Wyoming lawmakers continue to grapple with an education funding deficit that began after the last energy bust took a major bite out of state revenues. School districts throughout the state have had to bear the burden of this massive — $200 million – shortfall. In Natrona County, five schools were shuttered in the last two years, affecting hundreds of students, the neighborhoods where the schools were located and even entire towns.
Meanwhile, lawmakers in Cheyenne continue their push for a cut-based approach to solving the deficit and balk at any conversations about new revenue, i.e. taxes. And while several leaders in the Legislature have called for “modernizing” Wyoming’s tax structure, lawmakers this year – like most years – seem to have little appetite for the discussion.
But a measure in the Legislature this year brings a new way to increase revenue with little to no cost to Wyomingites. The National Retail Act, sponsored by Casper Rep. Jerry Obermueller, a retired CPA and a Republican, would impose a 7 percent levy on large, out-of-state corporations, that are currently operating tax-free in the state.
The tax would bring an estimated $45 million annually into the state coffers, all of which would go into the education budget. The crucial characteristic of the tax is that it would primarily affect out-of-state businesses, which are already subject to comparable taxes in 48 other states.
This board has advocated for creative solutions to the education funding deficit that don’t lean solely on deep cuts to Wyoming school systems. And we think this measure could be a key step in that direction.
A primary argument against taxes on corporations is that the cost gets passed on to consumers. We understand and appreciate that concern. However, the cost of this 7 percent tax would be absorbed and distributed throughout retailers nationwide – so the burden to individual consumers in Wyoming is almost nothing.
Lawmakers repeatedly fail to take serious action when it comes to finding new revenue streams. The boom and bust cycle makes education funding shaky. Large corporations that are coming into Wyoming and paying little to no taxes should be expected to shoulder some of the burden, which currently rests squarely on the energy industry. And $45 million is a sizeable chunk of the state’s education funding deficit.
The benefits of an updated corporate tax structure would be considerable. And providing a consistent stream of revenue to support our schools would be smart.
We cannot only cut our way to a smart solution to education funding. Nor are taxes alone the answer. It’s time legislators consider a variety of solutions to solving the massive education funding deficit that is so undeniably important to Wyoming’s future. As Rep. Obermueller points out, not all taxes are created equal – and not all of them are inherently wrong for Wyoming.