Homeowners speak in favor of a new property tax system, lawmakers move to draft new bill

CHEYENNE — Members of the Joint Revenue Committee moved to draft legislation during their Monday meeting that would amend the state constitution and implement an acquisition value property tax system in Wyoming.

An acquisition value property tax system assesses a property at its market value from the time the property was purchased, with limited annual tax increases until the property is resold, according to the Lincoln Institute of Land Policy. Acquisition value is defined under HB 100 as “the purchase price paid for the acquisition of property.”

Representatives from Team Consulting, LLC, a company hired to conduct a study under the direction of HB 100, presented the legal processes Wyoming would undertake in order to implement an acquisition value property tax system. 

Results of the study showed stakeholders were “apprehensive” in implementing this property tax system in Wyoming, with major concerns over the impact on state funding and its incompatibility with Wyoming’s current infrastructure.

“Wyoming is a non-disclosure state, making it difficult to track sales prices,” the report said. “Those interviewed indicated that there are not currently any building permit programs in place to track property improvements in some areas.”

Those who conducted the study interviewed representatives from the Wyoming County Assessors Association, Wyoming County Commissioners Association, Wyoming Realtors Association, Wyoming Board of Equalization and Wyoming Taxpayers Association. The chief economist of the Wyoming Economic Analysis Division was also interviewed, along with a variety of assessors from populous counties across the state.

Lawmakers criticized the methodology behind the study, commenting the results were “skewed” due to a lack of input from regular homeowners. Sen. Troy McKeown, R-Gillette, said the results were seemingly one-sided, as consultants failed to interview tax paying residents during their study.

“It feels to me like it was directed, it was biased toward the receivers of property taxes instead of the givers of property taxes,” McKeown said. “Your stakeholders, essentially, are on the receiving end of the property taxes, and that’s where most of the input came from.”

Ed Crapo, one of two representatives from TEAM Consulting, LLC, told lawmakers the consultants only operated as directed under HB 100, which was passed during the 2023 General Session. The results were not biased for or against an acquisition value system, he said.

“We’re making no decision as to whether or not we personally think it’s a good idea, or professionally think it’s a good idea,” Crapo said. “We’ve given you a roadmap, which we believe if you follow you could do it.”

Homeowners in favor of an acquisition value-based property tax

Several homeowners during the public comment portion of the meeting spoke in favor of the acquisition value program. Many of them said their property taxes rose up from 60-80% over the past few years.

Dallas Laird, a Natrona County commissioner, said older people who lived on a fixed income struggled the most to hold onto their property.

“We see our people who come in, mostly in agony, over what they believe is happening to them with these tax raises,” Laird said.

Currently, California is the only state in the country to successfully implement this type of property tax system, which went into effect after voters passed Proposition 13 in 1978.

A few homeowners said they were California residents prior to their move to Wyoming. They all spoke in favor of the golden state’s property tax system.

Susan Martin, who previously lived in Thousand Oaks, Calif., and is now a Natrona County resident, said she was “a prime example of Prop. 13.” She said bought her home for $183,000 before a real estate agent gated off a lake two miles down the road and began selling homes starting at $20 million.

“If I had not had Prop 13, my husband and I...would not have been able to afford that,” Martin said. “I see whiffs of this in Wyoming...especially at Teton County.”

Mary Schmidt, another Natrona County homeowner who also said she was a previous California resident, spoke in favor of Prop. 13, which she said originally started out as a people’s initiative.

“Not much good has come out of California, but Prop 13 was one of the things that came out,” Schmidt said.

California assessors told consultants the implementation of this property tax system was lengthy and required additional state funding to hire on enough staff to make the system work, said Robert Lee, another TEAM Consulting, LLC, representative.

“[California assessment staff] say it is still very time consuming, trying to flesh out the sales, verify the sales and also attract new construction, new improvements,” Lee said. “While it seems like it may take less time and less manpower, the assessor’s office in California has found that’s not the case.”

What it would take to implement the new property tax

Results of the acquisition value study reported this type of property value tax system would not work under Wyoming’s current infrastructure, requiring changes both to state laws and the state constitution.

“[Stakeholders] were nervous about transitioning to an acquisition value study,” Capo said. “Transition from non-disclosure to a disclosure state is a big deal.”

With regard to revenue impacts, the report estimated a loss of $2.9 million to $587 million in tax revenue over 10 years per county, with a total $1.7 billion loss in revenue across the state.

The acquisition value-based system also resulted in tax inequities for homeowners, where “owners of identical properties will face differing property tax liabilities based on when they acquired their property.” 

Those who recently purchased a home would pay a tax based on the current market, while neighboring long-term homeowners “would be tied to the base year plus any inflationary factor applied.”

All the same, the study laid out a roadmap for legislators should they decide to move forward with the new property tax system, which consisted of three options for a base year to implement the tax on.

By the end of the meeting, legislators moved forward to draft a bill that would amend the state constitution and lay out the new property tax system to be discussed during the committee’s November meeting.