B.B. Guns, Tylenol Light, and Revenue Insecurity

Laurie Bratten
March 3, 2024

I went to the Wyoming state capital to observe the first couple weeks of the 2024 legislative session. As expected, there are many bills being debated on property tax. These bills vary quite a bit in what they are designed to do. I’d characterize the bills as falling into three categories: “real relief,” “highwater lock-ins,” and “targeted relief” – plus one new bonus bill.

“Real relief” doesn’t seem to have much support among the majority at the capital. It seems that our state and local governments suffer from what I would call “revenue insecurity.” One of the two consistent arguments against real property tax relief was that local governments can’t possibly afford to make any cuts to their record high revenues. Many legislators clearly view tax revenue as belonging to government and consistently referred to taxpayer relief as “cuts” and “costs” to our counties and schools. One citizen who testified expressed exasperation at the prevailing perspective that revenue belongs to the government instead of the taxpayers who provide it.

The other consistent argument against real relief was that implementation would be too difficult. Government associations banded together to testify to that effect. A great example of real relief was House Bill 127 which would have reduced assessments on residents back to 2019 levels and then hold future increases to less than the wage growth of taxpayers or 3%, whichever is less. That bill was killed. 

“Targeted relief” allows a few crumbs to fall from the government table to be snatched up by a small number of eligible taxpayers. The problem with that approach is that legislators seem to have pretty good aim at very small targets, but they only shoot B. B. guns. To be sure, there are people being helped by meaningful targeted relief, however, the scope of that relief can usually be judged by looking at the associated fiscal note for that program. While legislators proudly proclaim how much they helped taxpayers, the reality is that the amount of taxpayer savings pales in comparison to the massive increases in ad valorum taxes over the last five years (now at $2.2 billion, yes, that’s with a B), preserving 99% of income for those government bodies suffering from revenue insecurity. 

“Highwater lock-ins” are the most popular approach by current house leadership to property taxes. If you’ve ever been near the ocean where the tides rise and fall, you’ve seen where the water reaches its peak height on the docks and piers around the shore. Those are the highwater marks. What these bills do is keep the tax collection revenue at the current highwater mark, providing zero relief. This approach is exemplified by House Bill 45, which would cap future increases in property tax on residences going forward from today at 5%. They even tried to call this tax “relief.” 

One taxpayer who testified said that you take Tylenol for pain relief because you expect the pain to go away, or at least be reduced. Have you ever seen a Tylenol ad for a product that guarantees your pain will not increase by more than 5%? Me either, because that’s not relief.

A last-minute entry into the property tax sweepstakes is House Bill 203, which is a novel approach to property taxes – virtually eliminating them for 97% of Wyomingites and replacing it with an additional 2% sales tax statewide. Is this a good approach? There is precious little time to do any real analysis. While it shifts the tax burden from property tax to sales tax, it also locks in the highwater mark of government revenue we are currently at. The bill was introduced in the House on February 15th, and legislators are being handed information and amendments literally minutes before they have to vote on them, so we’ll see what happens!