After property taxes soared for many Wyoming residents in 2022, lawmakers took aim at the issue, filling more than 20 bills this session intended to ease the burden for homeowners. Lawmakers have rejected only one of those proposals so far, but roughly half are at risk of dying this week with a critical deadline looming.
One bill, however, has emerged from the pack. Senate File 136 – Property tax relief-assessment rate reduction advanced through the Senate and is the only property-tax-relief bill lawmakers have moved to the second chamber so far.
The legislation would reduce the assessment rate for the “all other property” tax class, which includes residential, agricultural and commercial properties. If passed, it would knock the rate from 9.5% to 8.5%, effective for the 2022 tax year.
“We have constituents clamoring for us to do something about it,” Sen. Bo Biteman (R-Ranchester) told lawmakers while presenting the bill, which he co-sponsored.
Biteman said the bill is the “easiest and quickest” way to provide relief to residents, but others expressed worry about its repercussions for local governments and education, since property taxes fund both.
“We’re just tossing that little hot potato right on down to the localities,” Sen. Bill Landen (R-Casper) said on the Senate floor. “I just don’t think that’s right.”
As home values have shot up across Wyoming, so have property taxes. That’s because property is taxed ad valorem — or according to value. So the higher the property value, the higher the ad valorem tax.
Residential assessed values have been creeping up since 2014, according to a memo from the Wyoming Department of Revenue. In 2022, however, values skyrocketed in many counties. Lincoln and Teton counties’ values, for example, shot up by about 36%. The mean increase across Wyoming was 16.17%.
Department of Revenue Director Brenda Henson told the Senate Revenue Committee she’d never seen such increases during her decades-long career. Same goes for inflation, she added, which is being reflected in increased values. That has a ripple effect, Henson said.
“Not only does it impact residential property owners,” Henson said. “It also impacts what it costs to provide services, so we’re in quite a quandary here.”
But decreasing a key revenue source for counties — property taxes — amid rising costs has commissioners wondering how they’ll balance their budgets, which is part of Jerimiah Rieman’s rub with the bill. Rieman, executive director of the Wyoming County Commissioners Association, told the committee that inflation, and thereby assessment values, are expected to eventually decrease. Because of that, the bill offers a permanent solution to something temporary, he said, locking counties in with less revenue.
“It will have an effect when assessments come back down,” Rieman said. When Biteman responded that the Legislature could undo the law down the road, Rieman pointed to a longstanding lack of appetite amongst lawmakers and residents alike for tax increases.
“This hasn’t changed from the 9.5% since the 1989 legislative session,” Rieman said.
Brian Farmer with the Wyoming School Boards Association didn’t speak in favor or against the bill, but said because property taxes are a revenue source for the statewide education funding model, their reduction could impact the resources flowing to schools.
“If we get to the point where schools now have less money, the result there is known as a structural deficit,” Farmer explained. Because the state is constitutionally obligated to pay for education, Farmer said, it would need to draw on the Legislative Stabilization Reserve Account, often referred to as the state’s “rainy-day fund” in that event of a school foundation program deficit.
“As [the bill] applies to the school side, it is very, very complex and difficult to know what the impact will be ultimately,” Farmer said.
The Senate Revenue Committee — which includes three of the bill’s sponsors — voted 4-1 in favor of the bill. Sen. Stephan Pappas (R-Cheyenne) voted against it.
After clearing that first hurdle, lawmakers brought amendments on the Senate floor to address “the quandary” raised by Henson, Rieman and others.
Biteman brought two successful amendments — one that changed the effective date and a second that amended the rate reduction.
Then, much to Biteman’s chagrin, Sen. Jim Anderson (R-Casper) proposed an amendment to add an appropriation of $84 million from the General Fund, so counties could be reimbursed by the state for decreased revenues resulting from the bill.
Without the amendment, the cost is “coming out of the counties, the cities, the special districts, community colleges, local school districts and the School Foundation Program,” Anderson said. “That’s who’s paying for this tax relief that we’re talking about doing now.” Anderson called the effort “a wonderful thing” but urged the Legislature to foot the bill.
Scott thought it would be more effective to deal with that in the budget next session, if need be, but Pappas described the body as having amnesia in similar circumstances in the past.
Similarly, Sen. Chris Rothfuss (D-Laramie) pointed to the now defunct grocery tax.
“We took that away because, ‘Don’t worry, the Legislature will backfill for it.’ Does anyone here or in the state that’s listening feel like the Legislature has effectively backfilled for the grocery tax?” Rothfuss asked. The direct distribution falls well short for what his community would expect to get from a grocery tax, he added.
Anderson’s $84 million amendment was challenged by Sen. Anthony Bouchard (R-Cheyenne). Ultimately, the body voted 16-14 to reject the amendment, with one excused.
Sunset and rally
Senate President Ogden Driskill (R-Devils Tower) lodged his opposition to the bill, saying “frankly, it’s bad tax policy.” Driskill pointed to its broad application, which would give the same tax break to those who are at risk of losing their home and the state’s wealthiest residents.
“They’re giggling about this one, they’re giggling. The guys that got $10 million houses, they’re gonna get a huge rebate back,” Driskill said. For that reason, Driskill brought a successful amendment to sunset the reduction after one year.
The two counties Sen. Larry Hicks (R-Baggs) represents — Carbon and Sweetwater — saw two of the lowest increases in residential assessed values. Hicks opposed the bill for being a “blunt instrument” for what should be “a surgical procedure,” since it could hurt counties like his that “didn’t experience any kind of windfall.”
“I never heard a single word about somebody worried about their property taxes” on the campaign trail, Hicks said. That was, however, the top issue voters talked to Sen. Tim Salazar (R-Riverton) about, he said.
“I simply could not go back to my constituency at the end of this session with nothing,” Salazar said.
Before the vote, Biteman gave one last, impassioned push.
“Since the body is in full retreat mode, I’m going to try to get the forces back in battle position here,” Biteman said. “We’re crying about special districts, we’re crying about community colleges.”
He then pointed up to the chamber’s balcony.
“We got taxpayer-funded lobbyists sitting up there, but we don’t have any people from the public here,” Biteman said. “We are their lobbyists! We are all they got!”
The Senate passed the bill 18-12 on third reading. It now goes to the House for consideration.