Wyoming legislative panel weighs tax hikes as revenues drop
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CHEYENNE (AP) — A Wyoming legislative committee is considering whether to allow local governments to impose an optional tax on grocery purchases.
The state’s Joint Revenue Committee has set the grocery tax proposal for preliminary consideration at its scheduled meeting next week in Douglas. Other tax proposals on the agenda at the meeting include hiking state property tax to pay for school construction and increasing the tax on wind energy production.
Wyoming is looking for new sources of tax receipts in response to falling revenues from coal and other energy sources.
Gov. Matt Mead announced last month that state agencies must cut their budgets for the two-year funding period that starts July 1 by 8 percent to cover expected shortfalls.
Wyoming fiscal experts now predict that energy revenues could fall up to $130 million below projections for the current fiscal year that runs through June. If revenues drop by that much, it would represent about 9 percent of the total $1.44 billion total general fund/budget reserve account budget for the current fiscal year.
Mead has said he expects similar shortfalls for both years of the coming biennium. He said that means the state needs to cut $300 million or more over the next two years.
Rep. Mike Madden, R-Buffalo, chairman of the House Revenue Committee, said Monday that the full Legislature will consider the committee recommendations early next year.
Some lawmakers had wanted to consider giving local governments the option to impose a 2-percent tax on grocery purchases during the budget session earlier this year, Madden said. Wyoming rolled back the sales tax on groceries in 2006 in the face of criticism that such a tax disproportionately hits the poor.
Chesie Lee of Riverton, the executive director of the Wyoming Association of Churches, said her group was involved in repealing the tax on groceries 10 years ago and would oppose any effort to reinstate it.
“It definitely seems to be the wrong place to look,” Lee said Monday. “This state does need to look at other sources of revenue, given it’s become so dependent on the minerals industry for revenue. But to put it on low-income families and people with limited incomes and workers is not the place to find these revenues.”
Wyoming, the nation’s largest coal-producing state, has relied heavily on bonus payments from coal leases on federal land to pay for billions of dollars in school capital construction in recent years. State analysts now say that funding stream is likely to evaporate.
Wyoming used property taxes in the past to build schools, Madden said. “So it only makes sense that we include that as one of the basket of possibilities that we look at, but there will be other things that we will get to,” he said.
The committee also is set to consider whether to increase the tax it imposes on generating electricity from wind turbines.
The tax is currently $1 per megawatt hour of power, Madden said. The committee intends to review a state study that he said will likely conclude that the state should hike the tax rate on wind power to bring it in line with the taxes it collects on power generated from coal and other sources.
