Permanent Wyoming mineral trust fund deposits.

06LSO-0353.L2

FISCAL NOTE

	FY 2007	FY 2008	FY 2009
NON-ADMINISTRATIVE IMPACT
Anticipated Revenue Increase (Decrease):
BUDGET RESERVE ACCOUNT	(63,300,000)	(51,300,000)	(57,800,000)
GENERAL FUND	(31,700,000)	(25,700,000)	(28,900,000)
PERM. MINERAL TRUST FUND	95,000,000	77,000,000	86,700,000
GENERAL FUND	0	2,964,000*	5,400,800*

Sources of revenue increase (decrease): Redistribution of severance taxes that exceed the current $155 million cap and the proposed $225 million cap from the General Fund and Budget Reserve Account to the Permanent Mineral Trust Fund (PMTF); Increase in PMTF investment income distributed to the General Fund.

Assumptions:

The above estimates are based on January 2006 CREG projections.

Assumed additional severance tax distributions to the PMTF occur late in the fiscal year and therefore increase PMTF investment income to the General Fund in the following fiscal year.

The above assumes an increase of PMTF dividend income to the General Fund of 3.12% for FY08 ($95,000,000 x 3.12%), and 3.14% for FY09 ($95,000,000 + $77,000,000 x 3.14%). *These figures do not include any projected income from equities above dividend income.

The equity portion of the PMTF produces income from dividends and capital gains.  The Treasurer’s Office expects equities to produce income during the forecast period, as they have in the past. However, no income is projected from equities above dividend income, because it is virtually impossible to predict what capital gains will be taken during any one year of the forecast period.

Based on market projections, the State Treasurer assumes a 7% long term total return (10+ years) for the PMTF invested in a fully diversified portfolio of 50% equities and 50% fixed income & cash.

The PMTF’s actual return for the 3-year period ending 06/30/05 was 8.2%, with 71% of the portfolio allocated to fixed income & cash and 29% allocated to equities.

Prepared by:   Sharon Garland, Treasurer's Office    Phone:   777-7475