Of the more than a dozen bills aimed at providing residential property tax relief, Wyoming lawmakers settled on three: one to expand an existing refund program for low- and middle-income homeowners and two to lay the groundwork for more ambitious future reforms.
Several lawmakers expressed disappointment that the Legislature didn’t do more to address what many said was their constituents’ top concern. Some were specifically upset that higher earners won’t see a property tax cut anytime soon.
“Here we are, all high and mighty. Getting to tell you, ‘you deserve a tax cut, but your neighbor, no, she doesn’t.’ This is not the way to go,” Sen. Bo Biteman (R-Ranchester) said of House Bill 99 – Property tax refund program on the Senate floor. “When we’re sitting on all this money, give everybody a tax cut.”
Instead of refunding property taxes to certain qualifying residents — as HB 99 will do — Biteman, and others, wanted to simply reduce the assessment rate for the “all other property” tax class, which includes residential. Property is taxed according to current market value in Wyoming, so as home values have shot up, so too have property taxes. Reducing assessment rates would have lowered the cost for residents.
A Biteman-sponsored bill to do so failed amid concerns that it would diminish funding for local government and education.
Lawmakers favored targeted relief over across-the-board reductions. Those focused solutions accomplished what the Legislature set out to do, according to Sen. Mike Gierau (D-Jackson).
“[This] will help the people who need it most — middle income folks, our teachers, our firefighters, first responders, people that are working every day that are struggling at their kitchen table with their issues, their costs, right now,” Gierau said.
Still, many see the refund program expansion as a near-term patch on a complex and increasingly vexing problem for many Wyomingites. The other two property-tax-related bills lawmakers approved could clear the way for more fundamental long-term reform.
Voters will decide on one of those approaches with a 2024 ballot measure.
Near-term relief
Wyoming’s property tax refund program is not new, but its recent legislative embrace is. Three out of the last 10 years, the program went unfunded, according to Brenda Henson, director of the Department of Revenue. In 2022 — a year in which it was funded — the program saw its highest demand yet, granting relief to approximately 3,000 applicants for the 2021 tax year. Another 1,300 applied but did not qualify, largely because of the income requirements.
House Bill 99, which Gordon signed into law last week, broadens the income requirements and increases the amount which can be refunded. To qualify for the program under the new conditions, applicants must not earn more than 125% of the median household income in their county. The previous cut off was 75% of the median. Additionally, refunds were once capped to not more than 50% of the applicant’s property tax from the year before. The new law kicks that part of the equation up to 75%. Applicants are also required to live at the property for no less than nine months of the applicable tax year — the intent being to benefit full-time residents, not second-home owners.
About 6,000 additional Wyoming households are expected to qualify under the new parameters, according to Henson. To account for that, an additional $8 million will go toward the program. The application period opens on April 1.
All 62 representatives voted to send the bill to the Senate, where support waned. Biteman called it “a win for very few people,” while Sen. John Kolb (R-Rock Springs) said lawmakers needed to contract, not expand the program.
“[A] good program has gone too far,” Kolb said. “I think it’s time to rein this thing back in.”
“What we’re doing with this program is we’re giving peoples’ tax money back to them,” Gierau shot back. “I’m hearing people argue … we need to rein in giving their tax money back. Well, I’m against that.”
By this point in the session, most bills aimed at property taxes had fallen by the wayside and Sen. Dan Dockstader (R-Afton) said this was one of the body’s best bets.
“It’s not my favorite, but I’m going to put this in the briefcase with an ‘aye’ vote and take it home,” he said.
The Senate voted 18-13 to send the bill back to the House with two amendments. The House voted 50-12 to send the Senate’s version to the governor’s desk.
Structural reform
Lawmakers also took what some called the first steps toward long-term reform.
House Bill 100 – Acquisition value study, brought by Rep. Mark Jennings (R-Sheridan), allotted $50,000 to study basing the state’s property tax system on acquisition value, or purchase price, instead of current market value. Theoretically such an approach would insulate homeowners from climbing home prices and avoid “pricing out” long-time residents.
Ultimately, however, any meaningful change to residential property tax law, will require tweaking the Wyoming Constitution, according to Rep. Martha Lawley (R-Worland). The state constitution groups residential property in the same tax class as commercial and industrial properties. That lumping together prevents the Legislature from making any isolated changes to how residential properties are taxed. The Legislative Service Office made the conundrum clear to lawmakers in a memo outlining the potential legal challenges of about a dozen approaches being considered.
Senate Joint Resolution 3 – Property tax residential property class is designed to tackle that problem by letting voters decide via a 2024 ballot initiative if they want to separate residential property into its own tax class.
That’s a far cry, however, from the bill’s original intent. Upon passing the Senate, the resolution would have only created an exemption for the elderly and the infirmed.
Rep. Liz Storer (D-Jackson) brought an amendment on third reading in the House to replace the bill’s original language with tax-class-seperation language from a previously failed resolution. Her intent was to get something meaningful across the finish line when other options had stalled, Storer said.
“I think this is a great opportunity to put an excellent tool in our toolbox for broad-based tax relief in the future,” Storer told lawmakers. “And I believe the voters will appreciate the opportunity to do so.”
(Rep. Storer is the President & CEO of the George B. Storer foundation, a financial supporter of WyoFile.)
As a constitutional amendment, it will ultimately be up to voters to decide. That also meant the resolution required two-thirds of the body’s approval, which it received but not without some consternation.
“Creating a new class does not provide tax relief. In fact, this body could choose to raise taxes within that new class,” said Rep. John Bear (R-Gillette), who ultimately voted for both the amendment and the bill. “If anything, keeping it tied together to corporations is probably a good idea for right now because it keeps this body from doing just that.”
The bill passed with Storer’s amendment. She and her northwest Wyoming counterparts — several of whom were sponsors of the resolution — called it a bipartisan win.
“This legislation wouldn’t have been possible without the hard work and perseverance of [Storer], who adapted my original bill into a more comprehensive solution for the people of Wyoming” Dockstader said in a press release. “We all worked together to make this happen.”
The bill will appear as a ballot initiative during Wyoming’s 2024 election.
Why not consider lower vehicle registration fees? That would help many more people than just property owners. Or even some combination of both. Then everyone would benefit.
What a crock. One of the qualification requirements is less than $150,000 in assets. That pretty much rules out any homeowner.
Here’s a question that maybe someone can answer for me: Counties are allowed to assess a maximum of 12 mils on residential property taxes. When the assessed valuation of our home in Park County jumped in the last year on account of the purchase price of other properties in the neighborhood, our property tax saw a big increase. So Park County got a lot more money from us, and every other residential property tax payer in the county, on account of these inflated market values. We are not being provided with additional services for having paid more taxes. So how come Park County has continued to assess at the maximum mil levy allowed? How about reducing that mil levy to compensate for a significant artificial jump in assessed valuations?
Tax based on purchase price or assessed value, whichever is lower. Make up any shortfall with a 2% real estate sales tax. Any buyer who can afford or borrow a million dollars for a house can afford 1.02 million.
Taxation without representation ! When an individual who does not own real property votes on a mill levy increase, they are in effect, raising my taxes at no cost to themselves. This skews the results of said vote. My property tax statement has THREE separate mill levies for schools ! Time to unelect some politicians !
One problem is property owned for many years by an old person is “estimated” in value by what standard? What others sell their homes for in the same area at the present time? Yet most live on retirement based on that earlier income, not today’s income. That means it can take up to a month’s income to pay taxes on what they bought years ago.