Lawmakers reject acquisition value based property tax

Via Wyoming News Exchange

CHEYENNE — A bill draft that proposed an acquisition value-based property tax system narrowly failed to advance in the Legislature’s Joint Revenue Committee on Monday. The proposed legislation divided Wyoming lawmakers and residents over its passage — one side argued the bill draft was a necessary step in providing much-needed property tax relief for homeowners, while others said the unintended consequences of the property tax system did more harm than good. 

The committee ultimately voted 7-7, which means the bill draft will not advance to next year’s budget session.

An acquisition value- based property tax system limits the value of the property to its original market value when it was purchased, with a limited annual tax increase. Under Bill draft 317–Property tax acquisition value, this proposed tax increase was capped at 5% per year.

For homeowners in Wyoming who have seen their property taxes increase by more than 100% in the last couple of years, a common situation for many residents, according to public testimony, the new property tax system seemed like a godsend. Rep. Bill Allemand, R-Midwest, who testified during public comment, acknowledged the bill wasn’t a perfect solution, but he said it was a start.

“We’ve got to do something to help these people,” Allemand said.

Critics of this method for calculating property tax, however, said it would create major tax inequities across the state. Nicer homes could get huge tax breaks from the proposed tax system, some lawmakers argued.

“Somebody down the street is going to look at my property and find out I’m being taxed half of what they are, even though my house is three times as big,” said Sen.

Stephan Pappas, R-Cheyenne. “The inequities are big in this system, and I think that’s why you see only California doing this.”

California is the only state in the country to currently have an acquisition value- based property tax, which was passed in 1978 as Proposition 13 by the state’s voters. Since adopting this tax system, the Golden State has attempted to change its property tax system through other proposed ballot measures, which have all failed to gain voter approval.

The most recent attempt was California Proposition 15 during the 2020 election, which proposed assessing commercial and industrial properties at market value, while leaving residential properties assessed at purchased value. The proposition narrowly failed to pass, with 51% voting “no” on the measure.

“If you do decide to go to acquisition, remember you’re stuck with it,” said Pat Meyer, assessor for Park County.

Meyer noted that had Proposition 15 passed, California would have received up to $5 billion annually for public education funding, with another $10.3-12.6 billion in revenue for local municipalities.

“(Voters) want their house to stay right where it is,” Meyer said.

Unintended

consequences 

A handful of experts who testified before lawmakers, including Converse County Assessor Dixie Huxtable, said the proposed acquisition value- based property tax did not provide the relief lawmakers were looking for.

“In our opinion, (this bill) is not property tax relief, but a change in methodology. For some people, it may be property tax relief, for some people it may not,” Huxtable said. “In a lot of cases, the value may go up.”

Rep. Liz Storer, D-Jackson, who voted against the bill by the end of the meeting, said the proposed property tax system would most likely benefit wealthier homeowners.

“I’m already thinking about unintended consequences when we make such a radical change as this,” Storer said. “The unintended consequences in our community in Teton County would be a significant tax break for many of our wealthier citizens who have very valuable homes.”

The representative said she was in California when Proposition 13 was passed, and recalled other inequities the property tax system created, such as making it more difficult for younger people to buy homes and incentivizing older residents to stay in their homes. Huxtable agreed with Storer, saying that higher values of homes and land would likely result if the bill draft passed into law.

“It’s no secret that Wyoming is losing a lot of our young people, and that may make it more difficult for them,” Huxtable said.

‘Torturous’

property taxes 

A majority of those who commented before lawmakers on Monday offered personal anecdotes about unaffordable property taxes that have risen over the past few years. Sen. Bob Ide, R-Casper, said he was surprised to hear from one resident that her property taxes rose 123% in the last two years.

For Cheyenne resident Gary Brown, and many others who spoke, this number was hardly surprising.

“Senior citizens in my church have not paid their property taxes for two years,” Brown said. “They can’t afford it.”

Ide said the state has seen up to an 80% increase on property tax revenue, which fluctuates based on the fair market value of the property and is out of the hands of lawmakers.

“They’re getting tortured here in Wyoming,” Ide said. “We need to do something about it.”

Committee members seemed to agree rising property taxes were hurting Wyoming residents, but the matter of providing statutory relief has been a years-long debacle. A majority of bills related to property tax relief have either been killed or “watered down,” as Brown put it, and residents who attended the meeting said they were getting frustrated.

“The entire state is angry, and we are watching,” said Cathy Raney, a homeowner. “We want something done to give us relief from the neverending taxing and spending.”

This story was published on November 15, 2023.