Bill giving cities option for extra sales tax approved in Senate

CHEYENNE - A bill allowing cities to propose an additional 1% sales tax to local voters won final approval from the Wyoming Senate on Wednesday, marking a huge step in years worth of discussion to find revenue-generating options that cities, smaller towns and counties can all agree on.

Larger cities like Cheyenne have been searching for a way to generate more revenue for the past few years, but such proposals have typically been opposed by officials from counties and smaller towns.

The legislation driving this year's discussions, House Bill 47, won approval from the Senate by a 20-8 vote.

But that approval came after HB 47 was extensively amended to change certain key aspects. The bill originally lowered the threshold of municipalities required to agree to hold a countywide election to make the first penny beyond the state's 4% sales tax permanent, reducing the requirement from two-thirds of municipalities in a county to one half.

However, an amendment approved by the Senate got rid of that section of the bill, effectively going back to the current two-thirds threshold. Sen. Dave Kinskey, R-Sheridan, one of the amendment's sponsors, said the amendment would keep the status quo in place, meaning voters can decide on the fifth-penny tax every four years.

"What is new is the seventh-penny municipal option," Kinskey said. "If a county has no penny or only one of the pennies, a city could put a municipal penny tax on the ballot only with the permission of the county commissioners. If there are two pennies already, the city can put to a vote within the city a question of the seventh-penny without county commissioner approval."

Twenty-one of the state's 23 counties already have imposed a fifth-penny sales tax, Kinskey noted. In 2018, a measure to renew the fifth-penny sales tax in Laramie County passed with 64% voting in favor of continuing the tax.

Others in the Senate, like Sen. Tom James, R-Rock Springs, and Sen. Bo Biteman, R-Ranchester, were uncomfortable with the idea of creating the possibility for a local tax increase.

"I've received overwhelming opposition to this from people, and I've received overwhelming support from government entities. Surprise," James quipped.

Yet many in the Senate viewed the optional seventh-penny tax as a crucial tool for cities and towns that will get less money in direct distributions from the state in coming years as it deals with its structural revenue deficit. Senate President Drew Perkins, R-Casper, noted the $105 million in direct distribution to municipal and counties will go away "probably very soon."

"Unless something really drastic happens, that's going to end," Perkins said. "So the way I view this bill is this gives your local municipalities and counties, it gives them the ability to figure out how to deal with that ... they'll make the choice whether they spend that money so they can have their services or whether they don't and cut government and those services."

The bill also has the support of the Wyoming Association of Municipalities, as well as local leaders like Cheyenne Mayor Marian Orr, while representatives from the Wyoming County Commissioners Association said they were still "monitoring" the bill in a committee meeting last week.

Assuming the House and Senate can work out their differences on amendments, HB 47 will go to Gov. Mark Gordon's desk for final consideration.

Assuming the House and Senate can work out their differences on amendments, House Bill 47 will go to Gov. Mark Gordon's desk for final consideration.