Cities want more financial independence

CASPER — As state lawmakers wind down committee work for the 2019 interim session, Wyoming’s cities and towns are beginning to prepare for battles over a number of issues in Cheyenne this winter.

The overarching theme: The need for the state to step up and allow municipalities to help themselves. In meetings across the state this month, cities and towns have been pulling together a wish list of legislative changes big and small that they would like, concerning everything from stabilizing their often unpredictable revenue streams to retaining primacy over housing issues.

The concerns being expressed by municipalities come amid a time of budgetary uncertainty for Wyoming, as well as a period when municipalities have found themselves increasingly on the defensive in the Legislature.

“There were at least four or five pieces of legislation [last year] that were just blatant preemption of local control,” Cody Mayor Matt Hall said in an interview.

“It certainly has that kind of feel sometimes where we’re battling against a lot of bills as opposed to working with people trying to help us solve our problems,” he added.

For municipal governments across the state, efforts to guide their communities’ destiny often rely on adhering to a very narrow framework of statutes and funding methods that can create barriers to solving critical issues. In the 2019 legislative session, for example, municipalities and state lawmakers found themselves at odds with one another over legislation on a number of issues, most notably with bills seeking to preempt local planning decisions in places like Teton County.

“That boundary always gets pushed, and I don’t think Wyoming’s unique in that,” said Justin Schilling, a members service manager with the Wyoming Association of Municipalities. “You’re always going to have this idea of the statehouse stepping on the toes of cities and towns with legislation that’s sort of overarching and seeking to control what has traditionally been controlled by the municipality.”

While the poster child for the division between state and local government has been best illustrated in communities like Jackson – whose town council cancelled a meeting next week so its members could lobby the Wyoming Legislature over a bill some think could gut its affordable housing program – funding the cost of government seemed to constitute the lion’s share of the concerns shared by communities across the state.

At a time when lawmakers are looking to institute budget cuts to keep pace with the state’s declining revenues, many cash-strapped municipalities – who depend on a top-down funding model to pay for everything from paving their streets to repairing sewer systems – find themselves straining against a short leash, limited by a constitution that tightly limits cities’ ability to tax themselves.

In Laramie on Tuesday, local officials expressed concerns that the state’s direct distribution funding model had shorted their community by a significant amount in recent years and, if kept as-is, could leave local officials without the tools necessary to raise the type of money needed to maintain and expand the services demanded by the growing community. In Casper, officials in city hall and in the local school district pondered how to find more money at the local level to pay for necessary services.

Similar discussions have been held in communities like Sheridan in recent weeks as well, with Sheridan County Commission Chairman Tom Ringley noting that any reductions to the 14 percent of the county’s budget coming from federal and state funding sources could create difficulties, according to the Sheridan Press.

“Wyoming’s counties have the least financial freedom of any state when it comes to generating revenue,” Schilling said. “We kind of constantly have to keep going to the state with our hand out. They really don’t like that, but it’s their program to change or to leave the way it is. So it definitely creates a weird power dynamic where everybody’s kind of on an odd short leash.”

While some communities – like Cheyenne – have a density of taxpayers that can support the construction of amenities that can spur economic development, the lack of financial independence for communities has led to a system where the state can often pick winners and losers, said Gillette Mayor Louise Carter-King, creating an adversarial relationship between Wyoming’s communities that are all fighting for a limited pool of resources.

“I just think we’ve fallen back a little backwards,” said Carter King. “We need to keep marching forward and continue to be the great state that we are. We all have to work together on this and not against each other, because I don’t want to be against something that’s happening in Buffalo or Casper because we need it all. But when there’s so few dollars to fight for, that’s what you end up doing.”

While the simple solution for large communities may lie with more taxing authority, Wyoming’s small communities – many of whom lack notable tax-generating businesses – have come to rely on top-down models like direct distribution and could be negatively impacted if the status quo were to change: a concern that has stymied discussions on revenue-stabilizing proposals like a permanent optional sales tax for municipalities, which passed out of committee last week.

As the Legislature is likely to closely study the amount of direct distribution money that will be made available, supporters of optional municipal taxes may find themselves needing to tread lightly.

“That’s always a balancing act for us and for our board and our leadership when we consider these things,” said Schilling. “We know that things that could be a potential win for our larger municipalities could be fatal for some of our smaller communities if there was a large cut to that direct distribution money.”

Momentum for reform could be growing, however, particularly as Wyoming – in a declining revenue environment – is seeking to cut as many obligations from its general fund budget as possible. Amid the decline of the coal industry, Schilling noted that the state is going through a metamorphosis, potentially creating opportunities for municipalities to gain some footholds in the machinations of state government.

One of the most obvious changes has been the increasing level of cooperation between his organization and the Wyoming County Commissioner’s Association – two advocacy groups with oftentimes different agendas that have significantly increased their collaboration with one another this year. Then there are the efforts of the community leaders themselves, who see their representatives at the state level as a pathway to communicating the need for more local control.

But that can be an imperfect system, Carter-King noted.

“Sometimes we get that help we need,” she said. “Because we know, once they leave here, they get lobbied for lots of people down there.”

But something needs to change, mayors say. Though Wyoming’s status as a home rule state is — like many other states — somewhat limited in scope, local officials across Wyoming are starting to take issue with the amount of influence state government actually has on their abilities to manage the operations of their communities, controlling both their funding streams and, increasingly, the types of decisions they make in shaping the futures of their towns.

They just hope someone will listen.

“The way things are structured, we’ve got to come to the state pretty much whenever we start talking revenue,” said Hall. “And then you’re pretty much rolling the dice. You get some legislators that are very thoughtful and understanding and will help you draft legislation, and then you get others that for their ideological reasons are very, very set against any revenue or tax generation, even if it’s for the good of the future.”