Serving the Big Horn Basin for over 100 years

Local governments: Cut taxes but don't cut our revenue

Via Wyoming News Exchange

DOUGLAS — With no fewer than 23 bills in the Wyoming Legislature that address property tax reform for homeowners, local government leaders are asking lawmakers not to cut their legs out from underneath them in terms of their budgets in the process of seeking tax cuts.

Converse County commissioners, Douglas City Council and Douglas School Board members are keeping a wary eye on the slew of bills before the legislature for that very reason.

That isn’t to say they oppose property tax relief for residents — quite the opposite. But, they all caution, the financial impact on city, town and county budgets across the state could be devastating.

The impact to the school reserve account would be severe with some of the proposed bills as well, while other bills would have less drastic results.

Basically, counties and schools generally rely more on property taxes than cities and towns, which see more revenues from sales taxes.

While that concern is real for some counties and municipalities who rely heavily on property taxes paid by homeowners, it’s not so true in Converse County, where the county has in excess of $110 million in cash reserves.

The City of Douglas has that and more – thanks mostly to abundant energy development. The city, for example, has been raking in nearly $1 million a month more in sales taxes alone than the council planned in its budget.

Nevertheless, the impacts to smaller or less energy-rich counties could be huge — or not so much if the legislature hangs on to a desire to “backfill” the lost revenues to the counties and cities and towns.

Some legislators have worked to do just that, but others are attempting to reduce or cut the backfill – and if that happens, officials warn, local vital services in some counties would disappear.

Commission Chairman Jim Willox, who returned from Cheyenne over the weekend, explained the Converse County commissioners are in sync with the Wyoming County Commissioners Association positions on these bills.

“In general, we support targeted property tax relief, but it needs to be part of a larger discussion. No (state) property tax funds go to the state general fund, only to the common school account,” Willox said. “What is being lost in the discussion is that any reduction in property tax only affects local governments and special districts. If the legislature enacts large property tax reductions without backfill, special districts and local governments across the state will see unsustainable negative impacts to their budgets.”

The legislature is also considering several other bills that reduce local revenues.

Any cut to local revenues has a direct negative effect to several areas including roads, law enforcement, fire and customer service.

Converse county in unique position on taxes

Willox also countered the idea that property taxes have exploded across the state. It’s true that housing values have rapidly increased in many counties like Teton, Park and Converse, and that in turn drives the property tax increases that are tied to market value.

But the tax rates themselves have been steady, he maintained.

The county, for example, is limited to a total of 12 mills, with special districts – which were created by a public vote in most cases – adding to the total slightly.

Schools get the bulk of property taxes throughout Wyoming, with 25 mils mandated per school district, 6 mils mandated per county and 12 mils going to the state school foundation account.

Cities and towns can levy up to 8 mills.

Willox, in particular, focused on Converse County.

“It is also important to note that the increase in property taxes in Converse County is only due to the value of houses going up. The actual tax rate in Converse County has come down, but the costs to provide the same level of service continues to rise,” he explained.

Meanwhile, over at WAM

Douglas City Manager J.D. Cox and other Douglas officials were also in Cheyenne last week. Much of their time was taken up with the legislature’s myriad, sometimes conflicting, ideas and a host of different issues. Property tax relief measures and their impact on local budgets were chief among them.

“Backfilling” any revenue losses because of property tax reform would be critical, Cox said.

Unlike his brethren in most other counties, Cox has less to worry about when it comes to his budget because the city only gets less than $800,000 in property tax money out of a $28.4 million general fund budget (numbers as of the end of the last fiscal year in July 2024).

Nevertheless, he remains worried about those brethren because impacts to one town could impact them all — sort of a domino effect.

Yet out of the 23+ bills dealing with property tax reform and other city issues which could impact the budget, the Wyoming Association of Municipalities (of which Douglas, Glenrock, Rolling Hills and Lost Springs are all members) have only marked two as ones they outright oppose:

House Bill 56, which would require cities to notify neighbors of a project up to 1,000 feet away, far more than the current notification limits. Opponents contend the notification expansion would simply drive up costs.

House Bill 202, which would require cities to meet certain timelines for approving or rejecting a land use request or permit.

WAM had a “support” checkmark on a single bill, Senate File 54, which would have allowed cities to construct electrical production facilities, but that bill failed in the Senate Corporations Committee.

In the case of 20 other bills in both chambers, WAM is taking a “monitoring” stance, Cox said.

Bills still being considered as of Jan. 29:

HB-0039 Property Tax Refund Revisions – Reduces the maximum income amount for eligibility for property tax relief from 165% to 145% of county median income. Passed the House; received for introduction in the Senate.

HB-0086 Public property and buildings-amendments – Requires that a public entity must use a Wyoming resident for contracts which are not required to be bid. Provides for exceptions when those services cannot be provided by a resident contractor. Passed the House Transportation Committee and is on House General File.

HB-0098 Property tax exemption for long-term homeowners-extension – Repeals the sunset date of the property tax exemption for long-term homeowners. Introduced and referred to Revenue Committee.

HB-0130 Homeowner tax exemption-amendments – Exempts 50% of the fair market value of a single family residential property that is used as a primary residence up to $200,000. Appropriates $176 million to backfill revenue to local governments and school districts. Introduced and referred to Revenue Committee.

HB-0169 Homeowner tax exemption-2025 and 2026 – Exempts 50% of the fair market value of a residential property up to $1 million. Appropriates $125 million to backfill revenue to local governments and school districts. Passed House, received for introduction in the Senate.

HB-0279 Property tax exemptions-order of application –- Specifies the order of application if multiple property tax exemptions apply to the same property and specifies that the exemptions shall be applied in the manner determined by the Department of Revenue. Introduced and referred to Revenue Committee.

HB-0282 Property tax acquisition value – Establishes a rebuttable presumption in favor of acquisition value for specified real property; clarifies the use, disclosure and confidentiality of sworn statements for specified real property. Reduces residential assessment from 9.5% to 8.33%. Introduced and referred to Revenue Committee.

HJ0004 Constitutional amendment – Veterans property tax exemption – This constitutional amendment would create a property tax exemption for the primary residence for veterans certified as having a permanent and total service-connected disability of 100 percent. Referred to the Revenue Committee. Passed House COW.

SF-0048 Business property exemption – This bill exempts the first $50,000 of ad valeum of business property. Passed the Senate; received for introduction in the House.

SF-0049 Tangible personal property – index and depreciation – Proscribes that tangible personal property be valued at fair market value and determined using valuation indexes and depreciation schedules prescribed by rule and regulation of the department or revenue. Passed Senate; received for introduction in House.

SF-0069 Homeowner property tax exemption – Provides a 25% exemption on the fair market values of a single family residential structure and associated improved land up to $2 million. Provides for a backfill to local governments for lost revenue. Passed Senate; received for introduction in House.

SF-0136 Homeowner tax exemption – Creates a property tax exemption of 25% of the fair market value of single family residential structures. Exemption applies to the first $2 million of fair market value. Appropriates $125 million to backfill local government revenue losses. Introduced in Senate and referred to Revenue committee.

SF-0153 Residential real property-taxable value – Sets the tax rate for residential properties at 9.5%. Introduced in Senate and referred to Revenue committee.

SF-0161 Residential property-acquisition value – Establishes a rebuttable presumption in favor of acquisition value for specified real property; establishes fair market value of residential real property based on the date the property was last acquired. Introduced in Senate and referred to Revenue committee.

This story was published on January 29, 2025.

 
 
Rendered 01/30/2025 18:05