The Joint Revenue Committee began considering tax reforms at this meeting in Saratoga in May. Members came up with proposals that would generate significant amounts of new revenue for the state, but ultimately killed the biggest ideas on Jan. 31 in Cheyenne. (Andrew Graham/WyoFile)

The Joint Revenue Committee killed its remaining draft tax increase bills Wednesday. One bill died on a split vote and four died with no votes at all.

The committee voted 6-6 not to endorse a bill to impose a 1 percent sales tax on the leisure and hospitality industry. The bill needed a majority vote to pass. Two lawmakers, Rep. Jerry Paxton (R-Saratoga) and Sen. Cale Case (R-Lander), were absent.

House Minority Floor Leader Cathy Connolly (D-Laramie) later moved to consider the committee’s draft bills to increase property and sales taxes. No member seconded her motions. As such the bills died, ending the largest tax-increase proposals from a months-long review without a vote or a discussion.

Together, the bills to increase sales and property taxes could have generated more than $226 million in new annual revenues for education funding and state and local government, though the property taxes wouldn’t have gone into effect for one year. Another $80 million could have been raised for school construction and maintenance. Political pressure and positive revenue projections, particularly from the oil industry, doomed the bills, lawmakers and legislative observers say.

The leisure and hospitality bill appeared to have more support going into today’s meeting. Under the draft bill’s language, the money from the tax increase would have gone toward efforts to promote the state. Industry representatives and Wyoming’s Office of Tourism had supported the bill.

The bill ran into an “anti-tax” sentiment that had arisen in recent months, said Chris Brown, director of the Wyoming Lodging and Restaurant Association. Some lawmakers, including Senate President Eli Bebout (R-Riverton) have voiced a preference for a lodging tax that would apply to hotel sales and capture a larger percentage of revenue from out-of-state visitors.

Brown told WyoFile he believed most members of the tourism industry will oppose such a tax if it comes up this session. The issue is complicated by optional lodging taxes imposed by some counties, he said, and should be discussed over the interim period between legislative sessions, if at all.

Any of the bills could still be brought by an individual lawmaker. Getting the two-thirds majority vote needed for introduction without a committee endorsement is a daunting task for a large tax bill. Connolly told reporters she believed it could happen for the leisure and hospitality bill.

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Senate Revenue Chairman Ray Peterson (R-Cowley) described the interim period as a success, despite not having brought significant tax bills to a vote. Through bills to divert revenues and two smaller tax-increase bills endorsed thus far — a tobacco tax and an increase in state-controlled liquor prices — the committee had come up with approximately $167 million in new annual revenue. That was half of the goal legislative leaders had set for the committee at the start of the interim period, Peterson said. Leadership had asked the group to propose tax and revenue-diversion packages that could raise $100-, $200- and $300 million to help plug deficits in both general government and education funding. 

House Minority Floor Leader Rep. Cathy Connolly (D-Laramie)

Observers who expected more action on taxes from the committee had been misled, Peterson said. “It’s a hard thing to pass a revenue-increasing bill from this committee,” the Senate revenue chairman said. “We’re all a pretty conservative bunch in Wyoming and we know what increasing taxes do to our economy.”

The committee shortchanged its interim work by not sending bills on for a floor discussion by the House of Representatives, Connolly told reporters after the meeting. The committee had not brought anything to the floor that would begin moving the state away from its dependence on the mineral industry and vulnerability to boom and bust cycles.

“Those bills would have attempted to diversify our revenue streams in meaningful ways,” she said. “We didn’t consider them I think in part because we don’t need the money for tomorrow.”

The bills could have changed the way the state pays for education by shifting some of the burden onto property and sales taxes as opposed to just mineral revenues, Connolly said.

“Revenue forecasts are coming in high enough that we’re OK to literally pay our bills for tomorrow and the biennium,” she said. “But they’re not anything for the future.”

Andrew Graham

Andrew Graham is reporting for WyoFile from Laramie. He covers state government, energy and the economy. Reach him at 443-848-8756 or at andrew@wyofile.com, follow him @AndrewGraham88

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