Committee rejects property tax increase

RIVERTON — State Sen. Cale Case, R-Lander, lambasted his colleagues on the Joint Revenue Committee this week after the majority opposed drafting a bill to raise property taxes by 2%. 

It was the first major revenue-generating proposal the committee voted on during its two-day session last week in Lander, and it failed 8-6. 

“Is this a trend that everybody’s going to have on every revenue bill?” Case asked after the votes were tallied. “If so, how responsible are we being here? … Are we just all going to say no? This could be your most important time in your history on the revenue committee, and are you going to let the state down?” 

The committee meeting began with a stark description of Wyoming’s current revenue forecast, which is down by $1.5 billion compared to January estimates due to the combined impacts of the coronavirus pandemic and the depressed minerals industries. 

Dan Noble, director of the Wyoming Department of Revenue, said a new 2-mill property tax assessment for residential, commercial and agricultural land, combined with a 2% increase in industrial property taxes, would bring in an extra $157 million to Wyoming, with almost $60 million of that total going to counties, cities and special districts, and $98 million going to fund education. 

For someone who owns a $100,000 home, Noble said the increase would amount to an extra $137 property tax payment per year. But Wyoming Sen. Ogden Driskill, R-Devils Tower, noted that many properties in Wyoming are worth much more than $100,000. 

“We’re talking about businesses that are millions and millions of dollars,” he said. “This, in my opinion, puts unbelievable burdens right back on the people that are hiring our people in small business.” 

Case pointed out that the property tax increase would send additional money to local government entities that are “in desperate shape” as they begin formulating their budgets for the coming fiscal year. 

“It does seem one of the most fair ways to affect people,” Wyoming Rep. Dan Zwonitzer, R-Cheyenne, said. “I think [it’s] something people could get behind, because most people in their local communities would see direct results.” 

Driskill disagreed about the idea of a property tax increase being “fair.” 

“I think it hits the smallest group possible,” he said. “I’m not going to be party, on my end, to raising real estate taxes on the people that pay all our bills and hire our people.” 

It was Wyoming Rep. Cathy Connolly, D-Laramie, who made the motion to draft the property tax increase bill, proposing a tiered approach that would allow for a 1% increase in 2021 followed by an additional 1% increase in 2022. 

Before voting on Connolly’s proposal, Case pointed out that the motion was merely to draft a bill – not to approve one. 

“We’re getting a tool out,” he said. “The situation could change, perhaps dramatically (and) we may not need these tools. But if we don’t begin to create them, we leave our future legislators and ourselves … with a mess.” 

The committee had heard a report earlier in the meeting about the “structural deficit” in Wyoming’s budget, which is largely reliant on mineral wealth and is “not sustainable” anymore, according to state revenue experts. 

Case noted that coal production is expected to fall below 300 million tons, from a record high of 450 million tons. 

“Let’s be clear that coal is on its way out,” Case said. “If Wyoming is still producing coal in 10 years I might be surprised.” 

Natural gas production and valuation declines have matched – “and in some cases exceeded” – coal’s, Case continued, and as a result, Wyoming’s current budget is heavily reliant on oil production – which is now predicted to decline by 43% this year compared to January estimates. 

“We left the legislature with an oil-based budget, an oil-based future, that is not materializing,” Case said. “Wyoming’s tax structure, which has served us well for a very long time, is under increasing stress. … I’m not sure that we can fundamentally, successfully transition our economy in the next two to 10 years without transitioning our tax structure.”

“I don’t think we’re going to vote no on every one of these,” Blackburn said after listening to Case’s criticism against those voting against the drafting of the bill. “I can see that we need to do something … but I think we need to listen to all of our options.” 

Case countered that Blackburn and his colleagues had just removed one revenue-generation option from the table by voting against the bill draft proposition. 

“It is a very dramatic time,” he said, hearkening back to the anticipated $1.5 billion decrease in revenues coming to the state. “It is going to hurt. We have tough decisions to make, and this committee has got to be the one to make them. …We cannot make it painless. That’s not in the cards.”