Wyoming’s cities are at odds with counties and smaller towns over changing the law to give municipalities the power to tax themselves.
As it stands, local governments can ask their voters to approve increasing the sales tax to pay for government services. But those taxes — called the general purpose tax and the specific purpose excise tax, or SPET — must be approved across entire counties.
That means that cities have no way to raise more revenue for their own projects without appealing to voters outside town limits. Those voters are less likely to benefit from town projects and therefore may be less interested in voting for them.
State lawmakers heard pleas from both sides as they discussed the local-option tax at a meeting of the Joint Revenue Committee last week.
David Fraser, director of the Wyoming Association of Municipalities, which is advocating for a bill that would give cities more control, lauded it as a way for voters to have the most direct say in which taxes they pay and for which reasons they pay them.
“We’re not asking you to raise a tax,” said Fraser. “What we’re asking is for you to enable city councils to ask their voters if they can.”
But the Wyoming County Commissioners’ Association, along with elected officials from some small towns, oppose the idea. They worry that they’ll be at a disadvantage once the residents of cities — with their outsize populations — have become self-reliant.
Without the support of those metropolitans at the ballot boxes, it could be difficult for rural areas with virtually no tax base of their own to find funding for much-needed upgrades to infrastructure and utilities.
“If the optional municipal tax exists and is enacted in one of the larger municipalities,” said Laramie County Commissioner Amber Ash, “what incentive will those residents have to support projects in the county, or other smaller communities?”
Several representatives of those counties and towns also noted that people who don’t live in cities do much of their shopping in those commercial hubs. If more of their tax money goes solely to the cities, they will see less of it in the form of public projects in their own communities.
The subject of optional municipal taxes has come up repeatedly over the years, and lawmakers are eager to find a solution that works for counties, small towns and cities alike — especially as state lawmakers continue to vote down other bills designed to give local governments more revenue options, and as the state’s broader financial situation grows more precarious.
“We know there’s a problem,” said Rep. Dan Zwonitzer, R-Cheyenne, chairman of the Revenue Committee. “We have done nothing as a Legislature recently that’s really bailed you out of the problems that I know some cities and towns in the state have.”