Legislative leaders share vision for taxes
January 15, 2019
CHEYENNE — The leaders of both chambers of the state Legislature have made stabilizing revenue one of their top priorities this general session. On Friday, they gave more insight into how they’d aim to accomplish that, including taxing renewable energy and expanding the state sales tax.
House Speaker Steve Harshman and Senate President Drew Perkins, both R-Casper, said they want to expand and modernize the tax base. The goal isn’t to create more revenue but instead a stable revenue stream that is more independent of the boom-and-bust cycle of the mineral markets.
Seeing eye to eye on revenue and spending is something that strikes a slightly different note than in previous sessions. During last year’s budget session, the Senate and House were at extreme odds over education spending and the possibility of things like a lodging tax increase. Now, both Perkins and Harshman have said they want Wyoming to find ways to get the state’s visitors to help pay for more of the services they’re using here.
For Perkins, modernizing the tax structure is just an overdue recognition that Wyomingites are spending more money on services than goods. While the state’s economy has shifted, what gets taxed hasn’t. If Wyoming hopes to capitalize on the economic development efforts of former Gov. Matt Mead’s ENDOW initiative, the tax structure needs to change to capitalize on new industries and businesses that take up shop in the state.
“Every other state that doesn’t have an income tax has gone through this, and we’re the last ones to do it,” Perkins said. “If you’re going to expand the economy, you have to find a way for the new parts of the economy, the emerging additional diversity in the economic sectors, to be able to contribute their fair share to the economy.”
Perkins said he would like to see wind and solar production taxed in a fair way like other energy-sector products. It just made sense, he said, that as the production in those areas expands and becomes cheaper, they begin to pay a more equitable rate.
Harshman said he and Perkins shared the same vision on broadening the tax base but at the same time dropping the rates to better reflect the current service-driven economy. He didn’t believe a change would result in an immediate hit to state revenues.
“We’re not the first legislature to look at this. This has been going on 30, 40 years,” Harshman said. “I think President Perkins’ and my thoughts are to try to keep this revenue neutral but set it up that it continues to grow as the future economy grows, by lowering the tax rate to 3.5 and then building it out to really reflect what’s going on in our economy.”
One thing Harshman believes the state should look at is increasing property tax mills to help fund education. He said in the past, Wyoming schools were getting six mills, but different actions had reduced the amount of money districts collected.
“Most districts were utilizing the six mills,” Harshman said. “Through school reforms and some other efforts, these dropped off. We are paying fewer mills than any time in modern history.”
He said he would push out a bill that had been sponsored by the Joint Revenue Interim Committee late last year to raise property taxes a total of nine mills over three years, with a three-mill increase each year. The mill levy increase would apply to residential, commercial, agricultural and industrial property, but not mineral production.
But Harshman said it could be hard to pass this session, but he wouldn’t keep it from hitting the committee process.
“When you talk about adding mills, though, it’s a hard conversation,” he said.