Local municipal leaders need authority to generate revenue and more sources of dependable funding, according to Rick Kaysen, the executive director for the Wyoming Association of Municipalities.
Wyoming is one of the few states that does not give cities or counties independent taxing authority, meaning municipalities are largely reliant on appropriations from the Legislature to supplement the share of local sales and property taxes they receive.
City and county governments were most recently allocated about $100 million from the Legislature, but the state’s boom-or-bust economy depends heavily on the energy market, meaning local governments are often left asking questions about the certainty of that funding, explained Kaysen.
“Will we have money next year?” he asked. “Will we have money in two or three years?”
The executive director said the association has come up with a few solutions that could help eliminate that uncertainty, and it will present these ideas Tuesday at the Joint Revenue Committee meeting in Buffalo.
Kaysen said the association has three main proposals: Give local governments the power to raise money though property taxes, increase sales tax statewide from 4 to 5 percent and consider removing some of the state’s tax exemptions.
Although he acknowledged these suggestions might not be popular, Kaysen said citizens expect their local governments to provide them with certain services, such as fire protection and solid waste management.
To make sure municipalities are meeting those expectations, “there has to be some type of revenue source,” he said.
Kaysen said raising the sales tax by just 1 percent could generate about $32 million annually, which could go toward supporting local governments.
“That 5 percent would still be low in comparison [to other states],” he added.
Similarly, Kaysen said Wyoming could eliminate a few of its 39 tax exemptions and still be ahead of Colorado, which has only 14.
Kaysen, who said all tax exemptions should be examined, said legislators should consider cutting those not found to be providing “direct support to economic development.”
Councilman Charlie Powell said he supports these proposals.
The councilman explained that the Wyoming Taxpayers Association concluded that the average state citizen pays $3,000 in taxes annually but uses $30,000 worth of government services.
“We have to have ways to provide our core services,” he said. “The city can only do the things that we have the funds to do.”
But the Wyoming Legislature is generally reluctant to raise taxes.
Lawmakers cite 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 of its reserves before levying more taxes.
However, the state is currently facing a $530 million deficit in the education fund for the two-year budget cycle that begins next year, and the Legislature’s leadership recently tasked the Joint Revenue Committee to recommend proposals that will raise revenue.
The Joint Revenue Committee generated five proposals for new revenue bills at its meeting in August, all of which would raise existing taxes.
Committee co-chairman Rep. Mike Madden, R-Buffalo, said then that 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, and finding a new way to tax tourism.
“Not all of these ideas are going to move forward,” Madden said at the time.
Nate Martin, the director of the left-leaning group Better Wyoming, released a statement after the meeting criticizing the committee for requesting draft bills on taxes that are likely to fail if advanced to the full Legislature.
“The committee passed bills apparently under the assumption that they would fail,” Martin wrote in the release.