September Joint Revenue Committee Report
By: Pete Obermueller, Executive Director
The legislature's Joint Revenue Committee met in Buffalo September 12 and 13 to continue discussions related to their mandate to advance options of generating 100, 200 and 300 million in revenue. This is the third meeting of the Joint Revenue Committee this interim, and two additional meetings are planned.
At this meeting there was robust discussion on two topics of great interest to counties. The first discussion on Day 1 was a proposal advanced by the Wyoming Lodging and Restaurant Association to impose an additional 1% sales tax on businesses in Wyoming that are part of the travel and tourism economy, including hotels, restaurants and bars (technically the 7100 and 7200 NAICS codes). This revenue would be directed entirely to fund the state's Department of Travel and Tourism, and would allow that office to revert back to the state's general fund approximately $25 million.
The WCCA did not offer comment on this proposal. However, in contrast to other plans floated regarding the local lodging tax option that would upend the current structure of locally voted on and supported lodging taxes, this proposal is wholly separate from that. In addition, a surprising number of local businesses testified in favor of the bill as a means to provide certainty to the marketing efforts of the Department of Travel and Tourism.
The second topic was local government financing. This topic began with a presentation by WAM regarding their Municipal Finance Report. You can read their 82 page report at this link, and, if you are so inclined, you can watch their presentation on WAM's Facebook page. Shout out to our friends at WAM for making use of this technology. As has been the case in the previous two meetings, WAM made several recommendations to the committee on revenue raising options for local government. One of those is the ability for cities to pass a local option sales tax just for the city without the county or other cities voting on it.
Madden: Can you explain why you need more flexibility on the sales tax?
Answer: While we have good relationships with most counties, currently a county can prevent us from putting a local option sales tax on the ballot.
The WCCA repeated its message that has been the same since the spring: that the legislature must continue to distribute $105 million to local government to shore up our budgets; and that in order for the legislature to do that, they will have to deal with the education funding shortfall in some manner. As they contemplate how to do that, any efforts that jeopardize local optional sales taxes will likely be met with opposition from the WCCA. If adding sales taxes ends up being the tax of choice to fund schools, then they can mitigate the damage to us by making the local option tax permanent.
Kinskey: Can you clarify the position of the Commissioners on removing their authority they currently have to make a general purpose penny permanent?
Answer: We currently have the ability by resolution, along with the cities, to make a general purpose tax semi-permanent, which means we do not need to take it back to the voters. However, we are required to pass a resolution every four years. We are not asking for a permanent 5th penny tax unless the legislature decides to impose an additional sales tax amount directed to education in order to protect our local option.
The WCCA also argued that WAM's proposal to have city only local option tax would require county residents to pay that tax when they buy goods in the city without having the right to vote for or against the tax.
Following debate, Rep. Connelly moved to draft a bill to provide local government $105 million using the current distribution formula. After considerable debate regarding the city distribution formula, and whether or not the Revenue committee should be the group that even brings the bill, the motion passed on a 6 - 5 vote. This creates a placeholder in the event that the Joint Appropriations Committee does not advance a bill of $105 million.
Rep. Connelly then moved to draft a bill to make the general purpose penny permanent. That vote failed 9 - 2.
Finally, Senator Case moved to draft a bill that would allow city-only local sales tax options. That motion carried.
Importantly, all three of these bills were motions to draft a bill, not to pass them on to the full legislature. They will be debated again either in November or December.