Late last Friday afternoon, Jan. 27, Rep. Jerry Obermueller, R-Casper, submitted House Bill 267 to the legislature seeking to increase the minimum annual reporting fees for businesses by 200 percent - from $50 to $150 - effectively tripling fees for most businesses. While we all recognize the budget difficulties our state is currently facing, I believe HB 267 will be detrimental to small business owners registered in Wyoming and will damage our “business friendly” reputation and likely end up hurting our State budget much more than it helps.
As Secretary of State overseeing the filing and reporting of the businesses registered in Wyoming, I am adamantly opposed to these tripling of fees – or to any increase of fees – for the following reasons:
1. We are at a pivotal time in the history of our state with the need to diversify and grow our economy and exit our boom/bust cycles. We must nurture and protect our “business friendly” climate, not only for our existing businesses, but in order to attract and encourage new business formation and entrepreneurship in Wyoming. HB 267 is very unfriendly to businesses currently registered in Wyoming and is certainly a red flag for any new business considering registering in Wyoming. Our existing businesses need our support and stability – not a state of unpredictability and radical fee increases. For the numerous businesses and mixed sectors Wyoming seeks to attract, we must promote and exemplify a climate that encourages, supports, nurtures and promotes innovative entrepreneurial commerce formation. An increase in fees and taxes, as proposed by Rep. Obermueller, is the last thing we can afford to impose at this time. I understand the need to raise revenue, but to raise it on the backs of small businesses that often struggle to get by strikes me as fundamentally unfair. To the contrary, I believe we need to cultivate small business and private enterprise - the backbone of our economy. Therefore, our focus should be on economic development and diversification – not on raising fees and taxes. We need existing small businesses registered in Wyoming to stay here and flourish while we aggressively seek new businesses and industries to come here and broaden our tax base. True economic development leads to increased employment, community growth, and a thriving economy which, in turn, will generate increased tax revenue. Tripling annual fees, on the other hand, is the wrong approach – it is the difference for many in whether they will form in Wyoming or whether they will form a business entity at all. We should not damage the dreams and businesses that could otherwise blossom in our State as we undertake aggressive efforts to expand Wyoming’s economy.
2. I believe there is a distinction between a “fee” and a “tax” and that money from fees should generally not be applied to uses other than to providing the services for which the fee is paid. I do not believe the Office of the Secretary of State should be used as a “profit center” for increasing “fees” which, in turn, will be used as “tax” revenue for the general fund. Accordingly, I believe HB 267 improperly attempts to raise “tax” revenue otherwise labeled as “fees” and imposes upon the Office of the Secretary of State a role as “tax collector” for these new “taxes” being imposed on small businesses. Arbitrarily increasing fees for the purpose of increasing revenue for the general fund is a harmful and reckless approach.
3. Finally, I believe the manner in which HB 267 was initiated is irresponsible and lacking in transparency. This shocking attempt to triple fees came late last Friday during the 11th hour without any advance notice or discussion with my office or the public and without any economic study whatsoever. A legislative bill to increase fees for businesses by 200 percent deserves extreme due diligence and prudence including, but not limited to, an elasticity report to ascertain and measure negative impacts. Furthermore, for the sake of complete transparency, no fee should be increased without meaningful and thoughtful public discourse and, especially, from the business sectors that it affects. What HB 267 proposes – sudden and unpredictable fee increases - sends the wrong message to businesses here in Wyoming and to those contemplating doing business here.
In conclusion, I believe that HB 267 is economically and ethically unsound. If you agree with the points I’m making herein, please contact your legislators immediately and tell them not to support HB 267. To contact your representatives and senators please visit legisweb.state.wy.us/lsoweb/LegInfo.aspx
Ed Murray is the Wyoming Secretary of State and may be contacted at: secofstate@wyo.gov.
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