In the narrowest of votes Monday, the Wyoming Senate approved the last thing anyone expected: a new tax.
Sixteen of the 30 lawmakers were swayed to enact a statewide lodging tax, imposing a 5% charge on hotel stays. Though adding or increasing taxes has long been anathema to members of the uber-fiscally conservative body, enough of them justified the move as a way to expand Wyoming’s budget amid the decline of fossil fuel revenue.
“You want to diversify the economy?” Teton County Sen. Mike Gierau asked just before the vote on Friday. “We talk about it all the time. This is your chance.”
House Bill 134 would require each county to collect the lodging tax, with 2% going to local governments — that would replace Teton County’s current 2%. The balance would go to an independent funding source for the state’s Office of Tourism to promote Wyoming to visitors. The bill also allows local communities to increase the tax in their jurisdictions by another 2%, for a total of 7%.
Having passed both houses of the Legislature, it now needs the signature of Gov. Mark Gordon, who has said it is the only tax he will support.
“Tourism represents an enormous opportunity to grow our economy,” Gordon said in a statement after the Senate vote. “I want to commend those who supported this legislation, which reflects a true agreement between industry and state government.
“Wyoming is competing with our neighbors for visitors and tourism dollars,” he said. “We must continue to stimulate tourism in all regions of our state, not merely those that receive heavy visitation.”
Here to stay
Many of the areas that receive heavy visitation could do without the lodging tax, and the state mandate would remove their ability to get rid of it.
During the 2018 election, about 60% of Teton County voted to renew the tax, but it was a major point of contention for residents who felt it would only attract more people to an already stressed community and ecosystem. However, the county’s legislators have pushed for changes to the 2020 bill that they hope will make it more palatable.
As it stands, 60% of the county’s lodging tax revenue goes to the Travel and Tourism Board to promote Jackson Hole, and the rest goes to the town and county to help pay for the effects of tourist visits.
The definition of “promotion” for the Travel and Tourism Boards portion is currently restricted to “advertising.” Rep. Andy Schwartz, in an effort to give Teton County more flexibility to offset visitor impacts, has expanded that to include “staging of events, educational materials, and other specific tourism-related objectives, including those identified as likely to facilitate tourism or enhance the visitor experience.”
That last clause was struck from the bill, but Schwartz said the rest of the sentence still offers enough flexibility.
“‘Other specific tourism objectives’ covers a lot of ground,” he said.
Another amendment to the bill removed a section that would have allowed local elected officials to increase the tax themselves. Now the optional 2% will be subject to the same rules as the existing lodging tax is now, meaning it can be enacted only by a vote of the electorate.
Turning the tax tide
Last year a similar bill failed 7-19 in the Senate. The year before that, it died before legislators even considered it. The beginning of this session showed signs of progress: The Republican party had rallied a few more votes but still fell short of a majority.
Throughout the past month, though, traces of a shift in conservative thinking emerged, as historically staunch tax critics reconsidered the wisdom of further starving the state. That’s even more remarkable considering it’s an election year, when politicians typically try to stay in the good graces of their constituents, many of whom object to new taxes on principle.
“This is probably the toughest vote I’ve had since I’ve been here,” said Sen. Ogden Driskill, who was elected in 2011. “I haven’t voted for a tax increase in 10 years.”
To be sure, the bill had its opponents. Though it’s hailed as “the tax you don’t pay,” some said it could be a burden to in-state travelers. Others worried it would benefit only the major tourism hubs, like Teton County, while leaving behind lesser-known Wyoming regions.
“All of this tourism will definitely help somewhere, somebody, somehow,” said Sen. Dan Dockstader. “But it’s missing the small rural areas.”
Still others argued the state government shouldn’t use tax money to promote private industry. Doing so, they said, would set a precedent for other industries to request the same assistance.
“Prepare for the sound of thundering hooves, of the pigs running to the trough,” Sen. Bo Biteman said. “This is going to open the floodgates to anybody and everybody who wants to put their marketing burden on to the taxpayers. This is a slippery slope, ladies and gentleman, and this is not what limited government is all about.”
The bill’s supporters countered that the state helps many private industries in many ways, and that tourism — Wyoming’s second largest — needs a boost to keep pace with neighboring states.
Once the Office of Tourism’s expenses are handled independently with lodging tax revenue, that will remove some pressure from the state’s already tight budget. Those who voted for the tax called it the first step toward allowing tourism to support Wyoming in a more significant way.
“This industry deserves your vote of confidence today,” Gierau said. “For those of you who think this is a tough vote philosophically, I promise you that in a day not too far away you’re going to regard this as one of your best votes. You’re going to regard this as a vote you can be proud of.”