Among the many things included in the GOP policy bill signed into law in July was a break to the coal industry. The idea is to ramp up coal production, so companies will pay the federal government lower fees for mining coal on public lands.

However, those fees go to both the federal government and states. And in the top producing coal state in the country, less coal revenue could mean a sizable financial hit to the state budget.

To understand why Wyoming lawmakers are actually not that excited about the GOP policy bill, we have to take a second to remember just how important coal is to the state. 

A 2007 documentary from Pentrex Train Videos describes it this way: “Come along for a visit to a land where coal is king.”

Over the last 50 years, the state of Wyoming made bank from coal — billions of dollars to fund the government, schools, roads and parks. The state now has its own sovereign wealth fund thanks to coal. 

When coal is mined on federal land, the mining company pays fees or royalties. Half of those royalties go to the federal government and the other half go to the state, and only Congress has the power to change that ratio.

And President Trump’s GOP policy bill lowers those royalty fees for mining companies. State principal economist Dylan Bainer said that might be a great deal for coal companies.

“On the surface, sounds great for Wyoming, but in the way that it is being done is going to negatively impact our revenues,” Bainer said.  

The royalty rate was slashed almost in half. President Trump’s idea is to make it easier and cheaper for companies to mine coal. 

“The goal of this bill is to try to incentivize people to produce and you know, as he said, ‘drill, baby, drill,’” Bainer said. 

But the loss to Wyoming’s state budget is an estimated $50 million a year. 

“I know that was not the intent,” said state Rep. Robert Wharff. “Everybody said how this is such a great thing for our state.”

In a state that had the highest margin of votes for Trump’s presidency, there’s big support for his vision to prop up the coal industry. 

But there is a lot of uncertainty that this is the way to do it. Demand for Wyoming’s coal has been dropping for well over 15 years. 

Republican members of Congress say the lower rates will help revitalize the declining industry. But local lawmakers, like Wharff, worry that shift could take time.

“If it's going to take us multiple years to see that — I don't know,” Wharff said. 

So Wharff and his colleagues are trying to get creative to offset that $50 million loss in annual state revenue. Republican Rep. Bob Ide points to Alaska. It gets a bigger share of royalty fees for oil and gas. 

“Alaska actually has a 90-10 split, and they got that at statehood,” he said. 

Ide is hoping Wyoming can ask Congress to give his state a better deal, but a bill is months out.

In the meantime, Dylan Bainer, the state economist, said the GOP policy bill does lead to an increase in coal production —that could be a good thing for mining towns. 

“That would lead to maybe a ripple effect in terms of restaurant activity, lodging activity, stuff like that, retail activity,” Bainer said.  

But will an increase in potential coal production offset the state revenue loss? On that, he’s not so sure.