Tax Hikes May be Inevitable, Forum Says

A Twenty-Year Review of Wyoming Tax Reform 2000 Forum
A Twenty-Year Review of Wyoming Tax Reform 2000 Forum

Education cuts may have to be severe, and a state income tax must be considered. That’s the prediction of Senator Cale Case of Fremont County.

Case was among several legislators and governmental officials who took part in a Tuesday morning panel discussion hosted by the Wyoming Taxpayers Association (WTA) in conjunction with Wyoming Public Broadcasting (PBS).

The panel looked back at Tax Reform 2000, a report commissioned by the Wyoming State Legislature in 1997, with the goal of recommending standards and options for developing a fair, viable and economically competitive state and local tax structure, per the report. It focused on fixing some of the fundamental problems with Wyoming’s tax structure, such as the overwhelming reliance on mineral markets.

The panel Tuesday included a broad selection of officials from Wyoming state senators, representatives, and members of Governor Mark Gordon’s staff. While every member had specific details they discussed, the general consensus was unanimous: the state can’t keep going like we’re going.

Case suggested that state leaders take to heart the hard lessons learned in the wake of the COVID-19 pandemic and use them for a template moving forward.

“Maybe COVID has taught us better ways to educate,” he said. “Maybe we need to consider more virtual education at a higher level. Maybe we didn’t need all those school buildings we’ve built.”

Governor Mark Gordon countered with equally grim news.

“We are now in the worst challenge the state has faced,” Gordon said. “We are living from hand to mouth.”

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Gordon said our heavy reliance on coal and gas markets has left the state in a dangerous predicament. The state, Gordon said, has lost a third of its revenue due to volatile markets, a reliance on energy industries and COVID-19’s effect on the economy.

Senator Case reiterated some of the difficult discussions that need to take place regarding the possible implementation of an income tax.

“We’ve been fighting to get taxes considered for a few years now,” Case said. “It’s harder in the Senate. There’s not a lot of appetite for taxes. I’m suspecting that real tax reform will have to wait until after the election. If a candidate has a billboard that says they will not raise taxes, they are not being fair to your children or grandchildren.”

Dan Noble, director of the Wyoming Department of Revenue, said that if the executive branch did absolutely nothing and things stayed as they are, we wouldn’t have enough money to pay the state’s bills. He compared Wyoming with neighboring South Dakota, which is similar in population but has relatively little reliance on taxes from mineral production for state revenue. South Dakota, he said, is not facing the same budget crisis as Wyoming.

“Time is not our friend here,” Noble said. “We’ve cut 20% of state spending already, and we’re looking to cut another 10%. What happens to programs?”

Noble said decisions will have to be made concerning what programs the state can do without.

Senator Dan Zwonitzer of Laramie county, Chairman of the House Revenue Committee, said that they are running the government on roughly half the revenue they had five years ago.

“We’ve lived off minerals for five generations,” Zwonitzer said. “We will likely have to burn through the Rainy Day Account in the next two years.”

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Zwonitzer said that he recognized the seriousness of even considering cuts to the education budget, but they may be inevitable.

“We need a 20% cut to education,” he said. “Yet, we know that even a 5% cut will be ‘blood in the streets.’”

Zwonitzer said the state is likely looking at implementing a 1% sales tax increase.

“The state will go through a transformation over the next five years,” he said. “It’s going to hurt, and people will feel it.”