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Legislature moves fifth penny compromise forward
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Legislature moves fifth penny compromise forward

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Legislature Press Briefing

The Capitol rotunda is seen through skylights in the extension building Monday, Feb. 10, in Cheyenne.

A bill that would allow counties to extend the effective length of an optional 1-cent, county-wide sales tax — colloquially known as the “fifth penny tax” — passed an introductory vote Tuesday in the House, a significant step in a yearslong process to increase revenues for local governments.

The 42-17 affirmative vote advances legislation to allow county governments to ask their residents for a sales tax increase by up to a penny if the residents of the county have already passed their own penny tax.

Currently, two-thirds of the municipalities in a county have to approve of a county-wide tax before the tax can be instituted. This legislation would reduce that threshold to 50 percent, which would break down the current interplay between larger communities and smaller communities, who could be seen as holding larger communities “hostage” to avoid paying higher taxes for projects they may not directly benefit from.

While supported by municipalities and counties alike, the bill had its opponents. Rep. Scott Clem, R-Gillette, suggested he would be in favor of the effort if it did away with the state’s current direct distribution model — which municipalities have consistently opposed in several years of discussions on similar legislation.

Rep. Dan Laursen, R-Powell, meanwhile argued the legislation could cause a rift between counties and municipalities or even two communities — a fear that groups like the Wyoming Association of Municipalities and the Wyoming County Commissioners Association have worked to ease in their work on the bill throughout the interim.

Passage of the bill has been outlined as a primary legislative priority for multiple municipalities across the state. While city officials aren’t counting their chickens yet, they say getting over this first hurdle is a good omen.

“We appreciate the opportunity to have the discussion,” Casper City Manager Carter Napier said.

Given that this conversation has been a near-constant in the Legislature, Napier said he knows the bill will be up against the same arguments made in previous years — about who should have taxing authority and how cities, towns and counties co-exist. Still, Napier said he thinks this year those concerns may be mitigated because of the collective effort that’s gone into the legislation.

Legislators have asked municipalities to compromise on a solution to the issue of municipalities not having enough means of generating revenue.

“This is that effort,” Napier said.

Indeed, both the Wyoming Association of Municipalities and the Wyoming County Commissioners Association are in support. Cheyenne Mayor Marian Orr is also a staunch advocate of the bill, saying that what helps Cheyenne helps the whole state.

“A very strong and vibrant Cheyenne is a very strong and vibrant Wyoming,” she said, because no matter what, 4 cents of every dollar spent in the city still goes back to the state.

Orr also touched on one of the concerns Clem raised regarding direct distribution. While municipalities are unsupportive of losing any amount of direct distribution money from the state, Orr said giving municipalities an avenue to raise their own revenue could eventually put cities in a position to no longer rely on that direct distribution money. It also gives cities a better chance to advocate for themselves, she said.

“By putting limitations on a community at the state level, it really hampers what each community wants their city to look like,” she said.

It’s not just large cities that are in favor of the bill, either. Jennifer Sorenson, mayor of Evansville, a town of less than 3,000 people adjacent to Casper, said the bill could actually give her residents a louder voice in decision-making.

Because part of the legislation would reduce the threshold of voters needed to pass a penny tax, she said it gives Evansville voters more weight in decision-making.

“We do need that help,” she said. “We don’t have a lot of revenue-generating things out there.”

Not all small municipalities are in favor of every aspect of the legislation, however. Seth Coleman, mayor of Mills, another small town adjacent to Casper, said he’s wary of the proposal. He said he worried that changing the voting threshold from two-thirds to half of county voters would take decision-making authority away from residents. He also worried about how equitable the bill is.

Coleman used Natrona County as an example. While Casper’s population makes up the majority of the county’s population, there are a handful of small towns surrounding the city. Coleman made the point that because of how close those towns are to Casper, small-town residents are still spending money and contributing to the city’s sales tax collection.

If Casper is the only municipality that could reap the benefits from that spending, Coleman said he didn’t think that was equitable.

As for how the legislation could work in practice, the city of Casper provided one example: Casper is looking to build a new police department headquarters, a project consultants have estimated will cost at least $35 million. Napier has suggested putting the project up for a vote the next time county residents go to the ballot to vote on 1-cent sales tax projects.

The issue, however, is that county residents who don’t live in Casper may not feel they benefit from the Casper Police Department and so may vote against the tax.

With this legislation, if the city received permission from the county to do so, even if county residents didn’t approve a 1-cent tax for the project, the city would still have an avenue for Casper residents to vote to support the tax.

Napier said he knows the bill isn’t a panacea for every municipality, but at least having a conversation on the issue moves the needle forward.

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Politics Reporter

Nick Reynolds covers state politics and policy. A native of Central New York, he has spent his career covering governments big and small, and several Congressional campaigns. He graduated from the State University of New York at Brockport in 2015.

Local Government Reporter

Morgan Hughes primarily covers local government. After growing up in rural Wisconsin, she graduated from Marquette University in 2018. She moved to Wyoming shortly after and covered education in Cheyenne before joining the Star-Tribune in May 2019.

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