Permanent fifth cent tax?

Proposed bill would raise Park County’s sales tax rate to 5 percent

Posted 10/10/19

At the request of local government leaders from across Wyoming, lawmakers are drafting a bill that would raise the state’s sales tax rate from 4 to 5 percent.

Voters in 21 of …

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Permanent fifth cent tax?

Proposed bill would raise Park County’s sales tax rate to 5 percent

Posted

At the request of local government leaders from across Wyoming, lawmakers are drafting a bill that would raise the state’s sales tax rate from 4 to 5 percent.

Voters in 21 of Wyoming’s 23 counties have already authorized a fifth cent of sales and use tax, with the additional cent used to fund general county and municipal government operations; voters decide whether to re-authorize the tax every two or four years.

However, a bill proposed by the Wyoming Association of Municipalities and the Wyoming County Commissioners Association and now being considered by the Legislature’s Joint Revenue Committee would make that fifth cent permanent, no longer requiring voter approval.

Given that most counties already have the 1 percent general purpose tax in place,“this is not a monumental leap, if you will,” Jerimiah Rieman, executive director of the commissioners association, told lawmakers last month. “But there are a couple of exceptions.”

Those two exceptions are Park and Sublette counties, where voters have not approved a general purpose tax for local governments. If the bill proposed by the municipal and county associations was to pass the Legislature, Park County residents would start paying an extra 1 percent in sales and use taxes without ever approving the new tax.

At a meeting last week, Commissioner Jake Fulkerson suggested it would be an unpopular bill for the Legislature to pass.

“[If] you want to see witches get burned in the streets of Park County, force that down our throats without [us] voting on it,” Fulkerson quipped.

There were also indications that lawmakers have concerns of their own. The Joint Revenue Committee voted to draft a bill along the lines requested by the local government groups on roughly an 8-5 vote — but not before expressing misgivings about making the fifth cent permanent.

Rep. Dan Laursen, R-Powell, was among the committee members who voted against drafting a bill; he doesn’t like the idea of imposing the additional sales and use tax without voter approval.

“I really want to make sure that the people still have a chance to vote on it; the cities and counties ought to be able to come with a good reason [for the tax],” Laursen said in a Tuesday interview.

The committee will discuss the idea further at their November meeting, but Laursen said he doesn’t know how far the bill will go; he noted that it will take a two-thirds vote for any measure to be introduced in the upcoming budget session.

“A lot of these [proposed bills] might be a lot of fluff and talk,” Laursen said.

Fulkerson offered similar thoughts on the proposed legislation last week, predicting that, “Given the Legislature’s backbone to increase taxes, I don’t think that’s going to happen real quick.”

But regardless of what lawmakers do, commissioners did indicate that they’re giving some serious consideration to pursuing a 1 percent general purpose tax from local voters.

“I think that’s something we’re going to have to look at in the future, possibly,” Park County Commissioner Lloyd Thiel said at last week’s meeting.

Unlike the specific purpose taxes that county voters have approved in recent years — to build the Park County Law Enforcement Center, the Powell Aquatic Center and, most recently, various infrastructure projects — a general purpose tax would be divided up between Park County, the City of Cody, the City of Powell, the Town of Meeteetse and the Town of Frannie for those governments to spend however they see fit.

Park County and municipal leaders sought a general purpose tax in 2012 and got a clear “no” from voters, with nearly 61 percent opposed. Local residents still appeared wary of the idea in a 2016 survey, leading commissioners and councilors to instead pursue another specific purpose tax.

But the times may have changed since then.

With the county in the budget crunch and lawmakers considering the idea of permanently imposing a general purpose tax across the state, “I think it’s something we need to start thinking about,” Thiel said.

Later in the discussion, Thiel remarked that he “shouldn’t have said the ‘f word’” — referring to a fifth cent of sales tax — and clarified that “I don’t think any of us support raising taxes.”

However, he suggested that asking voters for a “general purpose” sales tax might be necessary to maintain the county’s current services.

“We need to be realistic,” Thiel said.

Chairman Fulkerson suggested that the lack of a tax was one reason why the county wound up needing $1.2 million from savings to balance its current budget. Fulkerson also noted that Park County is in the minority: He recalled a Sheridan County commissioner being shocked to learn that Park County didn’t already have a general purpose tax in place.

While the prospect of a new, 1 percent tax might be the big news for Park County, that would be something of a side effect of the legislation. The bill’s primary aim is to enable municipalities to pursue a 1 percent sales and use tax that’s only applied within city limits (or to the city’s residents when they shop elsewhere). Under the proposal made by WAM and the WCCA, municipalities would only be able to seek the extra in-town tax after local officials decided whether to pursue a specific purpose tax.

City leaders from Lander and Rock Springs both spoke in favor of the proposal bill at last month’s Revenue Committee meeting, saying they’d like the ability to seek additional revenue.

The Revenue Committee next meets Nov. 11-12 in Cheyenne.

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