The state’s cities and towns need more reliable sources of income, according to the executive director of the Wyoming Association of Municipalities.
Wyoming’s local governments have limited means of raising funds, which leave them largely dependent on appropriations from the state Legislature, Rick Kaysen told the Casper City Council on Tuesday. Given that the state’s boom-or-bust economy relies heavily on the energy market, local leaders are often uncertain about the level of funding they can expect to receive.
This is why the association is recommending the Legislature revise tax laws to give local governments more taxing authority, explained Kaysen.
“I know talking about taxes in Wyoming is pretty taboo, especially when you’re talking increases, but the economic climate has changed,” he remarked.
The association is also suggesting that the cap for severance tax be increased from $155 to $214 million, and that the cap for federal mineral royalties be raised from $200 to $275 million, said Kaysen. In addition to raising funds for local governments, this increase could also benefit state agencies, like the Wyoming Department of Transportation.
Legislators should also consider increasing the state-wide sales tax from 4 to 5 percent, and cutting any of the state’s 39 tax exemptions that are not found to support economic development, said the director. Nearby states only have about 14 tax exemptions.
But given that these changes won’t happen overnight, Kaysen said the association is asking the Legislature to secure about $105 million for city and county governments. This is the standard amount generally allotted and would ensure local leaders could continue to provide services for their constituents.
City leaders have recently worried that this state funding might be reduced, as Wyoming continues to collect low tax revenue due to down energy prices.
Explaining he suspects the funding will be cut, Councilman Dallas Laird asked the director Tuesday if he had a “gut feeling” about what lawmakers will decide.
Kaysen said he was “cautiously optimistic” that municipalities will be allotted the requested $105 million, but also urged council members to contact state representatives about this issue.
“Legislators like to hear from local folks,” he added.
Laird then asked what the association is doing to help local governments prepare in case the funding is reduced.
Municipalities have already been trimming back expenses due to the economic downturn, and will continue to do so if the money doesn’t come through, explained Kaysen. The association also offers various budgeting workshops and programs to help with these efforts.