Municipal governments in Wyoming stand to lose more than $100 million in direct funding to offset anticipated shortfalls in the education budget.
With that reality looming, the Wyoming Legislature’s Joint Revenue Committee met two weeks ago in Buffalo to discuss a number of new ways to provide funding to cities, towns and counties.
Lawmakers considered one bill that, if passed, would allow municipalities to have greater freedom to tax themselves independently. Critics said the plan — while offering much-desired flexibility for cities and towns — was flawed because it would disproportionately benefit large cities and towns and would not serve as a true replacement for the state’s direct funding.
Their argument: a large town with lots of tourists or strong retail can generate revenue small towns with no retail or visitor traffic can’t, thereby creating a system where there are winners and losers.
This leaves state legislators with a challenge. The education budget needs funding and will likely make up part of their shortfall from the $105 million in direct aid municipalities currently receive. That replacement, the Wyoming County Commissioners Association has argued, must be backed with real money, must not exacerbate inequalities between one town versus another and should allow revenues generated in a locality to remain in that locality.
This, though a formidable challenge, is not impossible. At the Sept. 21st meeting, the WCCA — while not offering direct proposals to solve the problem — did offer committee members three examples of possible actions to replace that funding, supported by rough calculations of how each scenario would impact local budgets.
Option A would allocate an increased amount of what the state already collects in sales tax revenues to cities and counties, ensuring local governments get to retain more of the tax revenues raised there. At the same time, it would raise the statewide sales tax from 4 percent to 4.25 percent.
While largely benefitting communities with high sales tax revenues, this option would provide some municipalities a real replacement to direct aid without increasing taxes: In total, a 3 percent boost to the local share of statewide sales tax, combined with a quarter percent increase in state tax, would net municipal governments approximately $61 million over the next two years, while counties would see an increase of roughly $21 million.
If paired with slight increases to residential, commercial and industrial property taxes of a quarter of a percent, this proposal would create $90.3 million in new revenues for cities, towns and counties over two years, leaving the state on the hook for $21.6 million in backfill funding to make up for the difference in the money it took and what communities could expect with a new model. However, this option would eliminate the need for backfill funding in Campbell, Converse, Johnson, Laramie, Lincoln, Sublette, Sweetwater and Teton Counties, as well as in 12 separate municipalities.
This option, according to estimates, could result in $30.9 million in direct distribution savings to the legislative stabilization reserve account (known as the LSRA, or general fund) as well as more than $13.2 million in new revenues to the general fund and school accounts, amounting to $44.2 million in benefit to the state.
Option B would implement a larger splitting of the sales tax revenues (a 4 percent increase for local governments) as well as reinstating a 4 percent sales tax on groceries, a prospect that has been a politically tricky area over the years. Using similar math, this would create slightly less in new revenues while also costing the state several million dollars in net revenue, thanks to $33.5 million in sales taxes transferred to local governments, compared to $24.9 million in grocery taxes gained.
Altogether, the state would be on the hook for $21.3 million in backfill to make up for — less than under Option A. However, the same nine counties and 12 municipalities would see high enough increases to make up for their lost distribution. With more than $31.1 million in savings to the LSRA plus close to $3 million in new income to the general fund, the state would see $34 million in benefit.
Option C would raise the state severance cap — a statutorily created cap that now directs the first $155 million in taxes paid by mineral companies to seven different agencies including cities, towns and counties — to $200 million. It also raises the sales tax split to a 36 percent share for local governments and adds a 2 percent sales tax on food. Though this plan would save the LSRA $36.4 million, it would tank revenues to the general fund by $51.6 million, resulting in a $15.2 million hit to the state each year. The state would only be on the hook to replace $16 million in lost revenues to municipalities under this scenario; however, the overall hit to the general fund would make this option unlikely.
The state could — if it chooses to — make up for some of the shortfalls by implementing other revenue options, each of which have their own pitfalls. These include increasing the property tax ratio to roughly 11 percent (leaving municipalities $22 million short), increasing the statewide sales tax to 4.85 percent (essentially amounting to a regressive tax on municipalities, who will likely vote against local option taxes as a result), shifting more statewide sales tax to locals (killing the state’s general fund) and imposing a statewide lodging tax, one of the few revenue options with no victims: a 3 percent increase, according to WCCA estimates, could result in $19.2 million annually.
Throne Launches Massive Ad Buy
Earlier this week, the campaign for Democratic candidate for governor Mary Throne announced it would be making an “unprecedented” six-figure, multi-platform ad buy ahead of the general election this November.
According to a press release from the campaign, the ads will appear on Facebook, YouTube, Hulu and as pre-roll video across the internet based on people’s ZIP code and voter profiling. The first ad — as has been a theme of her campaign — will focus on healthcare.
“As the only major party gubernatorial candidate advocating for Medicaid expansion, Mary has a plan to help 20,000 Wyomingites get affordable coverage, support our rural providers, and lower premium costs for everyone,” a statement from the campaign said. “Mary Throne is the only candidate with a serious plan to protect those with pre-existing conditions.”
Other campaign drama?
Dark money influences have already begun to creep into Wyoming politics this election season.
According to Democratic campaign sources for Throne and U.S. Senate candidate, Gary Trauner, two “push polls” — biased electioneering communications disguised as legitimate polls — have been taking place in recent weeks, prompting both candidates to release statements. Trauner said the poll conducted against him was a “sleazy and a tried-and-true part of the D.C. Playbook that people in D.C. use to stay in power at the expense of serving the public.” The poll implied he would not respect Second Amendment rights, he said, and ties him with Sen. Bernie Sanders’ ambitions to bring single payer healthcare to the United States.
“It’s a bunch of B.S.,” said Trauner. “This is what they do in D.C., create labels, point fingers and make stuff up to create fear and division with outright false and misleading information.”
The Star-Tribune was told that no recording or additional information on the poll was available.
The campaign for incumbent John Barrasso distanced itself from the poll, adding in a statement “Having already run multiple campaigns for office, Mr. Trauner’s positions on these issues are well known.”
Another push poll was released about Throne this week, prompting her team to respond:
“We don’t know who funded the push poll, but we do have a message for them,” said Throne’s campaign manager, Matthew Herdman. “First, we’re flattered that you’re threatened enough about us to resort to dishonest tactics. Second, if you’ve got something to say, say it publicly and put your name on it.”
With little to go on and no updated campaign finance data to speak of, the source of these expenditures will be hard to track. The statewide campaign finance filing deadline is Oct. 30.
Eye On Washington
Here’s a brief look at what your federal representatives did in Washington this week:
Sen. John Barrasso, who serves as chairman of the Senate Committee on Environment and Public Works, gave some remarks before a hearing on sea plastic pollution, acknowledging the problem but not providing any proposed actions. He noted National Geographic had equated the issue to one as monumental as climate change. Barrasso also introduced a bill in the Senate Natural Resources Committee to “provide certainty with respect to the timing of Department of Energy decisions to approve or deny applications to export natural gas, and for other purposes.” The text for the bill is not yet available.
Sen. Mike Enzi was fairly quiet in an otherwise wild week in Washington. On Tuesday, Enzi co-sponsored a bill to modernize federal grant reporting, the text of which is not yet available. A resolution he has been involved with Sen. Barrasso on to reauthorize the Congressional Award Act also made some progress this week, and on Tuesday, he a hosted a U.S. Senate subcommittee roundtable on rural health with respect to Wyoming.
“It struck me that as we explore health care costs in more depth, we should also take a serious look at health care in rural America to understand the unique challenges that rural patients and providers face — how those challenges can affect the cost of care and learn more about how our current policies are working and where they might be improved,” Enzi said.
Video of the testimony can be found here.