Wyoming Legislature Passes Second Coal Tax Cut in Two Years, Sacrificing $20 Million Annually to Subsidize Declining Industry

Wyoming lawmakers pass House Bill 75, reducing the coal severance tax rate from 6.5% to 6%, marking the second consecutive tax cut for coal producers in two years. In 2022, the Legislature reduced the severance tax from 7% to 6.5%, together costing the state approximately $20 million in annual revenue while coal production and employment continue steep declines. The actual revenue losses exceed projections, reaching $13.3 million in fiscal year 2023 and $10.5 million in fiscal year 2024, with higher anticipated market prices and production volumes resulting in greater lost revenue than the Legislative Service Office estimated.

Proponents claim the tax cuts will help coal producers “weather declining markets” and potentially reinvest in Wyoming mining operations, despite the industry shedding 632 jobs and losing 48.5 million tons of annual production (20% decline) between 2021 and 2024. Although coal mining directly employs just 4,400 people as of August 2024 (1.5% of state nonfarm employment), many positions pay over $100,000 annually—nearly twice the state average—giving the industry disproportionate political influence despite representing a tiny fraction of Wyoming’s workforce. The Legislature also passes Senate File 17, creating a $10 million fund to support enhanced oil recovery using carbon dioxide injection, with companies qualifying for federal 45Q tax credits able to receive up to $10 per metric ton for CO2 used in extracting additional fossil fuels.

The repeated coal tax cuts exemplify regulatory and economic capture, where Wyoming’s fossil fuel-dependent political class prioritizes industry subsidies over fiscal responsibility despite overwhelming evidence of terminal industry decline. The state’s Permanent Wyoming Mineral Trust Fund, capitalized with coal, oil, and gas revenues, stands at over $11 billion as of July 2024, yet lawmakers choose to sacrifice tens of millions in annual revenue to subsidize companies facing inevitable market obsolescence. The pattern reveals how extractive industries maintain political dominance even as their economic contributions collapse: Wyoming lost approximately 900 coal mining jobs in 2024 alone—roughly 20% of the remaining workforce—yet the Legislature responds by further reducing industry taxes rather than planning economic diversification. This represents capture in its purest form, where a declining industry extracting finite resources maintains sufficient political power to demand taxpayer subsidies while contributing progressively less to state coffers and employment.