CHEYENNE — Even Valentine’s Day couldn’t make Wyoming lawmakers love taxes. The House rejected a small increase in the tax on liquor in the state by an overwhelming margin Wednesday morning.
The measure was one of the few tax bills sponsored by the revenue committee and its failure suggests that it’s unlikely that any of the two remaining tax proposals will pass the House.
Revenue committee chair Rep. Mike Madden, R-Buffalo, framed the alcohol tax as an increase in the state’s wholesale liquor markup intended to cover the cost of delivery and processing. The legislation would have raised slightly less than $3 million per year.
“By looking at other surrounding states we’re clearly too low (in our markup),” Madden said.
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But his colleagues were unswayed. Most lawmakers appeared concerned that the “markup,” which would have raised the liquor tax from 17.6 percent to 20.6 percent, was simply a roundabout way of passing a tax increase.
“I just want to mention to the body here that this is a tax increase,” Rep. Chuck Gray, R-Casper. “Vote no.”
The bill failed to be introduced after 22 legislators voted in favor of the bill and 38 opposed it. During a budget session, bills need two-thirds of House members, 40 lawmakers, to vote in favor of introduction.
The lopsided margin suggests it will be difficult for any revenue-generating measures — which must be introduced in the House — to pass this session, even as the Legislature grapples with an $850 million budget deficit. While most major tax proposals were killed by the revenue committee two weeks before the session began, a $1 increase in the tobacco tax and a statewide lodging tax are awaiting votes.
Management forwards lodging
The Legislature’s Management Council, composed of top members of both parties, agreed to advance a statewide lodging tax bill late Tuesday night after a torturous process.
What originated last fall as a “tourism tax” supported by the travel industry in order to support marketing efforts for Wyoming morphed into a “lodging and hospitality tax” that would have levied a 1 percent fee on all businesses that serve tourists, including bars and restaurants frequented by state residents. Once it became clear that the tax would not exclusively affect out-of-state visitors, it lost the support of the revenue committee, which voted it down.
Management Council, which typically sets legislative policy rather than sponsoring bills, then took the highly unusual step of considering its own bill, which would apply a 4 percent lodging tax across the state in order to fund tourism promotion efforts, with 2 percent of the tax going into state coffers and 2 percent to cities, towns and counties.
It’s a familiar refrain: Hunker down. Weather the storm. Ask God for one more boom.
The measure was originally discussed last Saturday but the Council postponed a vote until Tuesday evening and did not take a final vote until nearly 9 p.m., by which point the travel industry and the Wyoming Association of Municipalities had come out against the bill.
“What I’ve found is the concerns of the lodging industry in Sheridan are different from the concerns of the lodging industry in Teton County, in Gillette and so on,” said Chris Brown of the Wyoming Travel Industry Coalition. “Unfortunately at this point we are unable to support the bill. There are too many questions and too much difference within the industry.”
While several amendments that could have made the tax more palatable to cities and towns were discussed at the meeting, members in the end passed the bill unchanged out of committee. It would raise around $15 million per year.
“This is a work in progress,” Senate President Eli Bebout, R-Riverton, said.
Perhaps sensing the House’s hostility toward new tax measures even before Wednesday’s rejection of the liquor tax increase, Bebout joked that the bill should initially be considered by the Senate, despite the rules requiring tax proposals to be introduced first in the House.
“We could suspend the rules,” offered House Majority Floor Leader David Miller, R-Riverton, also in jest.