Davis: Consider Consequence of Property Tax Relief

With the 2024 Budget Session convening February 12, a number of bills are aimed at providing property tax relief to Wyoming residents.

House District 47 Representative Bob Davis (R - Baggs) said the ramifications of some of the residential property tax relief bills being proposed for the upcoming legislative session need to be weighed against a loss in funding for essential government-funded services.

For example, counties get 17.23 percent of property tax revenues, which they use to provide essential services.

Some legislators are talking about a 50 percent decrease in property taxes, Davis said.

“People don’t understand that residential property taxes are what funds our municipalities,” he said.

A percentage of the tax revenues are also distributed to schools and education, county government and special districts. As stated on the wyoleg.gov website under property taxes, schools and education get 72.6 percent of the revenue, county government gets 17.23 percent, special districts get 8.07 percent and municipalities get 2.1 percent.

Carbon County is a Tier 2 county, as stated on the website. All of the Tier 2 counties residential property tax revenues make up 19 percent of the total of the revenue statewide. Albany, Carbon, Fremont, Lincoln, Park, Sheridan and Uinta are the tier 2 counties.

“You take all those revenues away, how are you going to backfill that?” Davis said. “Of all the bills, the one that puts a cap on [the tax] is probably the most sensible.”

House District 40 Representative Barry Crago (R-Buffalo) is the author of House Bill 45.

Crago said this bill proposes to cap the maximum allowable increase in property taxes each year at 5 percent. Anything over that 5 percent is exempt from taxation. The purpose of the bill is to make property taxes more affordable for everybody including those on fixed incomes, Crago said. He said residential property taxes have increased by as much as 20, 30, or even 40 percent a year.

Melissa Shinkle, president of the Wyoming County Assessors Association, explained that a dramatic increase in market values across the state have led to a similarly dramatic increase in property taxes.

“While assessors are required to determine a property’s market value using comparable sales data, the amount of tax you pay depends on your county,” she said. “State statute dictates how many mills each entity can assess. On a local level, county commissioners and special districts select the number of mills necessary to generate the appropriate amount of revenue for their operations.”

Carbon County has set its mill levy at.07600, as stated on carboncountywy.gov.

“The majority of counties and municipalities in Wyoming had already maxed out their allowable mills, so that isn’t what has contributed to the double-digit increases,” she said. “It is due to the high sales prices.”

The carboncountywy.gov website provides the following explanation of how property taxes are calculated:

“Historically [prior to the recent increase in property values] in the last 40 years, property taxes have on average increased about 4 percent a year,” Crago said. “We’ve survived on less than 5 percent for a long time.”

The state has been backfilling education for a while, he said. The State of Wyoming is mandated to fund education. Wyoming’s state constitution is part of the process developed to equalize funding for K-12 schools.

“…Wyoming’s constitution guarantees a ‘complete and uniform’ public schooling system, and explicitly calls for the ‘equitable allocation’ of resources between districts,” as stated on https://reason.org/commentary/school-finance-policy-in-wyoming-promotes-equity-between-districts/.

“Wyoming determines a revenue entitlement for each school district using a resource-based allocation system that accounts for factors such as staff salaries and course materials. While this method does have its flaws, the state has an effective system for equalizing local dollars,” the website states.

The following explains where state aid comes in.

“Once the revenue entitlement is calculated, each district is required to tax $25 for every $1,000 in assessed local property wealth, and each county has to tax $6 for every $1,000 of assessed property wealth. This county tax is distributed to each school district in the county in proportion to its student enrollment. The two taxes, in addition to other miscellaneous local sources like federal forest reserve revenues and railroad car company taxes, account for each district’s local contribution for K-12 education. This local contribution is then subtracted from the state’s estimated cost of providing education in that school district, and the difference is made up through state aid.”

Crago said setting a cap on property tax increases is a balancing act to make sure property taxes are high enough to fund the necessary services, but also low enough for the property owner to afford.

He said the bill has a chance to pass as it has 30 co-sponsors.

It is the only one of the property tax bills that can be considered in the 2024 session, he said, because all the others have to first go through the state and the county assessor’s offices. That cannot be done in time to be voted on in the upcoming session.