A bill to raise the annual filing fees businesses pay to the state drew sharp criticism from Secretary of State Ed Murray last week, who said the measure is “ethically unsound” and will harm Wyoming business.
In a Jan. 30 op-ed published in the state’s two largest newspapers, the Republican secretary of state said the way sponsor Rep. Jerry Obermueller “ … initiated (the bill) is irresponsible and lacking in transparency.”
Leaders of the House rose to Obermueller’s defense. Addressing the House, Speaker Steve Harshman said comments of a “personal nature” on legislation are “out of bounds.” The speaker warned legislators that they have to protect the Legislature as an institution from such complaints.
As drafted, House Bill 267 would triple the fee from $50 to $150 a year. Freshman legislator Obermueller (R, HD-56, Casper), is a retired accountant who has impressed fellow lawmakers with his work ethic and ability to sniff out potential revenue sources for the cash-strapped state.
The bill was amended by the House Appropriations Committee, cutting the fee increase from $100 to $25, which raises the minimum annual fee to $75 if the bill passes.
Murray’s op-ed calls the bill “economically and ethically unsound.”
In both the Casper Star-Tribune and the Wyoming Tribune-Eagle, Murray wrote that the original $100 fee increase is detrimental to Wyoming’s “business friendly” environment and ultimately will harm the state budget more than it helps. Murray wrote that he adamantly opposes any fee increases in order to protect small businesses and encourage new companies to register in the state.
“I understand the need to raise revenue, but to raise it on the backs of small businesses that often struggle to get by strikes me as fundamentally unfair,” Murray wrote.
He also sharply criticized Obermueller for not consulting with his office. “I believe the manner in which HB 267 was initiated is irresponsible and lacking in transparency,” Murray wrote.
In addition to the newspapers, the op-ed was published on the Secretary of State’s Facebook page, and was on the office’s official website, although it has now been taken down. After the fee increase was amended down, Murray published a video on the Facebook page where he said he still opposed the fee increase.
Murray declined an opportunity to comment for this story this week. He has a particularly busy schedule, according to his public information officer Will Dinneen. Dinneen said he did not know why the op-ed was removed from the website.
Murray’s comments were published on Jan. 30. Four days later, the Republican caucus, describing itself as the “Majority of the Wyoming State Legislature,” issued a news release expressing support for Obermueller’s bill after it passed its first consideration on the House floor. The statement countered Murray’s argument that the fee increase would hurt Wyoming small businesses by saying the ease and cheap cost of registering in the state has at times left it open as a haven for fraud.
Raising fees would cut down on the abuse of Wyoming’s business environment, the release said.
“By having a filing fee more on par with other business-friendly states, the Legislature is exercising its responsibility to help drain the swamp and cut down on the time and resources required by the Secretary of State’s office to root out these bad actors,” Obermueller said in the release.
Raising the fee, which has not been adjusted in nearly 20 years, would make Wyoming less of a target for bad business actors seeking to set up shell corporations and dodge taxes, the Republican statement said. Wyoming is considered one of the best states to file an LLC in, along with Nevada, Delaware and South Dakota, though Delaware leads the pack in terms of the number of companies registered there according to the nonpartisan Institute on Taxation and Economic Policy.
“Last year more than 120,000 businesses filed in Wyoming, nearly 20,000 of which were from out of state,” the release said. It also referenced the fact that companies tied up in the release of offshore tax documents referred to as the “Panama papers” were traced back to Wyoming.
The release also listed a number of business organizations that supported the fee increase, including the Wyoming Business Alliance. That organization’s president, Bill Schilling, said he does not think the fee increase would hurt Wyoming businesses much. He also said he recognized the state’s need to raise more revenue.
“Adjustments have to be made through virtually every sector and every sub-sector,” Schilling said.
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Obermueller said decisions dealing with revenue raising were difficult for all parties.
“In the House we respectfully disagree with each other daily on how to move the state forward. We have great respect for the process. It is transparent, and open for all to see, no matter how messy. The Secretary of State is entitled to his opinion, and he has the statewide reach to voice it,” Obermueller wrote in an email to WyoFile.
When the bill first came up before the House on Feb. 3, Speaker Harshman voiced his support for Obermueller. While he did not mention Murray’s name or office, Harshman warned the House to guard against threats to the institution.
“All of us as members of this body, I think we have to take it on to be guardians of the process,” he said. He commended the members of the House for making difficult choices when it comes to raising revenue.
“The personal kind of nature of things, in my mind, and frankly in our rules, is out of bounds,” he said, an apparent reference to Murray’s comments about ethics and responsibility.
“I applaud the bringer of the bill and the class act in which he has brought this to us,” he concluded.
Majority Floor Leader David Miller (R, HD-55, Riverton) echoed the message of solidarity. “I love you all,” he said. The bill passed that first floor debate on a strong voice vote and eventually passed the House 43 to 15.
Miller confirmed that Republican leadership in the House had banded together to support Obermueller in the face of unusual public criticism of a legislator from an elected official.
“We maybe pushed back a little bit,” he said. It was disappointing to see a public critique of a freshman legislator who “is frankly working his tail off,” to raise revenue and fix fiscal problems. “We supported what he was trying to do,” Miller said.
In a mid-January interview, House Revenue Committee Chairman Mike Madden said Obermueller’s background as a certified public accountant had made him valuable in finding overlooked revenue sources.
$150 is far from unreasonable when you take the averages into account Ed.
To put this into perspective:
$150= 1 average visit to the local grocery store for 1 average Wyoming citizen
$150= 1 average monthly cell phone / internet bill for 1 average Wyoming citizen
$150= 1 average round trip fuel cost for 1 average Wyoming citizen to drive down to Cheyenne and personally shake Freshman legislator Obermueller’s (R, HD-56, Casper) hand.
On the yellow brick road to de-mythologizing Wyoming, we pause and take a look at the oft-repeated claims that Wyoming’s tax , fee , and incorporation rates are ” business friendly “…. the old ‘ no state income tax, no corporate tax, low general tax levies , and generous incorporation laws’ yada yada drone. State leaders have ballyhooed Wyoming’s favorability to business recruitment for decades.
So…WHERE are all the businesses that our business-friendly tax and fee structure are supposed to be attracting ? Where are the factories, the small businesses, the franchise stores and innovative startups that are theoreticially drawn to Wyoming by the magnets of low/no taxes and business friendliness? Shouldn’t Wyoming be a business paradise by now with full employment at good jobs driving steady growth and replenishing the tax base ?
It’s all a myth . Just recall that little house on Thomas Street in a Cheyenne neighborhood that was the legal address for 2700 corporations, each residing in a 3 x 4 x 12 pigeonhole mailbox but fully registyered with the Wyoming secretary of State as a business entity.
Wyoming’s much ballyhooed business friendly inducements are nothing more that tax shelters . We are the Cayman islands of the Sagebrush , the Panama of the High Plains, a refuge for tax-dodging scofflaws and shell corporations.
If Sec. Ed Murray was being honest , he would say as much. But instead he props up the myth—as if a $ 100 filing fee will dissuade a multinational corporation from setting up shop in Wyoming, but a $ 50 fee will have their tax lawyer and front man here on the next Gulfstream corp jet from Dallas.
There are plenty of reasons why Wyoming is not a superconducting business magnet , but low taxes and miniscule filing fees are not among them. Wyoming remains a Second World energy and mineral commodity colony that is ruthlessly exploited by outsider corporations with the full blessing of our myopic state leadership , but in the end just another lap on the boom and bust carousel. Truth be told, Wyoming does not know how to attract new business, to diversify away from coal and cattle and subsidized farming. Our state tax and fee systems are bogus in that they don’t achieve their intended purpose of creating and sustaining business. Wyoming cannot provide what 21st century companies have to have to relocate here or start up here. We are in denial about that. Murray is State’s Exhibit A.
Nothing short of a total reform of Wyoming’s tax structure and education structure and some massive social reprogramming away from the Cowboy Myth and faux conservatism will save future Wyoming from present day Wyoming.
Not likely in my lifetime. i was saying all this 30 years ago, and not much has changed.
I’m with Mr. Murray on this one. Very disrespectful to propose an increase in fees without addressing the fee increase with the Secretary of State’s office first. As each day passes I am more and more disappointed in the House’s inability to tackle the tough issues and simply propose tax raising measures with little to no transparency – at the last minute with minimal opportunity for public comment. When did the legislature pass the law exempting themselves from criticism?
Note to legislature – get Mr. Obermueller to take a look at the wasted dollars being spent every day not just the revenue stream. Then we can all stand and pat him on the back. For now, I’m with Mr. Murray.