it impossible, or at least illegal, for the present mix of elected officials, industrial companies and lobbyists to maintain the state's present, delicately balanced approach to taxes and expenditures.

"Those relationships ought to be disclosed, so the people of Wyoming know who's influencing the decisions - who's taking them to the ballgames, putting on the receptions and spending big bucks." Without an ethics law, he says, "it's all perfectly legal. It's OK to wine and dine public officials."

In Ferrari's view, he is attacking a legislative system that makes it difficult if not impossible for the public interest to rise above the special interests. But that's not the conservative, rural-Republican view of what the ethics initiative would do.

"It's a threat to the uniqueness, the way the Legislature operates," says Rep. Jim Hageman, a longtime Republican legislator and Geringer's neighbor. "We have a system where everybody gets together every night, and we sit and talk and visit. They buy you drinks, but they don't lobby you. It's not political."

Reaching for more revenue

Besides ethics, Wyoming also fights over who will pay the tax bill. You could hear more ripping and poles creaking under the GOP big tent when a Republican, state Sen. Tom Kinnison, began stirring things up from his perch as a co-chairman of the Legislature's powerful Joint Appropriations Committee.

For 16 years, Kinnison has represented Sheridan County in northern Wyoming. His district lies just outside the revenue-producing coal fields of the Powder River Basin, which means two things: His school districts are underfunded, and he is not controlled by coal companies.

Kinnison is one of a handful of legislators who avoids lobbyists and their hangout at the Hitching Post motel. Too many parties, too many distractions, and too many mineral lobbyists, he says. He lives former President Harry Truman's dictum that a politician's only friend is his dog, spending part of his legislative lunch hour not with lobbyists, but with Abby, his rottweiler.

He's a fiscal conservative who insists that if the state needs money to pay for such needs as increased education funding, it should come from the mineral industry. He scoffs at a Geringer-initiated study aimed at revamping the state's tax system called "Tax 2000." It's going to be "Shaft 2000," he says. He predicts it will push the tax burden onto individual citizens, who already earn $85 per week less than the residents of other states.

Kinnison, a businessman, is respected because of his strong grasp of state finances and his political savvy. But he makes a lot of Republicans nervous. They fear that his taxing views will erode GOP solidarity, which is based, in the end, on an alliance between industry and ranchers.

Is this the year?

For a variety of reasons, the 1998 Legislature seemed like the time when Wyoming's politics might change - the year the Legislature would have to confront the state's quasi-private way of conducting Wyoming's public business. The big threat came from the courts. The Wyoming Supreme Court had ruled that Wyoming's schools were unfairly funded, and that some school systems were deprived of adequate funds. Schools are not the only underfunded part of Wyoming's social and welfare system. But they're the part that activists had convinced the court to deal with.

A second set of pressures on the 1998 legislative session came from the press. Reporters from the Wall Street Journal and Philadelphia Inquirer wrote stories about Wyoming's "black hole" economy amidst a regional and national boom. Things were getting so bad that Wyoming's media began to report on the state's plight.

Critics of the way Wyoming operates hoped that this combination - the ethics initiative, the need to fund education and the state's embarrassment over its economic failings - would create pressure for change.

Hangin' out at 'the Hitch'

Wyoming may be the only state whose capitol is a motel. The big, gold-domed building in downtown Cheyenne is supposed to be the seat of state government, but everybody who's anybody, including most legislators, do most of the state's work up the street, at the Hitching Post Motel.

"The Hitch" is a combination home-away-from-home and neighborhood bar. It's where the lobbyists hang out, hold "receptions' and take lawmakers to dinner. It's where bills are drafted and amendments are crafted - where private interests leverage the public interest.

Even before the Hitch fills up with legislators in early January, the mineral lobbyists have been at work. The oil and gas industry cranks up its television and radio campaign, warning that the petro-well is running dry and more tax breaks are needed. The coal companies make the rounds, hosting lavish expense-paid "coal information dinners' for legislators around the state.

"It's the only time I get to eat the appetizers," quips Rep. Louise Ryckman, the House Democratic Minority Leader.

Wyoming keeps its legislative sessions short. The "long" general session, held in odd-numbered years, is eight weeks. In even years, legislators meet for four weeks to craft a budget. This year, a hybrid "special" session was held - one additional week was tacked on to the budget term to deal with financing. This time, it was not just the mineral interests who worked the public before the session.

Those pushing the ethics initiative had been on the streets since Christmas, and they had reason to be optimistic. A Heritage Society poll showed that 70 percent of Wyomingites wanted an ethics law. It was a hot topic on radio talk shows around the state. So the Republican leadership decided to head the initiative off at the pass. House Speaker Rep. Bruce Hinchey and Senate President Bob Grieve introduced an ethics bill that left it up to officials and governmental bodies to police themselves.

Hinchey's attitude toward ethics is illustrated in an incident that took place during this session. The Casper Republican is married to the daughter of longtime and influential oil and gas lobbyist Rick Robitaille. Hinchey's father-in-law is not just any lobbyist. He heads the Petroleum Association of Wyoming.

During the session, I watched as Wyoming television journalist Bob Geha questioned Hinchey, asking if there was a conflict of interest in his vote for an oil and gas industry tax break. Nope, Hinchey said; he never talked to his father-in-law about such things. And presumably he was unaware of which way his father-in-law would like him to vote. The following day, an indignant Robitaille assailed Geha, calling the question a "cheap shot." The reporter was taken aback, saying it seemed perfectly legitimate.

Second in command in the House is Majority Leader Rep. Eli Bebout, a Democrat-turned-Republican, a driller, a developer and the current president of the Wyoming Heritage Society. A few years back, he was involved in a failed effort to place spent nuclear plant fuel rods in Wyoming.

If he were to recuse himself on all his potential conflicts of interest, he would miss a bunch of votes.

Once again, the odds were stacked against reform. Nevertheless, a relatively strong ethics and lobbyist disclosure package managed to stay alive for most of the session. But in its last days, at one key committee meeting, Robitaille and coal lobbyist and former legislator Kelly Mader sat down at the table with sympathetic committee members to weaken the bill.

Sure, lobbyists spend "thousands," Robitaille told me later, but on accommodations, not legislators. In his trademark sarcastic tone, he ridiculed the need for disclosure: "I have three motel rooms down here. Does this make me three times more effective?"

Geringer calls for "reasonableness to public disclosure," because Wyoming is "a thinly populated state." There's only so many people to go around, so you have to expect conflicts, that argument suggests. Besides, nobody is really doing anything wrong. That's the Wyoming Way of thinking that explains why legislators finally approved the Hinchey-Grieve package and called it good.

"Nothing's really changed," says Wyoming Public Radio News Director Bob Beck, who spends a lot of time covering the Legislature. "It's a stupid bill. They passed it to shut people up."

Greasing the economic skids

A tough ethics bill may have died swiftly, but not as fast as the new economic development council was moving on the legislative highway.

The plan for a business council was a legislative high-speed chase, with the vehicle powered by the Heritage Society and piloted by Bill Schilling, the society's executive director and chief lobbyist. The Heritage Society membership, which many say controls the state economy, initially downplayed the evidence of decline and the need for change, slamming the media for reporting "bad" economic news.

Now Schilling was saying that quick action was needed to rescue Wyoming's "crummy" economy.

No one called the Heritage Society on its about-face. Nobody wanted to wreck the bill for fear of being portrayed as against economic development. Instead, the Left - or what passes for it in Wyoming - tried to pencil in labor and education seats on the economic development council's "board of directors." The Right, primarily Republicans in the wise-use movement, tried to get the council to review federal resource development documents. In the end, the bill passed as it had come out of the Heritage Society.

The origin of the law reveals a lot about how Wyoming operates. Work on the law had begun a year ago, with a closed-door "retreat" of a group of mostly like-minded business people. For the most part, the process that led to the business council took place out of public sight.

State and local newspapers mostly ignored the advisory group meetings, and in the final stages of development, the advisory committee met without public notice to hammer out the details before turning it over to the legislative committee. Once it had released its plan, the committee launched an offensive to discredit the existing state agency without also smearing Geringer.

The committee said Watkins' agency just wasn't doing the job, the state's development efforts were "fragmented" and the people "who create the jobs' should take over instead. There was no counterattack, either from Watkins or from the head of state government - Geringer.

In the end, the Heritage Society and Geringer spun the issue around. Instead of being perceived as responsible for the state's failure to thrive, they had put themselves at the head of the reform effort.

When Geringer announced his re-election plans this April, he took credit for the Business Council and its "bold action" to revive the economy.

Not surprisingly, when the newly appointed council met for the first time in late April, its first action - to decide where to put its central office - was done by secret ballot.

Who knows what's ahead on Wyoming's economic-development highway? That road has been littered with million-dollar wrecks - everything from loans for gizmos like mechanical steers for roping practice to the big Char-Fuels "clean coal" boondoggle, in which the state lost $20 million (HCN, 7/7/97).

Taxes: lost in House-cleaning

Ethics has to do with how state government makes decisions. And the economic development bill was pure politics. Taxes have an unavoidable reality that makes lawmakers sweat, and nowhere more heavily than in Wyoming. The state has been dodging fiscal crises for years.

But no miracle was in sight this time, and legislators were going to have to bite some sort of bullet. The key chamber was the House, where revenue bills must originate. It's also the place where the mineral-connected leadership decides the fates of tax measures, which usually live and die along party lines. By contrast, the smaller Senate chamber is more individualistic. In the Senate, strong arguments sometimes can carry the day, something that rarely happens among the more numerous House membership.

Of all the tax bills introduced this year, four got the required two-thirds vote to stay alive. One was a proposed five-cent hike in the state's gasoline and diesel tax to fund highway improvements. The extra nickel would still keep the state's tax among the lowest in the nation, but it was something.

Another bill called for a tobacco-tax increase. The final tax plans were more general. One was a two-mill statewide tax on property and the other, a half-cent sales-tax hike. Industry backed the sales tax as "broad-based." They knew some sort of increase was needed, and a sales tax would hit them more lightly than the proposed property-tax increase.

Hinchey and Bebout quickly dispatched all the bills except the gas-tax proposal to the House Revenue Committee, headed by Rep. John Hines, a rancher-Republican sympathetic to his Powder River Basin coal-mining company constituents.

Hines went through the motions - he called a hearing on the tax bills, in the largest legislative hearing room. Tobacco lawyers in $500 suits, the guys from the coal and trona lobby, students armed with cigarette ads aimed at youths, a couple of doctors, a few merchants and even the Sierra Club showed up.

But the committee did not publicly discuss the tax proposals. In fact, nothing happened until a couple days later, when Hines' committee met again, this time in a tiny room barely large enough for the members.

Sandwiched between a couple of portly committee members and a window, I watched as Hines said there was just no need to talk about the taxes since all the arguments had been heard. A television camera rolled and lobbyists from the earlier hearing lined the walls and spilled into the halls as the committee members quickly voted to approve a sales tax and kill the tobacco- and property-tax proposals.

It was an anti-climax - everyone knew which special interests had prevailed at the Hitch. Smokers and the minerals and energy industry were safe for another year. The tax they didn't like was buried, alongside earlier casualties like a proposed hike in the trona severance tax and a tax on exported electricity.

"This is the best committee bought and paid for by industry," said dismayed but not surprised minority Democrat committee member Ryckman after the meeting.

Fill "er up "for the kids'

Still, a couple of legislative surprises were in store. In the House, a member added to the sales-tax bill an amendment that slapped a big hike on previously sales-tax-exempt cigarettes and smokeless tobacco. The bill cleared the House, but with tobacco attached, it was headed for peril. In his office one floor below the legislative chambers, Geringer, who backed the sales tax, worked frantically to get supporters in the Senate. He wasn't happy about the tobacco tax, but he preferred a sales tax to the property tax.

For the same reason, fiscal conservative Sen. Kinnison was against the sales tax. With or without the tobacco tax, he saw it as letting industry off the hook.

Kinnison managed to convince the independent-minded Senate to kill it. "We had 15 votes (half the Senate) and were working on two more when the Senate pulled that stunt," a dismayed Geringer said later. Kinnison scored an even bigger coup when the five-cent gas tax hike bill passed the House and came to the Senate.

The gas tax was proving to be politically popular because out-of-state tourists and truckers would pay for about 40 percent of it.

"It's taxing the Wyoming Way," Casper Rep. Rick Tempest told the House. "Let other people pay for it." In the big, wide-open spaces of Wyoming, highways are a big deal.

Kinnison had other plans. He wanted to tack two more cents onto the five-cent fuel-tax bill, and earmark the money for education. Moreover, he wanted to remove the exemptions currently enjoyed by industry and ranchers. Under Kinnison's bill, they would pay the same fuel tax as everyone else.

With the budget ballooning and reserves dwindling, the bill passed, narrowly, in the Senate. But the House was wary; somebody they didn't like from the Senate - Kinnison, not exactly a party favorite - had mucked up one of their perfectly fine bills, and they were not happy. Yet they were also increasingly nervous about running short of funds. And the only tax vehicle around was Kinnison's two cents.

In the end, there was a compromise between the two chambers. Kinnison's extra two cents were stripped off, and two of the remaining five cents were diverted, although for only two years, to education. And ranchers and industry would not be exempt.

 

Kinnison had won, but it was a small victory. The industrial folks took the hit quietly, figuring they were still way ahead.

Banking the fires of change

Each session they change the pictures that hang inside the Senate chambers and outside in the lobby. This year "Burning the KC ranch" went up. It shows a heavily armed Wyoming settler firing at somebody who just torched his cabin.

It's an apt analogy for the state, where the fires of neglect, apathy and good-old-boy, business-as-usual politics have ignited a financial and moral crisis. Legislators this year tossed a couple of buckets of revenue into the fires and put a tattered blanket of good-government laws over the flames. Meanwhile, the fires continue to smolder.

Ferrari, who has been involved in state government for more than 25 years, warns that a "financial crisis' is coming.

"We passed up opportunities to address it years ago," he said. "When you've got the kind of special-interest influence we have," he said, "you're not going to address it until you absolutely have to." Ferrari abandoned any plans to challenge Geringer, and now says he won't even run again for auditor.

Wyoming Democrats plan to field candidates to challenge the Republicans, but they lack money, organization, leadership and name recognition - all daunting obstacles when you are outnumbered and maybe demoralized.

Barring unforeseen developments, Wyoming will continue as a strongly Republican state, run out of the Heritage Society and the Hitch, until outside forces destroy the present arrangement. No one can predict when that will happen.

As the establishment showed in this last legislative session, it has the organization and the discipline to keep the system patched together. But the establishment can't deal with the underlying problems. It can't undertake real economic development because that would require strengthening education and reforming taxation. In fact, it wasn't even able to fix the funding gap in education that a court ordered it to fix.

The gas-tax increase is good for only one budget cycle; next year, the legislators will be struggling with the same problem.

As a boom-and-bust state, Wyoming is accustomed to living from year to year, but its future is draining away, as young people vote with their feet. Even Ferrari is talking about leaving, discouraged by his inability to implement accountability in face of the overwhelming opposition from entrenched interests.

Kinnison is staying, but he isn't optimistic.

"I think it's going to get worse before it gets better. Something blatant is going to happen. It might take years ... something so blatant - maybe corruption, or the sheer arrogance of the tax shift - before it's going to turn around."

This article is part of a High Country News series on the West's politics, supported by grants from the Wyss Foundation, the Ruth Mott Fund and the Henry P. Kendall Foundation.