Tuesday, February 28, 2017

HB236: The Tax Hiker's Last Stand

Update 2: HB236 passed third reading in the Senate, 25-5. An amendment proposing a one-percent sales-tax increase failed on third reading. It now remains to be seen how the Senate will negotiate its differences on this bill vs. the House version, especially on the sales-tax increases that are still in the Substitute House version.

Update: There is a statement circulating that the Senate has removed all tax increases from HB236. However, the engrossed version still suggests a 0.5 percent sales-tax increase (page 17, line 12). If this survives third reading, and the Senate and the House have to compromise on the final version, logic dictates that the compromise will include a tax increase of some kind, probably somewhere between 0.5 and 2.5 percent. With this in mind, all that is said below about HB236 and the consequences of sales-tax increases, is still valid.
One after the other, the big tax-hike bills have died: the bills to raise tobacco taxes and alcohol taxes; SF131 the Highway to an Income Tax bill; and yesterday, thankfully, SF165 and its proposed food tax and destructive tax on services.

But our legislators have not given up.

SF165: The Tax-Your-Life Bill

Update: SF165 is allegedly dead. However, let this article stand as a reminder to all our elected officials that it is time for them to abandon any and all efforts at solving our state's fiscal crisis through higher taxes.
Yesterday I pointed to the proposal of a new food tax in Wyoming. I explained that the tax on groceries and beverages for off-premises consumption:

Monday, February 27, 2017

Whip the Poor: Lawmakers Want Food Tax

When people ask me what I do for a living, I tell them that I spend all my days trying to convince politicians that it is a bad idea to raise taxes. Then I tell them: "Trust me, it's a full time job, and then some".

Last week I got yet another affirmation of how true that statement is. Barely had SF131 The HIT Bill died in House Committee of the Whole, until there is a new proposal on the table for higher taxes. On Saturday, KGAB reported:

Saturday, February 25, 2017

A New Chapter for Wyoming

Dear fellow Wyomingites - we can all breathe a little bit easier now. SF 131, the HIT bill (Highway to an Income Tax) died with due dignity on Wednesday February 22. Here is the vote count:

Representative(s) Blake, Bovee, Burkhart, Byrd, Connolly, Court, Crank, Eklund, Eyre, Freeman, Furphy, Gierau, Haley, Harshman, Henderson, Kirkbride, Madden, Miller, Paxton, Pelkey, Schwartz, Sweeney, Zwonitzer

Representative(s) Allen, Barlow, Biteman, Blackburn, Brown, Clausen, Clem,Dayton, Edwards, Flitner, Gray, Greear, Hallinan, Hunt, Jennings, Kinner, Larsen, Laursen, Lindholm, Lone, Loucks, Macguire, Nicholas, Northrup, Obermueller, Olsen, Piiparinen, Pownall, Salazar, Sommers, Steinmetz, Walters, Wilson, Winters 

Representative(s) Baker, Halverson, Mckim 

On behalf of all taxpayers in our great state: a big Thank You to those who voted to put an end to this bill.

Now, though, the real job starts for our state.

Thursday, February 23, 2017

Structure of the Wyoming Economy, Part 2

[Thank you to the two legislators who inquired about this data. One of the inquiries also asked about earnings. Please be patient. It takes time to process relevant data. I will get there...]
After yesterday's interstate comparison, here is a closer look at the jobs situation in Wyoming, broken down by county. We can draw three conclusions from the data reported below:

a) We depend heavily on government in almost every county;
b) We are losing private-sector jobs in a way that is totally unsustainable; and
c) The minerals industry is only partly responsible for that job loss.

Wednesday, February 22, 2017

Structure of the Wyoming Economy, Part 1

In response to a couple of reader requests I am going to spend this blog article, and the next one, on explaining the composition of the Wyoming economy. This may seem to be about as fun as to watch a cactus grow, but it is actually an important piece of information, especially if we are going to have a conversation about the future of our state's tax system - and, most important of all, about what role government should, and should not, play in our state. (Hint: the data examined below shows that our government sector is almost 42 percent larger than the national average.)

This article looks at Wyoming as a state, compared to a couple of other natural-resource rich states, and to the country as a whole. 

Tuesday, February 21, 2017

Wyoming's Vanishing Tax Base

As the legislature enters the final stretch of the 2017 session, they still have some serious work to do, especially on the tax-policy front. There is still a risk that they will add 0.5 percent to the sales tax through HB236, the School Funding Omnibus bill, and SF131, also known as the HIT Bill (Highway to an Income Tax). HB236 was referred to the Education committee on February 13, while SF131 was placed on General File on February 15.

Yesterday I suggested a modification to HB236 (and its Senate equivalent, SF165) which would contain the costs of our education system over the short term and neutralize the demand for higher taxes. However, even if the legislature would make the necessary changes to HB236/SF165, there is still the threat from SF131 The HIT Bill.

Monday, February 20, 2017

How to Fund Schools Without Higher Taxes

Apologies in advance for a long article. However, this topic is important, and it needs a context. 

On February 18, the Casper Star Tribune declared, plainly:
Lawmakers have spent weeks debating a pair of sweeping education funding bills designed to address a looming budget shortfall that could hit $1.8 billion by early next decade. Before we get to education funding, let me make one point about the deficit itself. 
It is interesting to see how the narrative about the deficit has evolved in the past eight months. Just as I have foreseen:

Friday, February 17, 2017

Wyoming Private Jobs Worst of All States

Sorry to keep harping on this depressing news, but so long as there is even a remote chance that our state legislators will pass a bill this session that raises taxes, or opens the door for higher taxes, I have to keep pointing out what a thoroughly bad idea that would be.

This past week I have reported on the employment trend in the private sector of the Wyoming economy. The numbers did not present a very optimistic picture of our state; the only silver lining is that the minerals industry seems to be stabilizing at a substantially lower level of operations and employment. However, with six out of ten lost private-sector jobs, the big question is to what extent the stabilization in minerals jobs is going to be outweighed by continued losses elsewhere.

Another way to look at the employment situation in Wyoming is to compare our state nationally.

Thursday, February 16, 2017

Wyoming County Employment Data, Part 2

Yesterday I reported that private-sector employment is down, year-to-year, in 18 of 22 counties (no data from Niobrara). Together with the numbers I presented earlier this week, showing that six out of ten jobs lost in the private sector are from outside the minerals industry, the county employment numbers are a stark reminder that our state's economic crisis is no longer the minerals-only crisis it was originally - and is still often being portrayed as.

Today, we can add private-sector wage earnings to the picture.

Wednesday, February 15, 2017

Wyoming County Employment Data, Part 1

In yesterday's article I reported the latest jobs numbers for Wyoming as a whole. It was not fun
  • In two years the private sector has cut almost 17,000 jobs;
  • Six out of ten jobs lost in the private sector are not minerals-industry jobs;
  • Private-sector employment has been shrinking for 20 months in a row now.
These statewide numbers are frightening in and by themselves. However...

Tuesday, February 14, 2017

The Loser State: 17,000 Jobs in Two Years

The Bureau of Labor Statistics has released preliminary employment numbers for December 2016. The good part of this is that we can now tally up another calendar year and compare its jobs trend to previous years. 

The bad part is the numbers themselves. From December 2014 to December 2016, Wyoming has lost 17,000 - seventeen thousand - private-sector jobs.

Monday, February 13, 2017

Tide Is Turning Against Higher Taxes

The conversation about the state budget is slowly changing. Tax hikers, who came in to the session very confident of their ability to inflict higher costs on families and businesses, suddenly find themselves fighting an uphill battle. There is growing interest in real, long-term spending reforms as an alternative to higher taxes.

This is good news; it is beginning to look as though fiscal conservatism and common sense might prevail. The fight is far from over, but there is one very good sign that the air is slowly leaking out of the tax-hikers balloon: they are beginning to sound repetitive and, frankly, stale in their arguments.

Thursday, February 9, 2017

Budget Analysis 3: State Workforce Cost Cap

After yesterday's blog article about the basic difference between short- and long-term spending reforms, it is time to focus on actual reforms of the long-term kind. Thank you, readers who have reached out with questions about this issue - your feedback is encouraging!

For the reader who wants more in-depth insight into the need for long-term reforms in government spending, I have put up a separate page on this blog

Let me first make clear that there is no contradiction between short- and long-term spending reforms.

Wednesday, February 8, 2017

Budget Analysis 2: Spending Cuts

This the second budget-analysis article is focused on long-term, permanent spending cuts. Of which there are none in the governor's budget.

But first, and on a related note, some good news:

Tuesday, February 7, 2017

Budget Analysis 1: Bare-Bones Comes Clean

Never Bark at the Big Dog. The Big Dog Is Always Right.

Governor Mead, the man with the "bare bones" budget, has come clean. He now admits what I have been saying for months, namely: our budget crisis is not an education-funding crisis. It is an across-the-board fiscal crisis. 

Many thanks to Governor "Bare-Bones" Mead. I always appreciate an opportunity to point out that I have been right all along... 

Monday, February 6, 2017

The EAD "Funding Gap" Chart

Wyoming is a great place to live and raise your kids. It is quiet, peaceful and for the most part the cost of living is low. Compared to many other states, our schools are good and safe. Even though we have our fair share of drug problems, they are relatively non-intrusive on the educational and social experience that our kids have.

We have access to decent health care and our roads are in relatively good shape. For the most part, the Cowboy State is a great place to live.

However, as a direct consequence of the fiscal incompetence engulfing our legislative leadership and - sadly - the executive branch, our state's attractiveness is in jeopardy.

Saturday, February 4, 2017

More on HB236 and School Choice

A blog reader explained that my article on the school-finance omnibus bill made the impression that the ban on "alternative" schools is a ban on private schools. Constitutionally, the State of Wyoming cannot ban private schools, the reader pointed out. 

Technically, the reader is correct: the state cannot ban private schools. In retrospect, my article would have benefited from spelling out that point. That said, the discussion about school choice is not so much a constitutional one as it is a matter of finances.  

Friday, February 3, 2017

Who Is Wyoming's Biggest Tax Hiker?

Update: Representative Laursen has responded to this article. His comment is posted, unedited, at the end. 

Of our 60 State Representatives and 30 Senators, who is most eager to raise your taxes? To answer this question I reviewed House Bills and Senate Files that propose some kind of tax increase. The definition of a tax increase is:
  • a higher rate on an existing tax; 
  • the introduction of a new tax; or 
  • the expansion of the base for an existing tax (such as forcing land owners to count previously tax-exempt land as taxable property).
I picked out the bills for this session that propose any form of tax increase, then counted the sponsors and made a list of who wants to raise our taxes the most. The result is reported below.

Thursday, February 2, 2017

HB236: The War on School Choice

Today, the Governor's budget was assigned its bill number, HB0001. This is, of course, the big item for the session, but there are many other bills that set policies in key areas. One of them is HB236, the school-finance omnibus bill. 

Currently, HB236 is on the desk of the Education committee. It is likely to make it out of there in essentially the same shape as it went in, sponsored as it is by the House Education Committee. That would, however, be unfortunate, for two reasons:

Wednesday, February 1, 2017

The Good, The Bad, The Ugly: Update 2

After yesterday's review of Senate Files, today we take a look at the 304 bills on the House side. As with yesterday's overview, the selection criteria for the bills listed below have more to do with the thinking behind the bills than their potential eventual success. Once the session is over, we can sum up the actual impact of the bills that made it past the governor's pen. Right now, though, what matters is to get an idea of the prevailing strategic thinking among our elected officials - especially with reference to our state's economic crisis.

One final point before we get to the bills: