By Leo Wolfson, State Politics Reporter
Wyoming voters have given more flexibility to local governments to invest their tax money on stocks and equities, passing Amendment A in Tuesday’s general election.
The amendment gives cities and counties the go-ahead to invest in higher-risk stocks and equities. They’re not required to expand their investment portfolios, but would have the option to if they choose.
Voters sent a clear message they trust local governments with their tax money, giving Amendment A a green light with 103,366 votes for the measure to 78,697 votes against.
All that remains to become law is an amendment to the Wyoming Constitution, as higher-risk investing is now prohibited. Any amendment to the Constitution requires a two-thirds supermajority vote from the Wyoming Legislature to be enacted.
Matt Hall, city of Cody mayor and president of the Wyoming Association of Municipalities, said he considers Amendment A passing as a major win for cities and counties.
“We’re pretty satisfied with the outcome,” he said.
The Wyoming County Treasurers Association was opposed to the amendment, arguing it sacrifices financial safety for only potential gains, a risk that shouldn’t be taken when tax money is involved.
Still Ground To Cover
Although the amendment must still get through the Legislature to establish framework and regulation of the investing, Hall said he sees this as more of a procedural step rather than another hurdle.
“The Legislature initially passed this bill,” he said. “We’ve got past the bigger of the two hurdles.”
The state Legislature already approved going to voters for the amendment in a 2021 bill that passed 46-13 in the House and 25-5 in the Senate.
Municipalities now only can invest in low-yield, high-security fixed-income investments like certificates of deposit, federal agency bonds and U.S. treasury bonds. State government, however, is not held to the same standard and is allowed to invest in equities such as stock in corporations. About 25% of Wyoming’s general revenue is in investments.
Although Jeremiah Rieman, executive director of the Wyoming County Commissions Association, told Cowboy State Daily in October the amendment would likely not be handled until the 2024 legislative session, Hall and WAM Executive Director Brian Fraser expressed optimism it may be addressed in the upcoming session this winter.
“There’s a lot of planning to do, but I’d like to see it done,” Fraser said. “I think we can make a regulatory model that is pretty simple.”
Hall stressed that fairly conservative guidelines would be put in place to prevent “rogue” governments from making high-risk investment choices with the taxpayers’ reserve money.
Cheyenne Mayor Patrick Collins said ensuring this piece would be a critical part of deciding whether to invest his city’s money in stocks and equities.
“If we have the reserve, and have the ability to use it, why not maximize those dollars?” Collins asked.
In 2016, Wyoming voters approved Constitutional Amendment A, which allows the Legislature to invest additional state money in the stock market. Collins said it had originally been assumed that this amendment change would apply to local municipalities at the time, but it was later determined by the Wyoming Attorney General that the action did not include those entities.
In 2020, a statewide amendment to remove the constitutional limit on debt that a municipality may incur for municipal sewer projects failed despite receiving a majority of support from voters. This was because 30,870 voters failed to place any vote on the amendment, undervotes that must be counted as opposition in a constitutional referendum.
There were far fewer undervotes this time around, allowing the amendment to pass by about 8,500 votes.
“I think the education component was really key, getting the information out there,” Hall said.
Although larger counties and cities would make up the vast majority of entities likely to take advantage of the new investing opportunity, Hall said Cody, a town of roughly 10,000 people, and neighboring Powell, a city of 6,418 people, are both interested in the investment opportunity.
“It would help us get a little more competitive rate on our reserves and help fund projects and government operations,” Hall said. “Powell would like to utilize this sooner rather than later.”
Along with Amendment A, voters Tuesday also voted on a constitutional amendment that would have raised the mandatory retirement age of Wyoming’s supreme court and district court judges from 70 to 75.
That was rejected by a margin of 48,000 votes.