Wyoming Cities Seek Ability to Impose New Taxes
SHERIDAN, Wyo. (AP) — A legislative panel will continue to study the idea of giving local municipalities in Wyoming the ability to impose new, voter-approved taxes to replace the funding they now get from the state.
The Joint Revenue Committee has been tasked by the Legislature's Management Council to consider the idea during its interim meetings starting next month.
"They are looking ahead, and they are saying there is going to be a time where we don't have these direct distributions coming back to local governments anymore," Revenue Committee co-chair Rep. Mike Madden, R-Buffalo, said.
Local governments have been receiving aid from the state for years. During the 2018 budget session, the Legislature authorized the state to disperse $105 million in direct distribution funding among local governments over the next two-year budget period.
However, a downturn in state revenue from mineral extraction in recent years has left the state spending more than it is taking in from taxes on energy production.
Rick Kaysen, the executive director of the Wyoming Association of Municipalities, said his organization has been pushing for the Legislature to allow municipalities to create their own tax options for the past few years.
The organization released two municipal finance reports that determined Wyoming municipalities are more dependent on state aid than the municipalities in every other state in the country.
"When times are very, very good, and Wyoming has had some great years, then that works well," Kaysen said. "But when there are troublesome years, when the economy has a downturn, we understand the state can't print money, then municipal governments' hands are somewhat tied."
Rep. Mark Kinner, R-Sheridan and a member of the Joint Revenue Committee, noted that the committee has considered this issue before, during the 2017 general legislative session, but chose not to allow local governments to create their own taxes.
"The downside would be, if there is a downside, that local people may end up having to pay more," Kinner said. "The question becomes, do local taxpayers want to help fund the city and county governments?"
Kinner said if the state does allow for local tax options, he would hope their implementation is left up to local voters.
Kaysen said that has been the intention in advocating for the tax options.
"The idea here is to take tax initiative proposals to the voters to see what the voters may say on that," Kaysen said.
Even if the Legislature allows municipalities to create their own revenue options, it may still need to maintain some level of direct distribution funding because cities with small tax bases would find it hard to make up for a total loss of state funds.
"If we're going to have supplemental funding, it will probably have to be focused on smaller towns," Madden said. "But then the devil is in the details. How small does the town have to be before they can participate? There's no one-size-fits-all."