Case calls recent proposal to eliminate property taxes ‘naive,’ ‘problematic’

(Gillette, WY) – Wyoming Sen. Cale Case, R-Lander, said a recent proposal to eliminate property taxes in the state in favor of a consumption tax is “naive” and “problematic.”

The proposal came from Wyoming Sen. Bob Ide, R-Casper, who said local residents are having a hard time navigating all of the property tax exemptions, caps, and refunds the state has implemented over the past several years. 

“I mean, for the common person to understand what their property taxes are, (you) have to hire teachers to bring them in,” he said during a Joint Revenue Committee meeting this month.

But Case pointed out that Wyoming’s property tax system only became that “complicated” because the Legislature has been “ramming forward” tax relief policies that “aren’t that well thought out.”

“We have done all that ourselves,” he said during the Revenue Committee meeting. “We’ve got complicated things on the books that we created – and people in this room created – and we’re mad about that. (But) that’s what happens when you throw bills out there … without really thinking of the ramifications.

“We need to study the topic first before we throw a resolution out to eliminate property taxes from the Constitution.” 

Consumption tax

Case also noted that consumption taxes – or sales taxes – come with a lot of the same issues that property taxes pose.

For example, he said, the property tax system is often criticized because wealthier communities with higher property values generate more revenue – but those same communities tend to generate more sales tax income as well because of “the unequal location of where commerce occurs across our state,” so “you would still have a distributional problem with a consumption tax.”

Sales taxes also have a disproportionate impact on less wealthy people, Case said, because those people tend to “spend more of their income” on commerce.

“Consumption taxes are regressive,” he said. “They hit poor people harder.”

Wyoming Rep. Liz Storer, D-Jackson, added that the sales tax rate would have to more than double in order to cover the loss in government revenues that would result if property taxes were eliminated. 

“I don’t see how we would make up the difference,” she said. “I just don’t think that’s really the direction we need to be going.”

11-3 vote

Case urged the committee to consider the topic further before drafting a bill reflecting Ide’s proposal this month.

“Think about (what) a consumption tax would look like that would replace property taxes in Wyoming,” he said. “Don’t just throw a bill draft out there. …Then we’ll get another thousand emails that say ‘vote to get rid of the property tax’ when it’s not being thoughtful.”

Regardless, the committee voted 11-3 in favor of drafting a bill, which Ide said would “open up the conversation” about “what sales tax increases we may need to replace” property tax revenues.

“We can say that it’s naive,” Ide said. “(But) I’m not afraid to look at something new. … We need to look at some real reform at this point.”