The Wyoming Legislature is taking baby steps toward considering new taxes in a state known for heavily relying on the boom and bust energy industry for revenue.
The Joint Revenue Committee generated five proposals for new revenue bills at its meeting earlier this month, all of which would raise existing taxes, and will consider a sixth at its September meeting.
Committee co-chairman Rep. Mike Madden, R-Buffalo, said the following options will be considered before the Legislature’s budget session early next year:
Broadening the sales tax to include services
Raising the property tax
Adding a temporary half-percent sales tax
Increasing the tax on wine and spirits
Increasing the beer tax
Finding a new way to tax tourism
“Not all of these ideas are going to move forward,” Madden said. “We’ve got a menu here, and we’re going to be picking and choosing.”
A seventh option, raising the cigarette tax, was considered but did not move out of the committee during the August meeting.
The Legislature’s leadership tasked the Revenue Committee with recommending three proposals to raise revenue: one that would generate $100 million in new revenue, another that would generate $200 million and a third that would generate $300 million.
The state is currently facing a $530 million deficit in the education fund for the two-year budget cycle that begins next year.
The right-leaning Tax Foundation gave a presentation at the meeting about the pitfalls of a gross receipts tax. A gross receipts tax levies a fee every time a product changes hands — such as moving from a manufacturer to a distributor — rather than solely charging sales tax to the final consumer.
Madden said that while the Legislature will not consider such a tax this session, it will ask the secretary of state’s office to begin tracking gross sales, which will allow lawmakers to know what the financial impact of a receipts tax would be.
In a press release following the meeting, the left-leaning group Better Wyoming referred to members of the Revenue Committee as “mopey pre-teens” who did “a crappy, half-hearted job.”
Director Nate Martin criticized the committee for failing to consider a personal or corporate income tax and requesting draft bills on taxes likely to fail if advanced to the full Legislature.
“(T)he committee passed bills apparently under the assumption that they would fail,” Martin wrote in the release.
Gov. Matt Mead voiced general opposition to increasing taxes and said his first option for c…
The Legislature has been loath to consider new taxes, despite the deficit created by falling revenue from energy companies, which typically make up 60 to 70 percent of public funds. Lawmakers have different reasons for their opposition, ranging from the disproportionate impact that an increased sales tax might have on low-income Wyomingites to a belief that the state should cut spending or use more if its reserves before levying more taxes.
Gov. Matt Mead has said that the Legislature should consider spending more of its rainy day fund before increasing taxes.
“I would much rather get money out of the rainy day fund to fund education,” Mead said in an interview with the Star-Tribune earlier this month.