CASPER, Wyo. — Counties in Wyoming are able to impose sales taxes for special purpose projects. Under current rules, such special purpose taxes must go toward specifically defined project and cannot go into a reserve account.
The Wyoming House of Representatives passed a bill on first reading during their Monday, Feb. 17 floor session which would allow counties to impose such taxes for the purpose of saving the revenue in reserves, which are sometimes referred to as “rainy day” funds.
House District 57 Representative Chuck Gray spoke against the bill, saying that Natrona County voters have rejected specific purpose sales and use taxes in the past.
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“The people of Natrona County have been very clear,” he said.
Gray argued that counties are able to save funds if they have a general purpose “fifth penny” sales and use tax. This tax is called “fifth penny” because the state imposes a 4% sales and use tax and counties can ask voters to support an additional 1% local tax.
When speaking with local government officials in Natrona, Gray said that he urges them to save more of the “fifth penny” revenues but that they give him a number of reasons why they don’t want to do that.
He said that the proposed legislation “provides a dramatic incentive to pursue that sixth percent” sales and use tax.
House District 20 Representative Albert Sommers said he was in favor of the legislation.
“If county commissioners become reckless, the voters will throw them out,” he said.
House District 01 Representative Tyler Lindholm also supports the legislation.
“Right now our sales taxes are through the roof,” he said. “Let’s [allow counties to] capture as much of that as we can.”
Lindholm added that the state has a “rainy day” fund and that it made sense to him to allow counties the ability to save tax revenues for future use as well.
House District 06 Representative Aaron Clausen explained the bill during an introductory vote on Feb. 11.
“What this is geared for is these counties that are maybe losing a power plant or a coal mine to be able to stock some money away, similar to what we do for the Permanent Mineral Trust Fund, to help them rely less on state funds and be more self sufficient,” he said.
The bill would allow counties to deposit special purpose tax revenues in reserve account, but would limit how these could be accessed.
Each fiscal year, counties would only be allowed to expend up to 5% of the funds in the reserve account or up to 20% “of the funds in the reserve account if the total operational revenues for the county in the immediately preceding fiscal year were at least thirty‑five percent (35%) lower than the fiscal year prior to the immediately preceding fiscal year. Funds expended pursuant to this subdivision shall not be included in calculating total operational revenues in any fiscal year.”
The House will need to pass the bill on two further readings before it would move to the Senate for consideration.
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