Property tax is a hot issue in Wyoming politics. Concern that rising residential property tax assessments will hurt Wyoming residents is not entirely without cause, as some genuinely struggle with the increase. However, the reasons why assessments have increased are not well understood, and the main proposed response would do more harm than good.
Opinion
It is important to understand that Wyoming’s property tax rates have not changed. In fact, Wyoming’s property tax rate is among the lowest in the nation. According to a 2021 study by the Tax Foundation, Wyoming’s property tax rate ranks 47th out of 50 states.
Rather, the rise in property taxes has been solely caused by an increase in property values because our taxes are based on the market value of our homes. The more our property is worth, the more we pay in taxes.
One major reason that property values have increased is inflation. According to the U.S. Bureau of Labor Statistics, it would require over $244,000 in today’s dollars to match the purchasing power of $200,000 in January 2019. These inflationary increases also impact home values, so if assessments accurately capture that increased value, that means higher taxes.
Property values have also increased because buyers are increasingly coming from out-of-state areas and bringing property valuations from their home state with them. A buyer from the coast who is used to higher property values will not think twice about market prices far higher than what we are used to in Wyoming. These homebuyers are willing to pay more for houses, thereby increasing the market price, again leading to higher taxes.
Wyoming also faces a housing shortage, meaning that we do not have enough housing stock to meet the needs of all the people who want to buy homes. The simple law of supply and demand dictates that, with a supply shortage, prices increase, again leading to higher assessments and higher tax burdens.
All of this is to say that, while increased property tax payments are real, they have increased due to inflationary and market conditions, not because of increases in our tax rate. Unfortunately, the proposals floated to address the issue have been weak. The main proposal would have property taxes based on purchase price, rather than market value, and would artificially limit any market adjustments.
This system has been tried already — most notably in California. It resulted in a majorly skewed real estate system where homeowners were heavily disincentivized from selling property. Rather than fixing a tax problem, it caused a housing market crisis.
This proposal also comes with a major big-government red flag: It requires everyone who purchases real estate to publicly disclose the terms of all their real estate purchases. Rather than allow private transactions to remain private, this proposal would require the government to collect sale data on every real estate transaction. I believe that most people would much prefer that private transactions remain private, rather than be forced to open them to public view.
An interesting statistic illustrates perhaps the greatest problem with this proposal: It primarily benefits those who do not need the help. Rather than tailor relief to those who truly struggle with the increase in property taxes, the California-style proposal changes the system for everybody. The Wyoming County Commissioners Association analyzed the data and found that over 40% of the tax payment reductions would go to property owners in Jackson and Teton County. Over 47% of the residential property tax savings would be in Teton County alone. Lincoln County, Teton County’s neighbor to the south would account for another 13%. This proposal is less a property tax relief proposal and more a Jackson real estate subsidy.
Lastly, we must not ignore the impact of this proposal. Property tax is a primary source of income for local government and K-12 education. It does not go to the state Legislature to dole out. If there are concerns about the Legislature overspending, this proposal does nothing to address that. Instead, it undercuts the government closest to the people by limiting the revenue available to the cities and counties that maintain our streets, sewers, and water lines, provide local law enforcement, and educate our children. Property taxes are the lifeblood of local government, and this proposal would severely limit their ability to do their needed work.
Fortunately, the Legislature’s Revenue Committee declined to sponsor this proposal, but it could still come forward as a private bill, albeit with much lower odds of success. That leaves Wyoming with an important question: How should we address the problems caused by increased property taxes on our most vulnerable citizens?
It is certainly not by subsidizing our most affluent. Instead, the best proposal at this time is the one brought by the governor: an increase to the existing property tax rebate program.
Wyoming already has a rebate system for those who meet criteria showing that property taxes are a genuine burden. Those are the homeowners we should be focusing on, and the current program allows those who meet low-income thresholds to receive rebates for taxes paid on their property. It is a tailored program with relief targeted to those who actually need it. Rather than knee-jerk reactions, these are the thoughtful solutions we should be pursuing. Let’s hope the Legislature makes the right choice and gives real help to those who need it most.
How much have property tax revenues increased the past 5 years? While we all know that operating costs have increased, the large assessed valuations have created somewhat of a windfall for many Wyoming taxing entities. This may be too simple, but cutting the mill levies is a quick and easy way to manage revenues and give some property tax relief. 15% or more yearly tax increases is too much!!
I was hoping to read this and get some decent information. However, it’s full of nonsense and untruths, not to mention finger pointing with more untruths. I get it, it’s your opinion. Guess what? Opinions are like sphincters, everybody has one! For those that read this and don’t do your own homework and research, then I’m sorry to say, your part of the problem.
1. Taxation is theft.
2. Taxation of unrealized gain is theft.
Failed? California has a gross domestic product (GDP) greater than France, India, Italy, Brazil and many others. That’s not a failure. If I have the option to vote in lower taxes so my family isn’t forced out of their homes, I will.
I live in California and Wyoming would be wise to follow California’s lead on this one issue. Prop 13 was originally passed to keep retired people from having to sell their homes and move out of state because they couldn’t afford to pay their property taxes. It worked. It still works. California’s housing problems have nothing to do its property tax structure and everything to do with its insane regulations. Just like its gas prices. It’s not price gouging by Big Oil that causes the price of gas in California to be $5 per gallon, but rather its burdensome regulations on oil producers and oil refiners. And the idea that this proposal only benefits the rich is ludicrous. It benefits every person who buys a home and stays in it long term. Does that sound like carpetbaggers from California looking for the next cool thing or average people looking to build a life? California’s system does not unfairly burden young home buyers, but it does shift it to NEW home buyers. The average length of time the average home owner stays in a house nationally is eight years. In California it’s less than five. Which means the state reaps windfall taxes on the churn. I have no idea what your state’s overall tax structure is, but from what I’ve seen state bureaucrats will spend every dime you give them and ask for more.
Spot on! That is what I miss about california, that, and the produce, it was fresh
Step one is rule out anything that california had done. Step two, cap the amount of annual increase/decrease to no more than X%
I am a former Wyoming resident and current California resident. One point missed by Mr. Lenhart is that California Prop 13 has, over 60 years, shifted the unfair tax burden from seniors and lower income homeowners.Now the unfair property tax burden falls onto younger, new homeowners who now pay a wildly disproportionate share of property taxes. California has doubled down on this unfairness by passing additional measures so adult children and grandchildren can inherit the original property tax basis while benefiting from the stepped up value of their inherited house. Like Wyoming, California has a second home crises more than a housing crises with a significant portion of the housing stock sitting empty for much of the year. Large commercial property owners reap windfall profits as they do not pass along their lower taxes to their tenants in the form of lower rents. Second homes, like multimillion dollar commercial properties, should be assessed at market value. The 2020 proposition 15 in California is a good model to look at for how to better write a law that protects seniors and less affluent resident homeowners as well as small business owners of modestly valued commercial properties while expecting second homeowners and owners of large commercial properties to pay their fair share of the tax burden. This proposition came close to passing but failed because of the usual arguments from those who oppose taxes while demanding government funded services. However Wyoming decides to protect the small, less affluent property owners who are the backbone of the state it needs to recognize the need to ask large commercial property owners and second home owners who most benefit from all the services provided by tax dollars to pay their fair share.
Note: this comment corrects typos in earlier submission…
With property taxes in Teton County up roughly 100% over the past few years, where has all that money gone?
Recent studies suggest public spending per student in Wyoming now exceeds $20,000. When last reviewed, Wyoming’s spending per student was at least 30% above and most often closer to 100% or more above the student education expense in our 6 immediately adjacent states. Yet, Wyoming’s graduation rate and academic performance was reported to be simply comparable to its neighbors. Definitely, it would be worthwhile to review the status of public education in Wyoming in 2023. But, meanwhile, it seems fair to ask, where has all the money gone? How much more must property taxes rise to assure students are educated? Who is it that stands in judgement after these enormous cost increases as to who “really needs” targeted relief and who does not?
It seems to me residents need general relief from property taxes, not some ruler’s idea of targeted relief. And a thorough review of spending is in order, too presented in a simple, 1 page, budget reporting “money in”, “money out” annually over the past 5 years that any citizen could quickly understand. Only a simple, easily accessible budget report will enable citizens to make informed decisions as they participate in the political process.
Data sources:
HeyTutor, 10/6/23, https://heytutor.com/resources/blog/these-states-invest-the-most-in-their-childrens-education/
Education Data Initiative, 9/8/23, https://educationdata.org/public-education-spending-statistics
Perhaps the legislators will look at the new law the state of Illinois passed that gives tax relief for seniors, veterans, and the disabled.
County Assessors and Treasurers should have access to the sold prices on real estate transactions due to the requirement to file a Statement of Consideration with the new warranty deed. Is that requirement being subverted, somehow?
Similar problems most locales. Is accurate assessment more important than “keeping private transactions private”?
Equitable taxation means accurate fair market value for all.