Wednesday, November 1, 2017

Your Property Tax Will Go Up

Here you go, folks:
AN ACT relating to ad valorem tax; increasing the property tax assessment rates for property used for industrial purposes and for all other property as specified; providing for the creation of and distribution of funds to the property tax refund program account; providing sunset dates; specifying applicability; and providing for an effective date.
This one is not yet listed under the Revenue Committee as a bill draft, but it is written to be sponsored by the committee. Currently known as 18LSO-0144 Working Draft, this bill wants to:

-Raise the taxable value on industrial property from 11.5 percent to 13.5 percent, and
-Raise the taxable value on all other property from 9.5 percent to 11.5 percent,

to start produce revenue in FY2020 (calendar-wise, this means summer of 2019). I wonder if all the members of the Joint Revenue Committee stand behind this bill, or if there are any of them who oppose it.

The fiscal note attached to the bill uses an average mill levy of 68.516 to calculate the total expected revenue for the state. Based on a $2-billion increase in taxable value, the fiscal note estimates - in one scenario - that
The total amount of increase to governmental authorities would be $141,849,000.
In plain English: we will all contribute our share of $141.8 million in new property tax revenue, if this bill passes.

The revenue is supposed to be split three ways: the School Foundation (12 Mills) would get $24.8 million, County School (31 Mills), $64.2 million, and "all other governmental entities" $52.8 million. This, of course, contingent on their ability to actually collect this amount of money; if businesses are pushed over the edge as a result of this increase, and home values drop because people continue to leave our state, then actual revenue collection will inevitably fall short of the prediction in the fiscal note for this bill draft.

To make this bill more palatable to those who are skeptical of tax hikes, the Revenue Committee has inserted two alleviating features into the bill. The first is a sunset clause, repealing the tax hike
January 1, 2023 or on January 1 of the year immediately following the calendar year the state board of equalization certifies to the state treasurer that the assessed valuation for all mineral production in the previous calendar year was at least twelve billion five hundred million dollars ($12,500,000,000.00), whichever occurs first.
Do you believe that this sunset clause will survive long enough to go into effect? May I interest you in a bridge in Brooklyn?

The other alleviating feature is a section called "taxpayer remedies":
There is hereby created the property tax refund program account. The account shall consist of appropriations from the legislature and such other funds as provided by law. Funds in the account are continuously appropriated to the department and shall only be expended to fund the property tax refund program as provided by this paragraph.
A fraction of the revenue is supposed to go into a tax refund program, but as the quote above suggests, there is no definition of how, or under what conditions, this refund is supposed to be paid out. That is apparently a decision entirely in the hands of the state's executive branch.

If this bill passes and the state takes another $141.8 million from property owners, the legislature has covered most of the $200 million that I have assessed the Wyoming economy can tolerate. However, that "toleration" capacity is entirely contingent on the House of Representatives actually presenting a meaningful tax reform, which may or may not happen, and if it happens, it probably won't pass the Senate.

Should the GOP once again trip on own shoelaces on a major, economically critical bill, we here in Wyoming will be left with absolutely no room for any fiscal-policy mistakes. This property tax bill is bad enough as it is; even if Congress manages to pass meaningful, Trump-approved tax cuts, it is only the beginning of the tax onslaught that we will see in the 2018 and 2019 sessions. We will see increases in tobacco and tourism taxes, as well as an assortment of tax hikes revived from the last legislative session (if you look carefully, the property tax increase discussed here is on this list, making all the other proposed tax hikes increasingly likely):

18LSO-0142 – Sales tax on specified services
18LSO-0143 – Sales tax for school capital construction
18LSO-0144 – Property tax assessment rate
18LSO-0145 – Alcoholic liquors markup amount
18LSO-0146 – Alcohol tax for drug and alcohol programs
18LSO-0147 – Malt beverage tax

The one big elephant that is not yet in the room is the Gross Receipts Tax. The tax-and-spenders in our legislature will be happy to postpone that one to 2019, i.e., on the other side of next year's election.

If you are concerned about the two-percent value increase in the property tax, you might want to request a copy of the property-tax bill from the House Chairman of the Revenue Committee, Representative Madden, at:, 

or the Senate Chairman, Senator Peterson, at 

Or you could come to the Revenue Committee meeting on November 6-7, in the Jonah Building, room L54, in Cheyenne, and talk to the committee members in person.

1 comment:

  1. No such thing as a "temporary tax". Once they get their hands on our money, they'll be happy until they decide it's not enough and once again, the cries of "poor mouth" will be in our hears. They just can't spend it fast enough. The best route to small government is to cut up their credit cards....