Property tax reform is the prevailing focus of the Legislature this year, and for good reason. Across our state property taxes have increased dramatically in recent years.
Since 2021 the average resident’s bill has grown nearly 40 percent. This growth is fueled by rising property values, which have been driven up by an influx of individuals and families leaving cities and other states for Wyoming’s greener pastures.
This year nearly 20 property tax reform bills were proposed by legislators, about half of which have been referred to committees and are being amended in the House and Senate.
The intent of these bills run the gamut, from expanding access to local relief funds to capping how much residents’ bills can increase in any given year.
The common thread through each is that they seek to modify the existing framework but still keep it in place.
These bills all face a similar challenge, how do you pay for it? Property taxes are a local tax and the money stays in your county to provide local services that we all want and need from roads, schools, fire and police to name a few.
Legislating is a team effort and this bill is no different, House Bill 203 – Property Tax Reduction and Replacement Act, takes a whole new approach.
This bill would create a $1 million exemption for single-family residences, thereby eliminating property taxes for 97 percent of Wyoming homeowners. This would move Wyoming’s property taxes to the lowest in the nation. Every home will qualify for the exemption.
For property owners whose home is worth more than $1 million, HB 203 still provides significant savings. A family whose home is worth $2 million, for example, would still have their property tax bill reduced by half.
To offset the reduction in revenue, HB 203 would increase our state’s sales tax by two cents — moving the state tax from 4 to 6 percent. Wyoming’s average local sales tax is 1.4%. Our combined state and local rate is 5.4% which is one of the lowest sales tax rates in the country.
Even after the proposed increase, our state would fall in the middle of the pack nationally. And this sales tax revenue would be distributed in exactly the same way as property tax revenue is distributed now. Furthermore, mineral companies who pay severance taxes will be held harmless in this bill.
Some might balk at the idea of raising sales tax. But, in fact, this legislation will result in a net tax cut —the largest tax cut in our state’s history — and put money back in the pockets of our residents.
The average three-person family in Wyoming pays more than $2,000 in residential property tax, and about $1,200 in sales tax. HB 203 would remove the entire property tax liability for this typical family, while increasing their sales tax bill by roughly $450. That’s a net savings of over $1,500.
Of course, household income and spending vary from family to family, but on average this legislation would save them $1,500 - $2,500 annually. Not to mention, it would lower starter home payments by as much as $250 per month in escrow payments.
It's also worth noting that much of Wyoming’s sales tax revenue is generated by tourists and visitors. About 10-15 percent of the proposed increase would be shouldered by out-of-staters, not residents.
What’s more, this bill builds in protections to ensure it doesn’t negatively impact residents down the road. It authorizes the governor to reduce the two cent if sales tax revenue outpaces the exemption, and the two cents automatically goes away if the exemption is ever removed by statute or courts.
This legislation is novel. It wholly rethinks our state’s property tax model, and, in that way, it may be the strongest declaration of property rights since Wyoming’s statehood.
Overwhelmingly, residents have told me they would gladly pay more in sales tax, which they control, if it means saving even more in property taxes, which they have no control over.
With all new ideas, there are those who want the status quo. Lobbyists are working overtime to delay-discourage-confuse the issue.
If you like this idea, your state Representatives and Senators need to hear from you now. Time is short.
Wyoming residents need property tax relief. The exponential growth over recent years is unsustainable.
The Legislature can tinker at the edges of this crisis with piecemeal solutions, or we can tackle it head-on with bold new thinking.
I believe our residents deserve the latter, and I look forward to working with my colleagues to getting this innovative legislation across the governor’s desk.
Steve Harshman represents House District 37 and has served in the Wyoming Legislature since 2003.
