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House reject $600 million in tax relief for Wyoming residents not allowed under CARES Act

Protestors assemble in Pioneer Park, in downtown Casper, in the wake of concerns surrounding COVID-19. A spokesperson at the event urged Wyoming's Governor to lift closures and restrictions put into place, during the pandemic. (Trevor T. Trujillo, Oil City News)

CASPER, Wyo. — The Wyoming House of Representatives shot down an amendment to House Bill 1001 that would have appropriated up to $600 million toward property and sales tax relief for residents of Wyoming during the special session on Friday, May 15.

$600 million equals 40% of the $1.25 billion in federal Coronavirus, Aid, Relief and Economic Security (CARES) Act qualifying funding which has been received by the state which the legislature is working to use to address impacts from the COVID-19 pandemic.

The amendment was proposed by House District 57 Representative Chuck Gray who acknowledged that federal guidelines for use of the CARES Act funding can not go toward the purpose proposed under the amendment.

He argued that the United States Congress could change their guidance on how the CARES Act funding can be used and noted that his proposed amendment would only provide the tax relief if the federal government modified those guidelines.

Gray said that if federal guidelines change, he’d like a mechanism in Wyoming’s legislation that would provide the tax relief “immediately to the people.”

Other representatives argued that appropriating funding based on speculation that the federal government might change their rules on how the CARES Act funding can be used would not be a wise decision.

“We at this point don’t have the authorization to do that,” Minority Whip Charles Pelkey said adding that the amendment “would tie up about half [of the available CARES Act funding under the bill] based on speculation..”

House District 09 Representative Landon Brown questioned an aspect of the amendment which would call for the legislature work to request that the federal government change their guidance about how the CARES Act funding can be used, saying he was “not sure how this legislative body can request Congress get that done.”

“I just don’t see it happening,” Brown added.

House District 07 Representative Sue Wilson asked for clarification regarding the use of the term “resident” in the amendment, asking whether the tax relief would be available only to individuals or also to businesses and the energy sector.

House District 58 Representative Pat Sweeney raised a similar question.

“In the intent of this, I see no caps, no restrictions, just the word resident,” he said.

Sweeney asked whether the intent was to provide tax relief to not only low income people “but also to the super wealthy?”

House District 21 Representative Evan Simpson said that he would be “embarrassed to pass this amendment,” noting that the purpose of the CARES Act funding is to provide relief to those most impacted by the pandemic.

“I’ve not been financially impacted by this virus,” he said, calling the tax relief idea “just a freebie to people that haven’t been impacted at all. We’re not just trying to line people’s savings accounts.”

House District 31 Representative Scott Clem spoke in favor of the amendment and said that he saw it as similar to the $1,200 federal relief provided to most adult Americans. Speaker of the House Steve Harshman noted that those $1,200 payments were not made available to people with incomes over $90,000 a year.

Clem argued that most people have been impacted by COVID-19 in some way.

Pelkey said he thought the CARES funding should be targeted toward those who need it most like minimum wage restaurant workers impacted by the pandemic.

“The structure of this amendment would provide property tax relief to everyone across the board,” he said. “These funds are really designed to assist those who are impacted with immediate consequences. We need to focus our efforts on those most in need.”

House District 22 Representative Jim Roscoe agreed. He said he strongly opposed the amendment.

“I would be embarrassed to take this home to my constituents,” he said. “The people that really need it would be losing out. I don’t believe it is actually an economic stimulus at all.”

House District 08 Representative Bob Nicholas said that giving people tax relief now could be a problem with the state looking at a possible $1 billion deficit heading into the 2021 legislative session. He said that the state’s economic woes might force the legislature to pass tax increases and not using the CARES Act funding wisely could make tax increases more likely.

He added that the state’s “rainy day” funds could be used up in about three years, saying that the legislature needs to “look down the road a lot further.”

“We’ve got some very, very serious issues to address,” Nicholas said. “This is not the best way for us to expend these dollars.”

Speaker Pro Tempore Albert Sommers said he was concerned passing the amendment would “create an expectation with the public that we can actually get this done.”

“If this happens, it is going to be a federal bill,” he added.

Majority Whip Tyler Lindholm said he likes the concept of the amendment.

“I honestly love this amendment,” he said.

However, he said that federal guidance on how the CARES funding can be used “is pretty clear.”

“The problem is they could audit us and all of a a sudden the state could owe these funds back to the federal government,” Lindholm added.

House District 36 Representative Art Washut said that he was in favor of the amendment and that auditing wouldn’t be a problem since the amendment states that the tax relied would only be provided if federal rules allow.

House District 03 Representative Eric Barlow asked whether the amendment would create a second appropriation under House Bill 1001. He said that if so, the entire bill would become subject to the governor’s line item veto.

Gray argued that was not the case, but Harshman said it would as he thought the amendment “set up a requirement to spend funds.”

“I think it clearly does,” he said.

Harshman added that when the Joint Management Council began to work on legislation to use the CARES Act funding “the first idea was to do a sales tax holiday.”

“A tax holiday would be a wonderful thing,” he said. “This is not the bill to do it. This is the wrong car to put it in.”

Harshman added that he thought the Mineral Committee could work toward more targeted tax relief to help the state’s ailing energy sector.

House District 60 Representative John Freeman said that he wanted to “urge caution on this amendment” since the proposed use is not currently authorized.

“I think the worse thing we can do is tie up $600 million,” he said, adding that he thought doing so would make constituents very upset.

The House rejected the amendment on a vote of 18-42 before passing House Bill 1001 on second reading. If the House pass the bill on third reading, it would move to the Senate. If House Bill 1001 and it’s mirror bill Senate File 1001 pass both chambers, they will be assigned to a joint House and Senate Committee who would work to resolve differences.

Only one piece of legislation could ultimately be passed into law.

The Wyoming Department of Health provides COVID-19 case, variant, death, testing, hospital and vaccine data online. The department also shares information about how the data can be interpreted. COVID-19 safety recommendations are available from the CDC.