Once again, Wyoming faces tough times; once again, we have to figure out how to pay for the services we use and need and want. A budget has two sides, revenue and expenditures; a budget crunch has two sides too — revisiting the revenue structure, along with cutting spending.
Today we bring you a tale of two Wyoming House Revenue Committee chairmen. John Hines was chairman in the year 2000, when we faced another bust and with it a budget crunch; Mike Madden is chairman today.
John Hines, and a team of legislators and citizens who huddled for two years in an effort called Tax Reform 2000, dared to utter the deadly words “income tax.” Turned out no one had to enact one — the bust turned into a boom soon after. But it took a lot of courage even to say the words, here in Wyoming.
Mike Madden is getting ready to help take the Joint Revenue Committee, and anyone else who will join in, through a serious discussion of all kinds of tax issues. He doesn’t think an income tax will be necessary, much less popular. But he, too, boldly uses those dreaded words.
Both these guys are real leaders, and they make the key point. I’ll say it again here: we have to figure out how to pay for the services we use and need and want. And minerals are just not likely to carry the freight for us anymore. We have to figure out how to do it differently.
Read what they say, and think about the heavy responsibility that legislators and all of us carry now, to plan for the future of Wyoming. We must consider what kind of state we want to live in, and figure out how to ensure we’ll have the money we need in order to have that kind of state. Learn the facts (we’ve put in a lot of handy links, to take you to reports on the details,) put your comments in right here on WyoFile, talk to your legislators, and get involved. Wyoming people can make this decision a good one if we work together as we have in the past.
We have to figure out how to pay for services we all use
by John Hines
While the big discussion today for many people is the reduction of income for state and local governments, to some of us it is not really news, as we lived through the same type of period during the 1980s and 1990s. As I recall, after my first election in 1984 there was very little increase in revenue until the coalbed methane boom and continued coal development, starting around 2000. I served on the House Revenue Committee for most of that period and then as now you find most people want the government to spend more money but very few support any increase in the taxes they have to pay.
I believe the current figures are that a family pays roughly $3,000 in taxes and receives around $30,000 in government services. I have found that most people support cutting government spending as long as it doesn’t affect the programs they support or receive services from, for themselves or their businesses.
To address this in the 1990s, the Legislature passed and the Governor signed this bill we called Tax Reform 2000. The Governor appointed six legislators and five public citizens to study taxes and revenue and arrive at a conclusion that was fair to everyone, both individuals and businesses. I was elected chairman of this committee and we met monthly for two years. We looked at every state’s tax structure and how they raised revenue. We had public input at every meeting we held.
We voted 8-3 for an income tax
It was a very interesting and educational committee to serve on and if such a study were held today I would guess most of the information found would be much the same. Among the many things we looked at was exemptions. We eliminated two. After revenue increased in subsequent years, several more exemptions have been added.
I hesitate to bring up the committee’s recommendations because at that time we knew they would be controversial, and they were…. I feel not much has changed in the public view about taxes over nearly 20 years. Perhaps today there is an even stronger anti-tax feeling by the public. The one recommendation that could bring more stability to Wyoming’s tax structure was an income tax for individuals and corporations. It is a tax for which the base is the same for everyone — and that is, ‘how much money did you make.’ The committee voted 8 to 3 to support this recommendation.
What happened after Tax Reform 2000 was that mineral prices rose and continued to increase or stay higher for the next 15 years — and other than a lot of criticism of the report, not much was done. Today the problem is larger because most all aspects of government have grown. Big growth in education, healthcare, economic development and payments to local government. These are just a few of the growth areas — but large ones. As Wyoming population has increased, so has the demand for services. Business don’t or can’t pay enough taxes to support their employers — government regulations, general high cost of most everything government does has increased. These include insurance, construction, retirement plans and the list goes on….
With the federal government war on fossil fuels, especially coal, I do not anticipate any sudden change that would greatly increase Wyoming revenue. We are at that point where soon some big changes will need to be made. Spending Wyoming’s savings accounts will only last a short period of time and of course the biggest savings are in the Wyoming Permanent Mineral Trust Fund and cannot be spent by the Legislature. This fund was set up and passed by the people of Wyoming in 1974 as a constitutional amendment. That part of the Wyoming Constitution (in Article 15, section 19) provides that only the income earned on the fund can be spent.
I do not have a recommendation for the problem today, that will be up to the elected officials. I do recommend that the people become informed on these issues and try to help solve the problems, not just be against every change. We all receive many services from our governments so it should be up to us to decide which services we can do without — those that benefit us directly, not just the ones that other groups receive — or which ones we want to continue and how we are willing to support those with our taxes.
More people need to understand our revenue structure and how many dollars it brings into our state and local governments.
(Read Rep. Mike Madden’s Pete Simpson Forum piece on these tax topics.)
Republican John J. Hines served 30 years in the Wyoming Legislature representing Campbell County. Eighteen of those years were in the House, and 12 in the Senate. He served in the leadership in both chambers, and as president of the Senate. He is currently managing his family ranch, which was started in 1901 — Ed.