The state legislative session begins Monday, marking the start of a month-long debate over how to tackle the financial challenges Wyoming faces in an era of declining revenue from coal, oil and gas.
Because this year like every even-numbered year is a budget session, lawmakers will spend much of their time and energy on balancing revenue and expenditures for the 2021-22 biennium.
With many legislators averse to enacting new taxes or increasing existing ones, belt tightening is typically the preferred tactic for closing funding gaps. One of the major proposed cuts this year is a $185 million reduction in tech expenses, Teton County Rep. Andy Schwartz said.
But a few prominent bills will focus on expanding the state’s fiscal horizons beyond the severance tax, federal mineral royalties and coal lease bonuses that have sustained Wyoming for decades. As those fossil fuel-based funding sources dwindle year by year, some legislators are looking for replacements.
“The focus is going to be: How do we work on growing the Wyoming economy that doesn’t put all our eggs in one basket?” Teton County Rep. Mike Yin said. “And how do we make sure that we have a budget that has a tax structure that is sustainable.”
Among this year’s bills are several reincarnations from sessions past, all of which failed to gain enough votes from anti-tax conservative lawmakers.
To introduce a bill during a budget session, either the House of Representatives or the Senate must approve it by a two-thirds majority.
Here are some the bills to be reviewed:
Corporate tax recapture
Similar to the National Retail Fairness Act of the 2019 session, House Bill 64 would impose an income tax of 7% on corporations with more than 100 shareholders.
The bill, meant to target large national and international companies that already receive major tax breaks from the federal government, is estimated to generate about $45 million for the Wyoming School Foundation fund in the next two years.
After intense lobbying from corporate lawyers, lobbyists and fiscal conservatives, the Senate Corporations Committee shot down this bill’s predecessor last year.
Tourism account funding
Though it resembles the statewide lodging tax bill of the 2019 session, this version has a couple of major tweaks.
It would still impose a 5% fee on lodging across Wyoming, with 2% going to local governments and the rest creating an independent funding source for the state’s Office of Tourism. In Teton County the state-mandated 2% would replace the 2% that local voters approved in the 2018 election.
The major change is that elected officials could increase the local tax by another 2%, for a total of 7%. That’s in contrast to the current system, under which the tax can be renewed or increased only by a vote of the electorate.
Another big difference — and a win for many opponents of the tax in Teton County — is an expansion of the purposes for which lodging tax funding can be used at the local level.
It was previously restricted to “promotion” in the strict sense of advertising. Now it can also be used for “staging of events, educational materials, and other specific tourism related objectives, including those identified as likely to facilitate tourism or enhance the visitor experience.”
Teton County’s delegation has pushed for that wording in the past to give the community more flexibility to pay for visitor impacts. Schwartz called it “one of my highest priorities.”
Last year’s bill passed in the House of Representatives but failed in the fiscally conservative Senate. Gov. Mark Gordon recently said this is the only new tax he will support.
Vacant home fee
This bill would allow counties to impose a fee on homes that sit unoccupied more than six months a year, giving Teton County a new means to address the housing shortage and property tax increases to which these empty residences contribute.
Though lawmakers roundly rejected the idea when Yin proposed it in November, some said they could be persuaded to approve it with a few changes.
The main modification Yin made was to exempt certain buildings, like those with a fair market value of less than either $500,000 or $1 million (at the discretion of county commissioners). He also exempted dwellings that are inaccessible for 90 or more days each year and any other buildings local elected officials choose to exempt.
Nearly all of the revenue — 95% — would go toward either a property tax relief fund or the affordable housing program, again at the discretion of county commissioners.
Though financial matters will be front and center this session, lawmakers will also consider an assortment of non-fiscal bills.
Among them is House Bill 22, a reboot of the legislation that proved controversial in Teton County last year. Though it didn’t get far in 2019 it would have eliminated the ability of local governments to levy fees on development to pay for workforce housing or require developers to build it themselves.
That housing mitigation policy has long been crucial in the town and county’s efforts to bolster affordable housing, bringing in nearly $15 million in the past two decades. That money has contributed to the construction of more than 250 homes, according to the town of Jackson’s Community Development Department.
The possibility of losing the tool spurred local elected officials to plan trips to Cheyenne throughout the session, in hopes of persuading legislators of the policy’s merits. They’ve also begun to discuss potential changes to housing mitigation rates.
At the same time, everyone seems confident that the bill won’t pass muster this year, and may not even be introduced, given the two-thirds majority threshold required in budget sessions.
“Andy’s been counting noses in the House, I’ve been counting noses in the Senate,” Teton County Sen. Mike Gierau said.
By their calculation, it seems the bill shouldn’t pose a threat this year.
But if it does pass, Gierau said, “I will work as hard as I can in the Senate to make sure it does not pass there,” where it would likely have the most support.
Following the lead of most states in the nation, including all but one of Wyoming’s neighbors, state Democrats have tried for years to pass a bill that would extend Medicaid eligibility to anyone earning up to 138% of the federal poverty level.
That would grant coverage to an additional 19,000 people in Wyoming, according to the Department of Health. The federal government will foot 90% of the bill, but critics fear the state could have to pay more in the future.
Schwartz sponsored the bill last year and planned to do so again this year, until the Revenue Committee sponsored it. He sees an upward trend in support for expansion.
“It’s incrementally doing better,” Schwartz said. “I think it’s a combination of people understanding it better and also seeing the impacts of rising health care costs in Wyoming.”
Teton Pass trailer fines
Despite restrictions on crossing Teton Pass with a trailer in the winter, many drivers do it anyway (see page 7).
Gierau plans to run a bill authorizing a new strategy for penalizing drivers who disobey the ban. Essentially, he wants to raise fines and use photographic evidence to capture those who come in overweight on the road’s weigh-in-motion scale.
The scale would trigger a flashing warning sign telling drivers that they have one chance to turn around, “then you’re gonna get the crap fined out of you,” Gierau said.
“Someone’s going to die up there, and it’s going to happen sooner rather than later,” he said. “I think the only way to stop it is to put a serious fine on it, so now all of a sudden it’s more advantageous for them to drive through the canyon than to go over the hill.”
This bill, sponsored by Yin, would prohibit internet service providers like Comcast, CenturyLink and Charter Communications from selling their customers’ data without written permission.
Yin compared it to laws preventing phone companies from selling call logs. In the same way, ISPs would no longer be allowed to sell internet users’ data, including browsing history, application use and information about their location, finances and health.
“I think this is a good first step in tackling data privacy in Wyoming,” he said.