For the last 40 years, the Wyoming Realtors Association has been trying to separate residential from the “all other” category of taxing property to allow more flexibility in handling the assessment and valuation of those properties.
Residential property now is categorized with agriculture and commercial.
House Joint Resolution 2 would break out residential. It took a step forward Thursday, with members of the House Revenue Committee voting 6-3 in favor. If approved by the Legislature, the measure will still need final approval from Wyoming voters.
Laurie Urbigkit, representing the Wyoming Realtors Association, told lawmakers she believes the amendment will have an excellent chance of winning over voters.
“The Wyoming Realtors, in conjunction with the National Association of Realtors, had a poll done between Jan. 3 and Jan. 5 this year, 2023,” she said. “Fully three-quarters of the voters that we polled are strongly in favor of this.”
Property Taxes Are Too High
The poll included 500 registered voters who were asked about property taxes, which have been soaring in Wyoming in the wake of high inflation that followed on broken supply chains and other issues during the COVID-19 pandemic.
Prior to the pandemic, property taxes were rising 3% to 4% annually, according to state figures. But last year, they jumped 16% on average across the state.
The increase was much larger in some counties, like Teton County, where it was 36%.
“A majority believe that their property taxes are too high,” Urbigkit said. “And most agree that housing costs are making Wyoming unaffordable for young adults.”
These beliefs crossed party lines and demographics, Urbigkit said.
“Young, old, homeowners, renters, Democrats, Republicans, Independents, Libertarians,” she said. “It was a vast majority of all of them.”
Urbigkit said her organization is committed to ensuring that Wyoming voters will be well educated on the amendment and understand its consequences.
Retains Link To Other Category
Urbigkit also testified that her organization supports an amendment brought by Rep. Steve Harshman, R-Casper, which he said would limit the number of subclasses the Legislature could create to two: one for residential owner-occupied and another for those who might own multiple residences.
That part of the amendment failed.
The second part of the amendment, which kept a 4% link for residential property with all the “other” types, passed.
Harshman said that is crucial to ensuring things remain equitable for taxpayers.
“Right now, with industrial at 11 and a half, the lowest any other class could go to is, you know, 7 and a half,” he said. “So that keeps them linked together. I think that is an important part of our Constitution.”
Keep It Simple
Laramie County Assessor Ken Gill, representing the Wyoming County Assessors Association, also testified in favor of House Joint Resolution 2, but Brad Moline, with Wyoming Farm Bureau, was against breaking residential into its own category.
“We like the simpleness of having these classes,” he said. “We want keep it the way it is.”
Moline said the Legislature has several other options of giving residential property tax relief.
“Let’s see how those work out,” he said. “Changing the Constitution is a big deal. And it should be. It’s a very important document.”
Among the alternatives that Moline supports is House Bill 98, which the committee took up immediately after considering House Joint Resolution 2.
What House Bill 98 Does
This bill provides a property tax exemption of up to $50,000 in value for a homeowner, which works out to $600 a year.
“This is basically all residential and commercial, not to exceed 25% of the total fair market value,” Harshman said.
People also must be a resident of Wyoming for at least five years to apply for the exemption.
The fiscal note attached to the bill puts the cost of that at $35 million a year.
Moline told lawmakers he felt this bill is more targeted to those who need the assistance.
“I really appreciate the additional added language that looks after my guys in agriculture,” he said. “So many of us have incorporated for other purpose. But this clarifies that if it’s a relative, somebody actively involved as a family member in a family corporation, that one residence will still qualify for this homestead exemption.”
Reiman Worried About Less Wealthy Counties
Jeremiah Reiman, meanwhile, testifying on behalf of the Wyoming County Commissioners Association, told lawmakers he is concerned about the effect on smaller counties whose revenue will be adversely affected by House Bill 98.
While $50,000 isn’t a lot for some communities, Reiman said, that’s not true for many smaller communities, particularly those in the eastern part of the state.
In Niobrara County, for example, median home prices are less than $250,000.
“You’re exempting one-fifth of the price of those homes,” he said. “That is a big deal for those communities, as you’ve seen from the information that I’ve presented to you previously about residential property taxes in those communities.”
Erosion Of Tax Base
Ashley Harpstreith, executive director for the Wyoming Taxpayers Association, testified against HB 98.
Among the concerns she listed is erosion of the tax base and no reasonable sunset or clawback provisions.
“It is not equitable as the bill shifts taxes from one class to another and creates pressure to increase taxes on other taxpayers for critical services,” she said. “It’s not stable, as the benefit of the exemption does not outweigh or offset a sustained loss of tax revenue created by the exemption.”
Harpstreith said she’s sympathetic to taxpayers experiencing increased assessments, but the proposal does not provide targeted relief, nor is it means tested or qualified.
“The exemption is applied to everyone whether they want the relief or not,” she said. “Finally, it is not transparent, as there is no application or public reporting required to measure the exemption and the benefits.”
Sunset, Backfilling Revenue
Rep. Harshman had an amendment ready for House Bill 98 to address some of the concerns. It proposed a two-year sunset and backfilling local governments with $35 million for each of two years, for a total of $70 million.
The sunset part of the amendment was approved, but there was a motion to drop the $70 million to $40 million, which passed.
Several lawmakers still spoke against the measure, including Rep. Ember Oakley, R-Riverton.
“I like the idea and the effort,” she said. “But it ends up just not being targeted enough, because nobody wants to talk about, you know, paying taxes. But one of the few ways Wyoming people actually pay taxes is property taxes.
“And this ends up getting a bunch of people who are capable, able to pay their taxes and cuts that out.”
That, in turn, means the hit for Wyoming towns and counties is larger than it needs to be.
Other “no” votes echoed similar concerns, but there were not enough to sink the bill.
The nays included Reps. Andrew Byron, R-Jackson, David Northrup, R-Powell, and Liz Storer, D-Jackson.
Where The Bills Stand
House Joint Resolution 2 was advanced to the floor of the House on a 6-3 vote, with an amendment that keeps residential property rates at no more than 4 percentage points more than that prescribed for all other.
House Bill 98 advanced to the floor of the House on a 5-4 vote with an amendment that creates a two-year sunset, as well as a backfill of $40 million to make up for some of lost revenue that counties will experience. An amendment that would have raised the exemption to $100,000, or $1,200 for a homeowner, failed.