CASPER, Wyo. — Wyoming and the United States operate as republic in which the people elect representatives who then have the authority to establish laws, including the ability to impose taxes.
Wyoming’s Senate Revenue Committee rejected an effort that could have moved the state in the direction of direct democracy rather than the republican form of government during their Tuesday, Feb. 23 meeting.
The committee rejected Senate Joint Resolution 01 on a vote of 1-4 during the meeting. That resolution wouldn’t have implemented full-blown direct democracy, but proposed putting a question before voters to amend the Wyoming Constitution such that voters would have to approve any new taxes or tax hikes.
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The so-called “taxes to voters” proposal aimed to “give people a vote on any new tax or tax increase,” Sen. Tom James (Sweetwater County) said during the meeting. James was the primary sponsor of the resolution.
The idea was not to eliminate the role of elected officials in imposing taxes entirely, according to James. He said that the legislature and local governments would still have the ability to propose taxes, but that if such propositions were passed, the voters would need to approve any new taxes or tax hikes during the next general election.
While the proposal appears to be a move away from how republics function with the power to impose taxes lying with elected officials, James argued that the proposal “keeps us a republic and it goes through the republican process.”
James said that he has spoken with citizens who support the concept and that he thought it would encourage the government to look at other ways to find new revenue besides through taxation.
“The people should have the ability to vote on subjects that will impact their lives,” he added. “I’m hoping this will encourage that diverse economy that we so badly need.”
Sen. Wendy Schuler (Uinta County) said that she understood the intent of the bill and agreed that it is important that constituents have a voice, but said that voters have the ability to oppose taxes by voting elected officials out “if they don’t like what we are doing.”
She said that she thinks the state is in a situation where spending cuts are needed but that there is also a need to think outside the box and find new sources of revenue.
Schuler added that Wyoming has low taxes compared with other states.
“We have no income tax, no corporate tax, our property taxes are some of the lowest in the country, our sales and use tax are next to the bottom, our fuel tax is toward the bottom,” she said. “It is not like we have been taxing the heck out of Wyoming residents.”
“No one likes to pay taxes, but I think for the amount of services that we get in our state, we have been taxed very little [compared to other states in the region].”
Schuler said that having to wait for the next general election before any new taxes could be imposed “could put us in a kind of precarious position.”
Wyoming Farm Bureau Federation Executive Vice President Ken Hamilton expressed support for the proposal during the meeting.
“I think this does make good sense,” he said, adding that the Wyoming Farm Bureau Federation have “traditionally been resistant to tax increases.”
He noted that the proposal wouldn’t necessarily guarantee lower taxes since voters could approve of new taxes or tax increases during general elections.
However, Hamilton said that he thought the proposal would put “a little bit of a brake on things.”
Equality State Policy Center Executive Director Chris Merrill expressed opposition to the proposal.
“It is our perspective that this would be an inappropriate and, frankly, fiscally irresponsible approach to tax policy,” he said.
Merrill said that questions of taxation and tax policy should remain with the legislature and the governor and that setting tax policy is one of the legislature’s primary responsibilities.
“This is the hard work you are elected to do and these are the hard decisions that we elect you to make,” he said.
Merrill noted that tax and revenue structures are complex and demand that legislators “develop a high level of knowledge and expertise” to get right. He added that it is “important for a state to be nimble” and have the ability to adjust policies in response to changing situations.
He said that passing the resolution “would be the opposite of leadership.”
Wyoming Education Association Government Relations Director Tate Mullen said that the proposal would be “an abdication of legislative fiscal responsibility.”
He added that “working through a budget is extremely difficult” and often takes new legislators a few years to gain the expertise to fully understand the revenue structures.
Mullen argued that it would be irresponsible to ask the public to decide on taxation matters when it is the “legislature’s duty to perform these roles.”
He added that similar legislation in Colorado came with negative consequences. Colorado voters approved a “Taxpayer Bill of Rights” (TABOR) amendment in 1992 which requires voter approval for new taxes.
Mullen said that such bills aim to reduce government spending, but that this is not a problem Wyoming has.
“As we know, in the State of Wyoming we do not have a spending problem, what we have is a revenue problem,” he said.
Mullen said that Colorado’s TABOR rules have led to decreased quality of education. He added that there is some disconnect with voters in terms of what they want.
While voters may say they want lower taxes, they also express a desire for strong education and other services. House Majority Floor Leader Albert Sommers (Sublette County) said during a Feb. 9 press conference that legislators had been presented with results of a University of Wyoming poll which he said indicate the public generally don’t want to see K-12 funding cuts but also don’t want to see new taxes.
Senate Majority Floor Leader Ogden Driskill (Crook, Campbell, Weston) said during the press conference that he thought UW’s polling was accurate and that people in the state tend to “want their cake and eat it too.”
Mullen said on Tuesday that “a lot of our Wyoming citizens, we love our services….we like our roads cleared, we like our schools well funded.” However, he said people may not have an understanding of where funding for those services is coming from.
“There is a disconnect between how you receive those services and how they are paid for,” he said.
In Colorado, Mullen said the TABOR rules have led to “the rapid growth of special districts” in which areas where voters are willing to agree to taxes are able to fund things like schools and fire stations but lower income areas have lost out with taxes being rejected.
“This is an irresponsible tax bill,” he said.
Wyoming County Commissioners Assocation Executive Director Jerimiah Rieman expressed opposition to the proposal.
“We are concerned that this could present a situation where we are not responsive to the needs of our communities,” he said, adding that communities may need additional taxes when there is need for a new fire station or water systems.
He added that the proposal could lead to increased administrative costs for general elections since the “ballot would no doubt be significantly longer.”
Rieman added that economic diversification in the form of new businesses wouldn’t help government revenue pictures without the ability to create “a more diverse tax structure in order to benefit from new businesses.”
James said that people don’t want a more diverse tax structure.
“They want more private sector businesses,” he said. “They want jobs. They don’t care about more taxes….we don’t care.”
James said the state needs more businesses but that he was opposed to any expansion of government.
Rieman said that the WCCA also wants to see entrepreneurial development in the form of more businesses coming into Wyoming communities but that new businesses also add to counties’ and the state’s burden to accommodate new businesses.
Bob McLaurin with the Wyoming Association of Municipalities also expressed opposition to the proposal.
“We don’t believe this is necessary,” he said. “When voters don’t like what elected officials are doing, they replace them.”
He added that cities and towns already have the ability to put questions about taxes before voters in the form of referendums if they so choose.
Wyoming Association of Community College Trustees Executive Director Erin Taylor said that the proposal “gets Wyoming away from a representative government.”
James said that he was not surprised to hear testimony from people representing government entities speaking against the proposal.
The vote rejecting the proposed resolution was as follows:
- Ayes: JAMES
- Nays: BALDWIN, PAPPAS, SCHULER, CASE
Ten legislators sponsored the proposed resolution:
- Senator(s) Biteman, Bouchard, French, James and McKeown
- Representative(s) Fortner, Gray, Laursen, Rodriguez-Williams and Wharff
The Wyoming Constitution currently allows taxes to be imposed either with the consent of the people “or their authorized representatives.” The proposed amendment would have striken the ability of lawmakers represented by the people to impose taxes without voter consent in a general election.
The proposed resolution would have required support from two-thirds of the Wyoming House of Representatives and Senate to pass. If it had passed, it would have put a question on whether to amend the Wyoming Constitution before voters at the next general election.
The following statement would have accompanied the ballot question put to voters:
Currently, the Wyoming Constitution allows the legislature and local governments to impose taxes through the normal legislative or rulemaking process.
The adoption of this amendment would require the imposition of any tax to be approved by a vote of the citizens of Wyoming.
Putting the question before voters would have come with its own costs. The Legislative Service Office says that the Secretary of State’s Office would need to spend approximately $34,000 to put the question before voters.
“This estimate is based on anticipated publication costs for resolutions of this type of $16,000 for introductory lines plus $2,000 for each line of text in the proposed resolution and proposed ballot language,” the LSO says.