With additional mineral revenue predicted to fatten the state’s wallet this year the Legislature’s Joint Revenue Committee declined to introduce any proposals for new taxes.
Yet for years Wyoming lawmakers have being saying the same thing: Relying on minerals for 70 percent of the state budget is unsustainable. We must diversify our tax base.
Nevertheless, last week the Joint Revenue Committee, which spent the past 10 months exploring alternative funding sources to make up for a $250 million education shortfall amid a struggling minerals market, recommended nothing.
“We started off looking at the findings of this Select Committee on School Finance Recalibration, but it became pretty apparent early on the recalibration committee did nothing,” said Mike Madden, R-Johnson/Sheridan County, chairman of the House Revenue Committee. “It’s hard to ask my committee to vote for a tax increase for schools when there’s been absolutely no effort on the part of the recalibration committee to come up with any midpoint.”
There was some support for a 1 percent statewide lodging and hospitality tax that would have freed up $20 million in the state’s general fund, as well as levies on tobacco and alcohol totaling tens of millions. But a recent report estimating an additional $350 million in revenue this year, not counting unrealized capital gains from the state’s investment portfolio, convinced several members that voting for new taxes in an election year was not prudent.
“We have a balanced budget coming out of appropriations, and we’re going to have capital gains that we can’t count yet that will make up the funding difference,” said Rep. Andy Schwartz, D-Teton County, who serves on the House Appropriations Committee. “We also have $1.6 billion in the Legislative Stabilization Reserve Account, so it’s not the end of the world. This coming interim we’re just going to get after it again.”
Not as understanding
The revenue committee’s leadership was not as understanding as Schwartz.
“Banking on the fact that maybe the interest from our investment portfolio will bail us out or depending on the values of our commodities and mineral as they continue to decline is not healthy, and we’re not solving the problem,” said Sen. Ray Peterson, R-Big Horn/Park County, who serves as the chairman of the Senate Revenue Committee.
“I came to the conclusion last week,” he said, “that we will not be able to come up [with] good answers until we hit rock bottom. When our savings are completely depleted and we’ve proven to the people that we’ve cut as much as we can. Then we’re not going to have a choice and there are going to be some really tough decisions that need to be made.”
It was suggested that individual legislators might end up sponsoring revenue bills similar to what the committee looked at during the interim. But because individual bills require a two-thirds vote to get out of committee and onto the floor the outlook is gloomy, especially considering that the revenue committee has already voted them down.
While spending over $1 million in consulting fees without producing a single piece of legislation is never a good sign, for some there is a silver lining.
“I’m glad the revenue committee is not going to bring these bills to the floor,” said Rep. Marti Halverson, R-Lincoln/Sublette/Teton County. “There’s so much we can do in terms of streamlining our government.”
A top-heavy administration?
Halverson said another efficiency study conducted this interim, known as the Alvarez and Marsal report, showed that the state government employs twice as many supervisors and managers as the national average. She said that offers a chance to trim.
“There’s not a single program that cannot be delivered if we make these cuts,” she said. “All the money we can save in the mushy middle can go into boots on the ground and into our communities. Not bringing the revenue committee bills to the floor will force us to confront the Alvarez and Marsal report.”
No matter how much is cut by eliminating superfluous managers, however, the Legislature will have to face its greater funding issues at some point.
On the bright side, when the revenue committee picks up debate again in the interim it will have a head start, having spent the past year gathering data and studying the tax code.
“It wasn’t a complete loss,” Peterson said. “And the beautiful thing about Wyoming is it’s a citizens legislature. So people say, ‘I know you don’t lose your job,’ but honestly I don’t care. It doesn’t feed me like it does in Washington, D.C., so making those hard decisions shouldn’t be that difficult in Wyoming. Hopefully, we can get there before we hit bottom again.”




(1) comment
That’s OK, guys, I’ll be dead in a few years, so *I* don’t really care. Good Luck to the rest of you, though...
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