CASPER, Wyo. — Wyoming House Bill 0047 includes provisions that would modify state statutes regarding the so-called county “fifth penny” and “sixth penny” sales and use taxes. The main new provision proposed by the bill would allow counties which have a general “fifth penny” sales tax to imposed a “sixth penny” sales tax.
The proposal would also provide a pathway for municipalities to impose “seventh penny” sales taxes for special purposes in their towns or cities.
On a vote of 55-4, the Wyoming House of Representatives passed the bill on third reading during their Tuesday, Feb. 18 floor session. The bill will move to the Senate for consideration.
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Votes were as follows:
Ayes: BARLOW, BLACKBURN, BLAKE, BROWN, BURKHART, BURLINGAME, CLAUSEN, CLEM, CLIFFORD, CRANK, DAYTON-SELMAN, DUNCAN, EDWARDS, EKLUND, EYRE, FLITNER, FREEMAN, FURPHY, GRAY, GREEAR, HALEY, HALLINAN, HENDERSON, HUNT, JENNINGS, KINNER, HARSHMAN, KIRKBRIDE, LARSEN LLOYD, LAURSEN DAN, LINDHOLM, LOUCKS, MACGUIRE, MILLER, NEWSOME, NICHOLAS, OBERMUELLER, OLSEN, PAXTON, PIIPARINEN, POWNALL, ROSCOE, SALAZAR, SIMPSON, SOMMERS, STITH, STYVAR, SWEENEY, TASS, WALTERS, WASHUT, WESTERN, WILSON, WINTER, ZWONITZERWyoming Legislative Service Office
Nays: CONNOLLY, PELKEY, SCHWARTZ, YIN
Wyoming has a 4% statewide sales and use tax, but counties can impose an additional 1% tax if the majority of voters in the county support such a tax. There are two ways which a county is able to place an item on the ballot asking voters to support a county sales and use tax.
Current rules require either that:
- 5% of electors in the county sign a petition to place the sales and use tax item on the ballot
- the county commissioners pass a resolution to place the item on the ballot and two-thirds of the governing bodies of municipalities likewise pass resolutions
The proposed legislation would lower the threshold on the second pathway to require 50% rather than two-thirds of the governing bodies in a county to pass resolutions to place the local sales and use tax question on the ballot.
Before passing the bill on second reading, the House adopted an amendment to the bill which some legislators argued works against one significant purpose of the proposed legislation.
In addition to the “fifth penny” general purpose county-wide sales tax, the proposed bill contains provisions for counties to impose an additional “sixth penny” tax for special purpose projects. Municipalities within counties which have imposed a general or special purpose sales tax would be able to ask voters to support an additional “seventh penny” sales tax for projects specific to those communities.
However, a municipal “seventh penny” tax would not be allowed to exceed the county-wide tax rate. It could only be imposed 90 days after a county-wide tax has been approved by voters. Furthermore, the municipal tax would have to expire when the county-wide tax expires.
House District 12 Representative Clarence Styvar proposed an amendment on second reading which would require that voters be asked only during general elections to approve the local sales and use taxes. Without such an amendment, the bill would allow counties or municipalities to ask for approval of the taxes in special elections.
House District 43 Representative Dan Zwonitzer argued against the amendment during Monday’s floor session. He said that since the bill includes the provision that municipalities wait at least 90 days after a county wide sales tax has been approved, the amendment would effectively force municipalities to wait two years before bringing a special purpose municipal sales tax to voters, since general elections occur only every two years.
“The issue I have with this is a two year time frame is a pretty long time,” he said. “You’re basically cutting down on the possibilities and projects that a city could bring.”
“I think you are going to cause any type of local city project to never have the time frame [necessary] to raise enough money for the project.”
House District 11 Representative Jared Olsen said on second reading he was in favor of the amendment because voter turnout at general elections tends to be greater than turnout to special elections.
House District 58 Representative Pat Sweeney said he was “totally for the bill” but against the amendment because it “would slow the process down.”
“This was a great compromise, this bill, between our municipalities…and the counties,” Sweeney said. “Remember, this is all new. We have not as a legislature and as a state allowed our municipalities any flexibility.”
House District 01 Representative Tyler Lindholm said that the bill allowed county commissioners to mandate that county and municipal sales and use tax requests be put only on general election ballots.
House District 13 Representative Cathy Connolly also spoke against the amendment. She said that the counties and municipalities could decide for themselves whether such a ballot item needed to be brought forward during general or special elections.
“Let’s leave it for local control,” she said. “Allow localities to tax themselves.”
House District 31 Representative Scott Clem said that requiring such votes to take place during general elections would enhance the amount of civic engagement and would give groups both in favor of and in opposition to a special purpose tax “the adequate time to organize and make their argument in the public sphere before a general election.”
“Two years in not a significant amount of time,” he said.
“When I was a young lad…my grandpa used to say, ‘Good things come in due time,’” he said.
The House voted to adopt Styvar’s amendment, but shot down three other proposed amendments to the bill on second reading.
House District 32 Representative Tim Hallinan introduced an amendment that would have done “away with the permanency of the taxes that are imposed.”
Hallinan said that the proposed legislation would allow a county wide “fifth penny” tax to become permanent after one vote. However current states already allow counties to make sales and use taxes “permanent.”
“[i]f it gets voted down on that time, it can be brought up again,” Hallinan said. “I think it is an unjust way for that to happen. This bill makes something permanent and then we wouldn’t have any control of it after that.”
Current statutes already allow county commissioners the ability to keep the county “fifth penny” sales and use tax “permanent.”
When a proposition on the ballot is approved by voters, at subsequent general elections, statutes require that voters be asked whether to renew the “fifth penny” tax.
An exception under existing rules allows county commissioners to pass a resolution to continue the tax without asking voters to renew if at least half of the governing bodies of municipalities in the county adopt ordinance along similar lines.
Hallinan’s proposed amendment to the bill would have eliminated this ability for counties to renew the county-wide “fifth penny” sales taxes without placing the item on the ballot.
Zwonitzer asked his colleagues to kill the amendment because “fifth penny” taxes have received consistent support from citizens in some counties.
House District 25 Representative Dan Laursen proposed an amendment which would do away with another change proposed under the legislation. Under current law, the governing bodies of at least two-thirds of the municipalities in a county must agree to have a county-wide sales tax request brought before voters.
The bill would require only 50% of municipal governing bodies in a county to agree.
Laursen’s amendment would have moved the threshold back to two-thirds.
“It will bring balance to the smaller cities,” he said. “They need a voice. They need a way to negotiate.”
Zwonitzer argued against this amendment because the rules may put bigger cities at a disadvantage. Cities may make up a large majority of the county population and the rules allow small municipalities to prevent local sales and use tax requests being brought to voters, despite the fact that those municipal governing bodies represent a fraction of the county’s population.
“That’s where I think the inequity plays in,” he said. “This at least makes it a little more fair.”
Zwonitzer added that county commissioners still have to consent to such items being placed on the ballot.
After the two amendments failed, Laursen offered another amendment. He said he was “trying to make this bill a little more palatable. It is getting a little worse with each one of these getting knocked down.”
Laursen’s second proposed amendment would have eliminated an aspect of the bill which would allow municipalities a path to imposing local sales and use taxes even when a county-wide tax is not in place.
The bill allows municipalities to do so only if the county commissioners consent to municipalities bringing such a request to their voters. Zwonitzer said this protection was sufficient.
“Trust that your county commissioners are going to do right [by the voters of a county],” he said.
“This bill has been well vetted,” Zwonitzer said during first reading. “This would allow the possibility of making that ‘fifth cent’…permanent. This means they don’t have to go back and ask the voters every four years for consent.”
Note: An earlier version of this story stated that the legislation would make the “fifth penny” permanent if signed into law. Counties already have the ability to renew 1% county-wide sales and use taxes with out asking voters to renew the “fifth penny” every general election. An amendment to the bill from Rep. Hallinan would have removed that path for counties to renew the tax. That amendment fails. Oil City regrets the error.
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