There aren’t many members of the Wyoming Legislature who will openly say homeowners don’t deserve more property tax relief. The best way to provide that without upsetting local apple carts is an intricate puzzle legislators are trying to piece together.
A significant change was made to Senate File 69 on Tuesday, one of the major property tax bills moving through the Capitol, entirely removing a backfill option for local governments and schools, while also increasing the tax reduction from 25% to 50%. That single change would cost a dozen counties in Wyoming each more than $1 million per year if it stands pat.
Wyoming state government doesn’t receive any property tax revenue.
Around 64% of property tax revenue goes to local schools and the School Foundation Program Account. The remainder goes to local governments to fund services such as repairing roads and providing local EMS services.
“We’re going to become California with the way we’ll be defunding critical services,” said Ashley Harpstreith, executive director of the Wyoming Association of Municipalities. “There’s a complete disconnect between taxes and services. What are we willing to pay for and what is the threshold of those services?”
Sen. Tara Nethercott, R-Cheyenne, told Cowboy State Daily that she supports removing the local backfills as a way of helping voters understand the cause and effect relationship between taxes levied and services rendered, which they can make future decisions based upon.
“We want to find the right policy so people can understand the connection between property tax and services offered more correctly,” she said. “So, the people who want tax relief can have a better understanding of the consequences and the lack of that tax revenue from fiscal policy.”
Sen. Troy McKeown, R-Gillette, said he supports getting rid of backfills because of Gov. Mark Gordon’s veto of a 25% property tax reduction bill in 2024 that contained them. In his veto letter, one of Gordon’s criticisms of the bill was its backfills.
What’s It From?
The property tax cuts come in response to the large tax increases seen after the COVID-19 pandemic.
After 2022, the growth in these rates returned to historical norms, but many have argued that local governments have not increased their services as a result of the increased revenues that outpaced the rate of inflation.
The increases were as high as 50% in some parts of the state like Teton County, but they weren’t evenly dispersed, with some counties experiencing only modest increases.
In Carbon County, SF 69 would shave off $902,038 based on 2024 numbers.
“It’ll kill us,” said Carbon County commissioner Sue Jones. “If you want a 50% reduction on your property tax, then you’re also going to see a significant reduction on your law enforcement, your EMS, your museum districts, your everything. Your schools are going to be reduced.”
Jones also mentioned how Carbon County is the beneficiary of significant mineral revenues and very few residential properties there posted a larger than 4% tax increase in 2024. Other counties like Niobrara, Goshen Platte and Weston are much more dependent on this source of revenue for their overall fiscal pictures.
There are only two counties in Wyoming that are legally allowed to raise their property taxes more by increasing their mills. The other 21 counties have maxed out at the state’s cap of 12 mills.
Pulling 50% of the property tax revenue in Niobrara County based on 2024 numbers would result in a $96,530 hit in that county.
Although that may not seem like a significant amount of money, it’s more impactful when considering the county has only seen its property tax revenue increase by $41,108 since 2018. It was this small increase in revenue that allowed Niobrara County to finally offer health insurance for its employees a few years back.
Special districts that support groups like hospitals and cemeteries receive 8% of the state’s property tax revenue. Some of these groups have been targets of tax cut supports for a perception they’ve been keeping too much money in their reserves.
More Cuts?
A different bill brought by state Sen. Eric Barlow, R-Gillette, would follow on the heels of a constitutional amendment passed by voters in 2024 separating residential property into its own tax classification.
Barlow’s bill simply defines what’s considered residential real property, but it allows a future opportunity to reduce the state’s residential tax assessment rate from 9.5% to 8.3%.
Harpstreith said she fully expects that change to happen during the legislative session, which her organization doesn’t support. Wilson and Harpstreith believe it will simply shift the burden on the minerals and industrial industries and possibly lead to a state income tax someday.
“I think it’s shortsighted and will come back around,” Harpstreith said. “It’s unbalanced and is eroding the tax base.”
She also warned that it will make Wyoming an even more desirable place to live, which will further increase property and land prices.
“This is not going to help our young people,” she said.
Possible Solutions
Sen. Brian Boner, R-Douglas, told Cowboy State Daily he doesn’t support removing backfills and expects them to be included in the final version of SF 69 or if another property tax bill gets across the finish line.
Nethercott also stressed that solutions are still being worked on and the legislative session is long from over. On Wednesday, the 50% tax reduction bill SF 69 was tabled so lawmakers could study more about what it does.
“We want a full understanding of what the bill does, a full policy understanding of the issues to make sure we save time for good policy debate,” she said. “We want to make sure we take time to get the right policy.”
McKeown also pointed to Senate File 60, a bill that would give 4% more sales tax revenue distribution to local governments than what they currently receive without raising the overall taxes, as a possible solution.
Over the 2025 interim session, McKeown said the Senate Revenue will look at making larger reforms that he believes will make Wyoming’s tax structure more equitable for all.
“If we’re successful there, it won’t be an issue,” he said, referring to backfill issues.
Harpstreith said local governments would be amendable to this as a possible solution if their share was increased by 15% more than that, to a 50% slice of the sales tax pie.
Leo Wolfson can be reached at leo@cowboystatedaily.com.
