(Cheyenne, WY) – Wyoming Sen. Tim Salazar, R-Riverton, says the homeowner property tax exemption the Wyoming Senate passed this month fulfills a pledge he made to local constituents to “provide real property tax (relief) for you.”
“Here it is,” Salazar said as lawmakers debated Senate File 69 on third reading Feb. 4. “We now have before us historic property tax relief. (This) is an opportunity for my constituents to finally receive what they’ve been asking for.”
The version of SF 69 that the Senate approved this month would exempt 50 percent of the first $1 million of the fair market value of a single family residential structure – and its associated improved land – from property taxes.
If the legislation had been in place for tax year 2024, Wyoming Department of Revenue Director Brenda Henson said it would have reduced property tax revenues by $254.7 million statewide.
Of that total, about $115.3 million would have gone to local schools, $44.6 million would have gone to the school foundation account, $44.6 million would have gone to county governments, $40 million would have gone to special districts including community colleges, and $10 million would have gone to municipalities, Henson told the House Appropriations Committee on Feb. 6.
Backfill
During a Fremont County Commission meeting last week, Commissioner Mike Jones pointed out that the Senate version of SF 69 didn’t include any backfill funding from the state.
“That’s why the impact is so substantial for us,” he said.
Wyoming Sen. Cale Case, R-Lander, supported removing the backfill from SF 69 this month, however, reiterating his previous argument that backfill funding from the state “divorces” people from “what happens when they vote for lower taxes.”
Plus, he said, the “people paying for the backfill are not the same people enjoying (the) local services” that property taxes support.
“That’s not a conservative system,” Case said. “That’s not a responsible system, (and) it’s not a sustainable system.”
Wyoming Rep. Lloyd Larsen, R-Lander, also spoke against backfill funding when the House of Representatives debated an amendment to restore some backfill to SF 69 last week.
“When we talk about backfilling (this), we’re robbing Peter to pay Paul,” Larsen said. “I’m just not sure … why we’re doing that. (Our) constituents can’t expect to receive a 50 percent tax cut and not see services impacted.”
‘Take a breath’
The Legislature already passed several measures last year to provide property tax relief to local residents, Larsen pointed out last week, urging his fellow lawmakers to “take a breath” and see how those previous efforts play out before “coming back (and) saying we need more tax relief.”
“Those property tax (measures) we’ve put in place are having an impact,” Larsen said, adding, “If we give a 50 percent tax relief on top of all of (that), it’ll be emergency services that will be cut.”
The loss in property tax revenues would lead to “substantial” budget cuts for community colleges as well, Central Wyoming College President Brad Tyndall told the House Appropriations Committee this month – and because college budgets are already “really, really tight,” those cuts would likely impact programs that have been proven to generate a return on investment for state and local economies.
“Doing cuts to this sector just hurts your bottom line overall,” Tyndall said. “It’s not smart. … This doesn’t make sense.”
Amendments
The Wyoming House of Representatives approved six amendments to SF 69 on second reading last week.
Those amendments provided some backfill funding from the state, removed the associated improved land from the property tax exemption, incorporated a requirement that property owners must live in Wyoming for at least eight months of the year in order to be eligible for the exemption unless they’re active duty members of the armed forces who are deployed outside of the state, exempted 50 percent of the first $500,000 of the fair market value of the single family residential structure instead of the first $1 million, and applied the 50 percent exemption to property tax increases as opposed to property values.
Because so many changes were made to the bill on second reading, lawmakers requested an updated version of SF 69 for consideration on third reading this week.
The House is scheduled to consider SF 69 on third reading Tuesday, along with five additional amendments.