Property tax cut impacts pending

The question of how property tax cuts could lead to reductions in local services continues to be a topic of discussion and concern locally, even as bills that could impact property taxes are still working their way through the legislature.

The City of Green River has continued to keep an eye on the changes affecting multiple bills related to property tax, waiting to see what the effects on local budgets and services could eventually be. Meanwhile, discussions on the topic have continued across the county, with Rock Springs Mayor Max Mickelson hosting Town Hall meetings Saturday, February 15, and announcing more to come. The Sweetwater County Board of County Commissioners has also recently weighed in on the topic, and county officials like Assessor Dave Divis and Treasurer Mark Cowan have spent time sharing additional information and explanations.

Over the past week, more changes have occurred with some of the main bills that could impact property taxes, especially Senate File 0069, "Homeowner Property Tax Exemption." This bill, which has proposed a 50% property tax reduction, passed both the Senate and the House. However, once it moved back to the Senate for concurrence, so many amendments and changes had been considered that the Senate voted 6-25 not to concur. The bill has now moved to a Joint Conference Committee to be evaluated further and to work out the differences. After it goes through the committee, it will go to Governor Mark Gordon, who will have the option to sign or to veto it.

The estimated revenue reduction from this bill for the City of Green River is $380,000 per year for the next two years, according to Green River City Administrator Reed Clevenger. Because the bill is not finalized, however, Clevenger noted that "the amount of impact is still up in the air."

On its third reading in the House, SF0069 "was largely amended back to its original form with a 50% across the board residential property tax reduction for the next two years," Clevenger explained. The bill would then go to a 25% reduction after two years, unless the 2026 ballot initiative, which calls for a 50% cut with no backfill, gets passed by the voters. Clevenger added that an amendment to SF0069 included a 50% backfill to provide funding to local governments, covering 50% of the 50% reduction up to the amount appropriated. This means that if revenue losses are greater than the funding appropriated, the backfill will be reduced proportionally.

"There are concerns from our interpretation that the accounts they will use to back fill will not be able to sustain themselves too far down the road and could have a trickle down effect with significant impacts for state finances in the future, meaning backfill in the future may be at risk while local governments are becoming more reliant on distributions from the state as our own revenue sources are being cut," Clevenger said.

Another bill that could impact property taxes, and has had significant changes proposed, is SF0153, "Residential real property-taxable value." The House Revenue Committee passed an amendment which would drop the residential property tax assessment rate from 9.5% to 8.3%, the maximum reduction allowed by law, Clevenger explained. This amendment was heard and passed on the floor of the House on Tuesday. The bill still has additional readings in the House and will go through the approval and conference committee process if passed in its amended form.

"If passed, the rate reduction would result in a revenue reduction to the city of approximately $95,000 per year," Clevenger explained.

However, Clevenger noted that this bill will also interact with SF0069, with a total revenue loss of approximately $426,000 per year to the city, increasing each year thereafter if property values increase. Up to around $190,000 of this amount could be backfilled for two years, if funds are available, he added.

Clevenger also pointed out that, as of Tuesday, neither the Acquisition Value bill or the Sales Tax Distribution bill had been finalized. He explained that the Acquisition Value bill would be bad for the city, while the Sales Tax Distribution bill would be "good for the city as it gives local governments a slightly higher percentage than what is currently being distributed." The Acquisition Value bill was out of committee and on general file waiting to move forward. The Sales Tax Distribution bill had been assigned to a committee but hadn't moved at all, and Clevenger said it wasn't expected to move forward.

"In summary, we still do not have any final numbers to see the impacts that will need to be considered for our budget session coming up," Clevenger explained. 

The City of Green River will be starting finance committee meetings this week, he added, working with an overall view of expenditures, planning for where the legislative session seems to be going, an trying to understand the impacts of the new jobs that are expected to be coming to the area at the end of this fiscal year and into fiscal year 2026.

"Our real budget work will go into effect once the general session is over," Clevenger added. "As we have tended to do for some time, we will approach the budget conservatively and focus on the direction the council wants us to move toward."

The City of Rock Springs has also continued to consider the impact that bills moving through the legislature could have on the city's funding and ability to provide public services and maintain public facilities. Mayor Mickelson's two Town Hall sessions on February 15 were both full to the point that many attendees were either standing along the sides or sitting on the floor. During the sessions, residents presented concerns, both regarding property tax increases and the potential cuts to services.

County Assessor Dave Divis spoke during the Town Halls, presenting information on how property tax is collected and how the system works.

"Not one single dollar of your property tax bill goes to the state of Wyoming," Divis said, explaining that property tax goes toward funding local services, primarily education, and does not go into state reserves like the "rainy day account."

Divis spoke to some of the measures that have been put into place already to try to provide property tax relief, including a 4% cap on increases, the Long Term Homeowners Exemption and the Property Tax Refund Program.

"People are already receiving help," Divis said.

The County Assessor also addressed some of the misinformation that has spread during property tax discussions, like the idea that people are getting taxed out of their homes, presenting the concept of an elderly person who can't decide between paying property taxes and buying food who will be kicked out of their home. Divis explained that there is a long process to issue a tax deed, taking back a home that taxes weren't payed on. But he added that the county did about 90 tax deeds in a dozen years, and "not one livable residential structure got a tax deed issued on it," so no one in Sweetwater County has been taxed out of their home.

County Treasurer Mark Cowan also worked to address misinformation after the Town Hall meetings, sharing a post on the Sweetwater County Treasurer's Office Facebook page explaining what looks like a drastic increase in the county's revenue since 2022. He explained that this is due to Senate File 60, which was passed in 2021, which changes the way taxes are collected and dispersed. While the new process changes the way the numbers look in the budget, it doesn't mean the county's revenue has drastically increased.

Regarding all the discussions taking place, County Commission Chairman Keaton West noted that "it shows the importance of people needing to dive in and educate themselves."

In his comments during the February 18 commissioner meeting, Chairman West spoke on the issue of potential property tax cuts and conceded that they could have significant effects for the county and the services that can be offered.

"There are certain functions that can only exist by the way in which they were designed - yes, taxes," West said. "We all pay them and we all hate them, but that's how government operates."

West also pointed out that Wyoming ranks one of the lowest states in the nation in terms of taxation with no income tax and voters being able to choose things like a specific purpose tax.

"Everyone would love to see a break on their personal property tax, and perhaps rightfully so, but the proposed cuts at the state level don't offer long term solution planning," West added.

The Chairman pointed out that the county will survive any changes from the legislature and will continue to have a balanced budget, but it could come at a cost.

"Just understand there's a good chance many of the services the public has grown accustomed to will likely look much different," West said. "It's probable that future projects to advance and improve the county will be put on hold, and we'll fall even further behind on deferred maintenance needs, costing the taxpayers more in the end. Change is on the horizon, that is inevitable. Let's hope that change comes out better than it appears presently as the session in Cheyenne concludes."