By Ramsey Scott

Wyoming Tribune Eagle

Via Wyoming News Exchange

CHEYENNE — A bill to increase education funding by raising property taxes on residential and industrial property will land in the Legislature early next year.

Given the testimony the bill received during a hearing Thursday, the proposal is sure to set off a debate on how Wyoming should try to find new revenue to fund its K-12 schools.

The bill, sponsored by the Joint Revenue Interim Committee, would increase property taxes by nine mills over a period of three years, with a three-mill increase going into effect each year. The mill levy increase would apply to residential, commercial, agricultural and industrial property, but not mineral production. 

–How much more would you pay?–

According to the Wyoming Department of Revenue, it’s estimated the nine-mill increase would have raised more than $96 million in additional revenues for education if it had been in place for 2018. 

For a real-world perspective, that would constitute about a 13 percent tax increase on property taxes. 

A home valued at $200,000 paid, on average, $1,305.28 in property taxes in 2018. With the proposed tax increase, that homeowner would have paid $1,476.28, or $171 more, said Brenda Arnold, administrator for the Wyoming Department of Revenue’s Property Tax Division, during the Thursday hearing.

Given the mills that exist already in the state for education, Arnold said about $988 of that tax bill would go toward the state’s K-12 education system.

While $100 million or so every year going into the state’s education system is a significant increase, it still doesn’t fully solve the hundreds of millions of dollars in structural deficits the state’s education system faces. Last year alone, the state’s K-12 education system had about $27 million cut from its budget. 

But where that money comes from to fill the gap is causing some serious pushback from those who might have to pay it.

Brett Moline, the director of public and governmental affairs for the Wyoming Farm Bureau Federation, bemoaned the type of impact a 13 percent tax increase would have on the state’s agricultural industry. Given the precarious financial situation in which many farmers find themselves, especially when it comes to market fluctuations on their products, raising taxes could have a dire effect on agricultural producers in the state. 

“There’s no way in the world I can support a 13 percent increase in property taxes. We just can’t afford it,” Moline said. “I know we have a lot of deficits in this state, county, city, schools. But to increase our property taxes by 13 percent at this point, we can’t afford it.” 

Moline said it would be “less repugnant” to his members if the deficit was solved by a sales tax increase. 

Sen. Affie Ellis, R-Cheyenne, said while an extra $150 or $200 might not seem like a lot for some people who own homes, for those living on a fixed income, that increase could mean financial disaster. 

Committee members agreed it could end up hurting some Wyomingites on a fixed budget, and Revenue Committee Co-Chairman Rep. Mike Madden, R-Buffalo, said he hoped the Legislature would look at finding an existing program that would give elderly residents a break on property taxes. 

Tax increases historically have been hard-pressed to find any support in the Legislature. But Revenue Committee Co-Chairman Sen. Ray Peterson, R-Cowley, said the issue of budget deficits wasn’t going away. 

And if the state ever wanted to find a solution, it would take some hard choices and change in the tax code. 

He implored his committee colleagues to press House and Senate leadership to make sure this and other bills to change the tax code got a hearing on the floor of each chamber. 

“It’s an ugly subject that we talk about when we talk about tax increases and diversification. But we’ve talked about diversifying our economy, diversifying our tax base. But then when it comes down to it, we kill bill after bill after bill,” Peterson said. “My comment is we haven’t hit rock bottom hard enough yet. But when we do, and we will sometime in the future when our resources are depleted, and the market is beating them up pretty bad, and we lose coal lease money, we’re going to have some serious decisions on what’s going to take the place of these revenues.”