This campaign season, the Wyoming Liberty Group asked state legislative candidates to sign a short pledge to oppose new and increased taxes.
The Liberty Group, a Cheyenne-based nonprofit that champions a number of conservative and libertarian causes, is maintaining an online list of all the candidates who have signed and mailed back the promise.
Most lawmakers resisted the pledge.
“I’m elected by the people, not by a representative group,” Rep. Steve Harshman said in early October. “People do what they want, but I’ve never signed any pledges — of any kind — on any issues. I think we’re elected to solve problems.”
That said, the Casper Republican has been reticent to talk taxes as a possible solution to Wyoming’s financial woes, with revenues down in the current energy bust.
Last week, when the Star-Tribune asked about the possibility of a tax increase to shore up a $157 million revenue gap, Harshman was adamant the option was not on the table.
“Those are your words,” he told a reporter last week, emphasizing he was not even remotely thinking about remedies beyond cutting government and spending savings.
The Liberty Group’s tax pledge is having a chilling effect on lawmakers’ decisions about what’s best for Wyoming, even if a majority of incumbents refuse to sign it, said Sen. Chris Rothfuss, the Democratic leader in the Wyoming Senate. Rothfuss, who is not up for re-election this cycle, thinks it’s time for a tax discussion.
“We have candidates who are willing to talk and think about changes to our tax structure, and those are typically the experienced, moderate, constructive legislators who are trying to do in the best interest of the state,” the Laramie senator said. “Once those conversations begin, those people are targeted in the election cycle and frequently eliminated.”
For eight years, the Wyoming Liberty Group has influenced policy, probably more than any other activist group in the state.
It stands out among a group of nonprofits and limited liability companies that play the game of politics, without revealing their donors — or what those donors’ intentions are. Its political spending is known as dark money, since there is no way to track how much it spends for and against candidates.
The Liberty Group is loved by the thousands of Wyomingites who receive the organization’s emails apprising them of happenings in Cheyenne. It is respected for its effectiveness in spreading its message. It is distrusted by people who oppose its ideology, as the group has ties to wealthy industrialists Charles and David Koch. It is detested by some lawmakers for its Liberty Index, a rating of lawmakers that critics call a purity test based on subjective measures. And it’s left a bad taste in some people’s mouths for the negative campaigns organized by its sister group, Republic Free Choice, that target candidates who don’t fall in line with its beliefs.
“It’s this Gore lady, G-O-R-E,” said retired Republican U.S. Sen. Al Simpson, spelling out the name of Susan Gore, the Liberty Group’s founder. “She’s out there. She’s financing these outlets… She’s a zealot. A zealot is one who has forgotten their purpose, doubles their efforts.”
But the organization is undergoing a public relations makeover.
Gore is retiring. In her place is a new CEO, Jonathan Downing, a longtime fixture in mainstream Republican circles. The organization is retiring the Liberty Index. Republic Free Choice is staying out of the 2016 elections – even if the Liberty Group is playing a role in the tax pledge. As the organization backs away from campaigning, it is embracing its roots as a think tank, staff members say. In addition to Downing, there are fresh faces at the office.
“The Liberty Group, I think in the past, some of the positions or their voices were misunderstood,” Downing said. “I don’t want that to be a criticism of those who came before me. As you have a new organization, as you grow and as you mature as an organization, that’s the piece I would say where it’s going to be here and I want us to be here as a solution.”
Downing’s background is conventional, even vanilla, compared with that of Gore, an heir to the Gore-Tex weatherproofing fabric fortune.
According to published reports, including a 2015 profile by the journalism nonprofit WyoFile, Gore adopted her ex-husband in 2003 in an attempt to increase her children’s inheritance in a family trust. Forbes lists the clan as the 59th richest family in America. In the 1980s, Gore and her children lived in Iowa and were part of a community with transcendental meditation expert Maharishi Mahesh Yogi, who had been a spiritual adviser to the Beatles, WyoFile reported.
Downing, on the other hand, has a traditional Republican background, including degrees from the University of Wyoming and a stint in Wyoming GOP leadership about eight years ago.
He worked U.S. Sen. Mike Enzi in Washington and for former Gov. Jim Geringer, a Republican, in the Wyoming Workforce Development Council when Democratic Gov. Dave Freudenthal was in office.
Later, he led the Wyoming Contractors and Wyoming Mining associations.
It was at the Mining Association where Downing first began working closely with Amy Edmonds, a former Republican lawmaker who is a policy analyst at the Liberty Group. Downing, Edmonds and representatives of other trade associations talked tax policy earlier this year as state revenue began to drop.
“It was one of those interview processes where you didn’t know you were being interviewed,” Downing said. “And then I had a conversation with Susan (Gore), and we talked a lot about the Liberty Group as well as the core principles and goals of the organization. And they line up with my conservative values and beliefs.”
State cuts, early retirements
Downing said one of his immediate tasks is to assist lawmakers on the state budget challenge.
“We can serve as a research arm and (offer) analytical pieces as far as what has happened in other states as they’ve had these budget challenges,” he said.
Downing and others at the Liberty Group believe it is time for cuts. When Downing worked for Geringer, money was tight in Wyoming. State leaders considered early retirements for Wyoming employees. They closed the Wyoming printing office and gave the business to the private sector, he said.
And today, Wyoming needs to look at early retirements for state employees, he said.
“We also need to be looking at how to be efficient – there are a lot of great state employees out there – but it’s like, can we do more with less?” he asked.
Downing said he wants to study other states for efficient government operations.
“There’s programs out there. We’re not into specifics, but we need to do the research,” he said.
Conservatives in Wyoming are proud of the state’s low tax burden – there’s no income tax, and its cigarette and beer levies are some of the lowest in the country. The state can get away with taxing its residents at low levels since the minerals industry pays most of the government’s bills. But with mineral revenues down, lawmakers face a choice: cut, dip into savings or raise more money through taxes.
To the Liberty Group, the tax proposition is unacceptable.
“Our population hasn’t increased that much since the last time we’ve been in a tight position, but our budgets have,” Downing said.
But Wyoming’s tax system is advantageous to the rich, with the state’s poor and middle classes paying a disproportionate amount of their income on sales and property taxes, said Carl Davis, the research director of the Washington-based Institute on Taxation and Economic Policy.
For instance, people who earn $25,000 to $41,000 pay 6.9 percent of their income to Wyoming in various forms of taxes. People who earn $625,000 or more a year pay 1.2 percent.
The disparity, one of the widest in the country, could be corrected through an income tax. State income taxes are generally tailored to protect the poor through credits or exemptions, Davis said.
Downing said such statements exploit class warfare, and an income tax is no solution.
“There’s a reason a lot of people live in Teton County, and it’s because of our favorable economy,” he said. “The Tax Foundation listed Wyoming as No. 1 for being the friendliest tax climate in the nation.”
Since the Liberty Group’s donors are secret, it’s unknown how many of them have high incomes. Downing said the group continues to receive support from Gore and has a nine-month fellowship position funded in part by a grant from the Koch brothers.
That information alone is enough for Rothfuss, the Democratic leader in the Wyoming Senate, to say the Liberty Group is working against the interests of most in Wyoming while protecting its members’ tax position. Millions of dollars are at stake, Rothfuss said.
“Those are the types of things that are really being fought,” he said. “To make sure that never changes.”
Anti-tax advocates contend revenue increases are bad for economic growth, but people need to ask what the purpose is for that revenue, said Davis of the Institute on Taxation and Economic Policy.
“If you were to levy a tax and the state collected the money and burned it in a trash heap, that would be bad,” he said. “But infrastructure improvements, better transportation, a better educated workforce, more job training — these are services that can matter hugely to an economy.”
Not all of the Liberty Group’s projects have to do with fiscal policy.
The Liberty Group is widely credited with ushering reform to the state’s asset forfeiture laws.
Previously, police and prosecutors could seize money, guns, vehicles and other property that belonged to people suspected in drug crimes, even without a conviction. The new law makes it harder to take property.
The Liberty Group now wants to help the Legislature with a criminal justice reform bill that lawmakers have been working on for over a year, Downing said. It is complex and involves sentencing reform for nonviolent criminals.
Democratic Rep. Charles Pelkey said criminal justice reform is one of the few objectives he has in common with the Liberty Group, which gives him a low rating on the Liberty Index.
“They had Steve Klein, who is a remarkably good attorney and thoughtful,” said Pelkey, from Laramie. “I worked with him on civil asset forfeiture and criminal justice reform and sentencing reform. That’s sort of the way I envision Wyoming working.”
Move to the mainstream
Bri Jones of the Equality State Policy Center said if the Liberty Group is successful at reshaping its image, its ideas may not be seen as coming from the fringe and could be more easily accepted.
“I think it’s a pretty extreme view to not support Medicaid expansion, and the Liberty Group has been very extreme in their approach to this,” Jones said. “Those sort of extremist views have had a huge effect.”
Jones said not accepting expansion is extreme when many of the 32 states that have adopted expansion are conservative, such as Alaska, Arizona, North Dakota and Louisiana.
The Liberty Group opposes Medicaid expansion for many reasons, including its belief that the traditional Medicaid program is failing patients.
But Keith Gingery of Jackson has no problem with the role the anonymous organizations play. Gingery served in the Legislature from 2004 to 2015. He doesn’t see them as much different than other groups that talk to lawmakers, such as the Wyoming Education Association.
“Wyoming Liberty Group and WyWatch (a now-defunct socially conservative anonymous group) were always very upfront as to their objectives,” he said. “Sometimes when some of these groups start out, they go a little overboard. But they quickly find their way and get advice from other lobbying groups as to the best way to approach legislators.”