The Consensus Revenue Estimating Group (CREG) is responsible for formulating projections of the main sources of income to the major accounts in the State. CREG was created by mutual informal agreement between the executive and legislative branches in 1983 as a result of the need for reliable and consistent revenue estimates which could be used by the executive branch and the Legislature in the budgeting process.
Prior to the formation of CREG both branches of government produced and used their own revenue estimates. As would be expected in such a process, disparity between estimates arose, and discussions which should have been focused on appropriate governmental spending levels were instead often focused on the accuracy and reliability of the revenue estimates themselves. Among the purposes for the formation of CREG was the elimination of those revenue arguments.
(a) CREG Membership.
CREG is composed of members from various professional fields and governmental organizations. Its members include the LSO's Budget/Fiscal Manager and the Economic Analysis Division Administrator from the Department of Administration and Information, who serve as the Co-Chairmen of CREG. The body of the group is made up of the Director of the Wyoming Oil and Gas Commission, the Director of the Wyoming Geological Survey, a University of Wyoming Economics Professor, and representatives from the State Auditor's Office, Department of Revenue, Department of Education, and the State Treasurer's Office. This composition results in representation from the legislative and executive branches, as well as the academic and professional realms.
The members of CREG project the various streams of revenue to the General Fund, revenues from mineral severance tax and federal mineral royalties, the revenues received by the Common School Land Income Account, and the total state assessed valuation.
(b) Development of CREG Estimates.
The process of developing estimates begins in August when the members of the minerals subgroup of CREG begin preparing estimates of mineral valuations. This subgroup is composed of the Director of the Wyoming Oil and Gas Commission, the Director of the Wyoming Geological Survey, the Supervisor of the Mineral Tax Valuation Division of the Department of Revenue, and the CREG co-chairmen. In late September the minerals subgroup meets and finalizes the estimates of mineral valuation. The entire CREG group meets in early October to review the minerals subgroup's valuation estimates, and to forecast the balance of the revenue categories.
After the projections are completed, the LSO and the Economic Analysis Division compile the information into the annual CREG report. The CREG forecast is then used by the Governor and the Legislature as the official revenue estimates for preparing and adopting state agency budgets.
(c) Revised CREG Projections.
If necessary, the October CREG forecasts are revised in January, the only other regularly scheduled meeting of the group. After the January meeting an official CREG report is issued which contains revised projections if revisions were made. This is done to take advantage of the most current actual data (and thereby make the near-term forecast as accurate as possible) before the information is used in the legislative session.
Unusual circumstances sometimes require CREG to hold a special meeting to revise its estimates, as was the case during the Persian Gulf war when oil prices skyrocketed causing increased mineral revenues to be generated. In cases such as these, a special report is issued outlining the content of the meeting and any revisions that were made to the forecast.
(d) Contents of CREG Reports.
The CREG Report contains the following information:
(i) Projections for major revenue sources to the General Fund are detailed including sales and use taxes, pooled interest and Permanent Wyoming Mineral Trust Fund interest and severance taxes. Other revenue sources projected include charges for sales and services, franchise taxes, licenses and permits, and other smaller more varied sources of revenue to the General Fund;
(ii) The severance tax forecast details projected production, price and expected severance tax receipts for each major mineral including oil, natural gas, coal, and trona. In addition, the report shows expected distribution of severance taxes to each fund or account that receives the taxes;
(iii) The federal mineral royalty forecast also details projected production, price and expected royalties for oil, natural gas and coal and details the expected distribution of royalties to each fund or account that receives the royalties;
(iv) The last section of the report projects income derived from investment of the Common School Permanent Land Fund and projects total state assessed valuation based on mineral price and projection estimates and estimates of assessed valuation for all other types of property based on historical trends.