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Wyoming Hospitality, Retail Tax Collections Up Over Pre-Pandemic Levels

in News/Taxes

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By Jim Angell, Cowboy State Daily

Wyoming’s hospitality and retail sectors were the high spots in the state’s economy in August and have been for the last two years, according to figures released by a state agency.

The latest report on the state’s economic indicators showed that not only did sales tax collections for those two sectors grow in August compared to August 2020, but they posted gains over pre-pandemic levels.

“Not only did these two sectors experience substantial increases relative to August 2020, they also experienced large increases when compared to August 2019, up 26% and 13.5% respectively,” said the report “Wyoming Insight,” prepared by the Economic Analysis Division of the state Department of Administration and Information.

The monthly report, which tracks figures that indicate the health of Wyoming’s economy, showed tax collections in the leisure and hospitality industry in August increased by $5.4 million over the same month in 2020, a 66% gain.

Retail trade tax collections, meanwhile, increased by almost $4.5 million over August 2020, a gain of 17.9%.Meanwhile, tax income for the education and health sector fell by $2.8 million from 2020, a decline of 54.2%.

Every county in the state except two saw an increase in total sales tax collections in August over 2020 figures, the report said, led by Teton County with an increase of almost $4.7 million from one year ago, 66.4%.

Carbon and Converse counties both saw declines in tax collections, 62% and 42.6%, respectively. The report noted that the lack of wind power construction projects in August skewed some of the annual tax collection comparisons.

The leisure and hospitality industry also accounted for the largest increase in jobs during the one-year period, with 4,900 new jobs created in August compared to 2020. Across all sectors, Wyoming added 8,300 jobs during the year for a total of 273,000.

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Wyoming Sales Taxes Jump In May From 2020

in News/Taxes
State checkbook reveals $1.2 billion in out-of-state expenditures

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By Jim Angell, Cowboy State Daily

Wyoming’s sales and use tax collections in May increased by almost 14% over May of 2020, according to a state agency, due largely to a serious slump in collections one year ago caused by the coronavirus pandemic.

The state Department of Administration and Information’s Economic Analysis Division, in its monthly report “Wyoming Insight,” said sales and use tax collections in May totaled about $55.5 million, an increase from May of 2020 of $6.7 million, or 13.7%.

Much of the increase was attributed to the fact that sales and use collections lagged in 2020 because of last year’s coronavirus pandemic.

“May 2020 is when statewide collections were at (their) lowest point during the pandemic,” the report said. 

Teton County led the state for gains in sales and use tax collections, collecting $1.7 million in May, a 69.8% increase over figures from May 2020. Laramie County had the highest total tax collections in May at almost $2.4 million, a 32.5% increase.

Converse County’s sales and tax collections declined by almost $1.9 million in May compared to one year ago, 45.1%. Weston County had the highest percentage drop in collections, 46.1%, or $362,000.

“Wyoming Insight” provides monthly updates on the figures that indicate Wyoming’s economic health.

In addition to sales and tax use collection information, it provides data on mineral prices, the state’s cost of living and unemployment rates.

According to the report, the state’s mining industry continued to show the greatest losses in terms of total collections, almost $1.9 million in May compared to 2020, while the construction industry saw a decline in tax collections of 33% from 2020, $392,800.

However, the leisure and hospitality industry, hard hit by the pandemic-forced closures of 2020, saw sales and use tax collections increase by 73.4% in May from last year, $2.3 million.

The retail trade sector saw collection gains of almost $3.7 million in May over 2020, an increase of 17.6%.

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Bill Proposing New Sales Tax For Schools Moves to Wyoming Senate

in News/Taxes/Education

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By Wendy Corr, Cowboy State Daily

One down, one to go.

A pair of bills proposing increases in the statewide sales tax being debated in the Wyoming House of Representatives saw divided fortunes Tuesday.

Each proposed a statewide sales tax, one to benefit schools and the other to benefit local governments.

But the bill that backers said would have provided a stable funding source for cities and counties through a new sales tax died on a vote of 10-50, while the bill that would help fund schools around Wyoming lives on.

House Bill 173, which lays out a formula for funding the state’s schools, would allow a one-half cent sales tax to be imposed statewide that would help reduce the $300 million deficit currently facing Wyoming schools – but only if the state’s reserve account falls below $650 million.

Brian Farmer, executive director for the Wyoming School Boards Association, said the tax included in the education bill seeks to offset the downturn in the mineral industry revenues that have historically funded education in the state.

“We know that for the last 12 to 15 years we’ve been incredibly heavily reliant on the mineral industry,” he pointed out. “But as the landscape changes, as the mineral economy is changing, the state is probably in need of reviewing its revenue sources. Our traditional revenue sources are not what they used to be; our expenditures maintain, and they do grow because of inflation.”

But the bill doesn’t just propose an increase in taxes. 

“It involves cuts,” he said. “Looking at where might we be able to make reductions that would have the least impact to classrooms and school districts.”

But he said, make no mistake about it, cuts mean job losses.

“When 85% of (a school’s) budget is tied up in people, there really just is nowhere to keep that entirely away from impacting people,” Farmer said. “If you have cuts that are in the neighborhood of 10%, you will be seeing job losses within school districts.”

Farmer pointed out that in every community, school districts are among the top three employers – and if teachers lose their jobs, they are likely to move out of those communities rather than find a job in another field. That means fewer dollars circulating in Wyoming communities.

He added that revenue transfers are also addressed in the bill – diverting some income for the state’s savings accounts to current education needs.

Farmer explained that if imposed, the sales tax could generate around $80 million each biennium. 

“So, that new revenue, combined with some cuts, combined with some revenue transfers, really goes a long way to plugging that $300 million hole,” he said.

He added he is hopeful that Wyoming’s historic high regard for education will sway legislators to support additional funding for schools.

“From the beginning of our territorial days, Gov. Campbell, the very first Governor of Wyoming, called education ‘the cornerstone of the new state,’” he said. “So from the very beginning, we’ve gone forward and built an education system that’s an envy of the nation.”

“And if we lose that, we threaten the quality of education, we threaten the very economy of Wyoming,” he added.

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Legislator Says Wyoming Should Sell State Jets, WYDOT Pushes Back

in News/Taxes/Legislature
Wyoming’s jets cost state $1 million in 2018

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By Ellen Fike, Cowboy State Daily

Sen. Anthony Bouchard, R-Cheyenne, says Wyoming sell its two jets used for transporting state employees, but some officials have pushed back against this idea.

“The State of Wyoming should list its TWO Luxury jets on EBAY instead of raising taxes and pushing toll road,” Bouchard wrote on his Facebook account that also featured a photo of the planes.

However, multiple Wyoming Department of Transportation studies have concluded the planes actually save the state money instead of being more costly.

State aeronautics division administrator Brian Olsen told Cowboy State Daily that although his department doesn’t have an official stance on the jets, the staff finds they are an efficient and effective tool in conducting state business.

“In 2014, a third party conducted an operational study report. That report indicated that the … total cost to operate the two aircraft was $2,645,995 average per year,” Olsen said. “We estimate the current operating costs to be on average between $2 and $2.1 million per year.”

The state owns the aircraft outright, so the only costs are for operations and maintenance.

“WYDOT pays the fixed costs (training/payroll/hangar/etc.) because we own and operate the aircraft and we would be responsible for those costs regardless of usage,” Olsen said. “When an agency uses the aircraft, we charge $1,425 per hour, that rate covers variable (consumable) costs.”

The study Olsen referenced also found the state’s transport aircraft were 14% more efficient per mile than auto/airline travel (based on a $100,000 salary). However, the study didn’t account for lost productivity or travel expenses associated with travel by car, which would also make the aircraft more efficient, he said.

The report also concluded the state’s aircraft were 32% more efficient than fractional aircraft (one that has multiple owners) and 44% more efficient than chartering a similar aircraft.

Gov. Mark Gordon’s spokesman Michael Pearlman pointed Cowboy State Daily to a comment the governor made to the outlet back in 2019, as he holds a similar stance today.

“Governor Gordon supports fiscal responsibility and the judicious use of taxpayer dollars,” Pearlman said at the time. “Several WYDOT studies have determined that owning state aircraft is more cost-efficient than private charters or driving vast distances.”

Pearlman added at the time Gordon advanced a budget proposal including more than $500 million in strategic cuts.

“Selling the state’s aircraft would do little to address the state’s budget shortfall,” Pearlman said.

Rep. Chuck Gray, R-Casper, told Cowboy State Daily on Friday he introduced an amendment earlier this week requiring WYDOT to sell the jets, but it failed.

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Wyoming Ranked No. 1 For Business Tax Climate

in News/Taxes

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By Jim Angell, Cowboy State Daily

For the seventh consecutive year, Wyoming has been ranked the top state in the nation by a tax policy group for its business tax climate.

However, a member of the Legislature’s Revenue Committee said he is not sure the high ranking translates into new business for the state.

“It obviously is great to get an A-plus on a paper, but it doesn’t necessarily mean you’re the smartest person around,” said Sen. Ogden Driskill, R-Devils Tower. “It doesn’t equate to anybody coming here.”

The rankings by the Tax Foundation is based on the taxes in place in various states. The highest ranking states had fewer of what the group called “major taxes,” such as corporate income taxes, individual income taxes and sales taxes.

Wyoming fared well because it has no income tax, a well structured sales tax and modest excise taxes, which the Foundation said would make the state more attractive for economic development.

“Taxation is inevitable, but the specifics of a state’s tax structure matter greatly,” Jared Walczak, vice president of state projects for the Tax Foundation, said in a news release. “States with more competitive tax systems score well in the index, because they are best suited to generate economic growth.”

Wyoming ranked first in the nation in the area of personal and corporate income taxes because it has none.

For sales taxes, the state ranked sixth overall, while it was ranked 39th for property taxes.

Neighboring states also did well in the overall rankings, with South Dakota placing second, Montana placing fifth and Utah placing eighth.

New Jersey, with some of the country’s highest property taxes and second-highest corporate and individual income tax rates in the country, placed last.

However, Driskill noted that since Wyoming first topped the Tax Foundation’s rankings, the state’s tax structure has not helped the state lure new business as much as it should have.

“We might ace the test, but we’re not really passing,” he said. “The states with the best business climates are the ones attracting business. And that’s sure not Wyoming. We’re not even competing against our surrounding states.”

The state needs to take a hard look at itself to determine what changes are needed to bring in businesses, Driskill added.

“We might have what looks good on paper, but in fact, when you get here, you find we’re a much more regulatory state than it might look like we are,” he said. “We need to reassess what we are doing.”

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Where’s Your $1,200 Stimulus Check? Here’s How to Track It.

in News/Taxes

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Looking for your stimulus check? Most Americans who qualify will receive it by the end of the week.

The good news according to David Pope, the CEO of Wyoming-based accounting firm DAPCPA, is that if the IRS has your bank information, is it will be deposited directly into your bank.

The IRS announced a new tool to track your stimulus payment. If you filed a 2018 or 2019 tax return but didn’t include your direct deposit information, you can do that here as well.

What if you haven’t provided the IRS with your bank information? Be prepared to wait.

“If you have not provided the IRS with your bank account information on previous tax returns, your payment will be delayed by a matter of weeks or possibly months,” Pope said.

“If you did not file at all in 2018 or 2019, there will also be a delay. In the case of those who have not filed, the IRS will attempt to send checks to folks that received Social Security or some other form of government payment,” he said.

Who will receive a check?

U.S. residents will receive the Economic Impact Payment of $1,200 for individual or head of household filers, and $2,400 for married filing jointly (plus up to $500 for each qualifying child) if they are not a dependent of another taxpayer and have a work eligible Social Security number with adjusted gross income up to:

$75,000 for individuals
$112,500 for head of household filers and
$150,000 for married couples filing joint returns

Taxpayers will receive a reduced payment if their Adjusted Gross Income is between:

$75,000 and $99,000 if their filing status was single or married filing separately
112,500 and $136,500 for head of household
$150,000 and $198,000 if their filing status was married filing jointly
The amount of the reduced payment will be based upon the taxpayers specific adjusted gross income.

How to Spend it?

While spending the check is entirely up to you, Pope does not recommend buying $1,200 worth of Ho-Hos and Schlitz Malt Liquor.

“The program was meant to help people pay their bills during this terrible economic disaster,” he said. “In the Great Recession of 2008-2013, there were record numbers of foreclosures and defaults on loans. This is intended to help lower those numbers and help people to get by until the reopening of the economy.”

More Money to Come?

What if you accidentally did spend the entire check on booze and donuts? Will the government be sending another check?

Don’t count on it, Pope said. But you never know.

“Congress is already discussing a 4th stimulus package. This should provide more funds to businesses and a large infrastructure allocation. It may also include additional money to individuals. There have even been suggestions floated that include some sort of monthly payout to taxpayers, but nothing specific yet,” he said.

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Bob Geha: Taxpayer Bill of Rights Legislation Introduced

in News/Taxes/politics
Bob Geha

By Bob Geha, Cowboy State Daily

The state’s voters would have to approve tax increases and higher debt levels under a measure introduced in Wyoming’s House.

House Joint Resolution 2 proposes an amendment to the state’s Constitution that would require voters to approve tax increases by any governmental entity in the state.

The measure, referred to as the “Taxpayer’s Bill of Rights,” was proposed by state Rep. Chuck Gray, R-Casper.

“This tax increase narrative keeps coming back, it’s the wrong move for our state,” he said. “The other thing this bill does is to put a cap on state expenditures … so that we stop these boom and bust cycles in terms of expenditures. We save more during the boom so we have more in savings during the bust and that means we don’t need the tax increases.”

Gray said if the amendment had been in place years ago, Wyoming would have more than twice in savings what it does now.

To be considered during the budget session, the bill must win the support of 40 representatives. If the bill is approved, a constitutional amendment would be submitted to voters during the general election in November.

Lodging Tax: $21.5 Million Raised Statewide in 2019

in News/Taxes/Tourism
Lodging tax

By Wendy Corr, Cowboy State Daily

Because of the importance of tourism to local economies throughout the state, many counties are making the most of an optional tax that allows them to lure visitors, bringing much-needed tourism dollars to sluggish economies.

According to the Wyoming Travel Industry Coalition, the local option lodging tax works well as a source of revenue for local tourism promotion. 

A report released by the state shows that more than $21.5 million dollars was raised by lodging taxes statewide in 2019. 

Income from the lodging tax, which is assessed in addition to sales taxes, is earmarked for local travel promotion. The tax, which ranges from 2 percent to 4 percent, must be approved by local voters every four years. 

None of the lodging tax revenues can be used for projects outside of tourism advertising and promotion — no capital construction, no general funding for cities, towns and counties. 

But for many local governments, that tax income is a jump-start for the economy.

Claudia Wade, executive director for the Park County Travel Council, said that because of the lodging tax, the council can spend more dollars advertising attractions and recreation, which influences travelers’ decisions to stay longer in the area.

Because of its location, Park County is a natural draw for tourists heading to Yellowstone National Park. 

Wade said that because of the advertising financed with lodging tax revenue, more people are drawn to the region as tourists, which then allows more locals to stay employed.

“Because the lodging tax is collected on top of the sales tax, when visitors come to the area, they bring in more revenue that can be used for general fund purposes for local governments,” Wade said.

“Those expenditures have a big impact on our economics. The businesses that they’re frequenting also are hiring employees — which means those front line workers and workers behind the scenes all benefit from the tourism industry and visitors coming to the area.”

What the lodging tax does in Park County is indicative of its impact across the rest of the state. Laramie County received more than $2 million in lodging tax revenue last year, while Casper and the local governments in Natrona County received $1.8 million.

Park County, with Yellowstone as a major tourism draw, took in more than $3 million, and Teton County received more than $7.7 million in lodging tax dollars.

Wyoming law specifies that the tax must be used for travel and tourism promotion by the county or city approving the tax, and is limited to promotional materials, television and radio advertising, printed advertising, promotion of tours and other specific tourism related objectives. 

Wade pointed out that Park County does what most other counties do with the funds.

“We pay for connect TV ads, some print, there is some digital, and a lot of social media,” she explained, “so it’s a big mix – much bigger than when it was when we initially started in 1986.” 

Brook Kaufman is CEO of Visit Casper. She said the lodging tax makes a huge difference in the local economy in Natrona County.

“I think there is a perception that Natrona County doesn’t have a robust tourism economy, but we do,” she said. “It employs just over 2,600 people, generates almost $300 million in direct spend and $15 million in sales tax. For us, tourism is really critical to employment.”

Kaufman said Visit Casper invests the lodging tax dollars in marketing programs that drive return visits, which creates jobs and sales tax collections for both cities and counties. 

A statewide lodging tax bill is being proposed again this year at the Wyoming legislature, which Wade said would assist not only the individual counties, but the entire state.

“The lodging tax is important as a whole to the state — that additional money could be very beneficial to the Wyoming Office of Tourism, which has a broader reach than our local organizations,” Wade explained.

The Wyoming Travel Industry Coalition reports that the lodging tax makes up about 18 percent of the tax dollars from travelers. While a study by the American Economics group in 2008 concluded high room taxes can influence travelers’ decisions to stay in a certain city for any length of time, Wade said that’s not much of a concern in Wyoming.

“Our lodging tax rate here in Wyoming is fairly insignificant compared to other regions,” she said, noting that states such as Michigan (at 12 percent) and Connecticut (at 15 percent) have significantly higher lodging taxes than in the Cowboy State. 

Only five states have lodging tax rates lower than Wyoming, according to a report issued by the National Council of State Legislatures.

Legislators on dwindling state revenues: ‘It’s real, it’s bad’

in Energy/News/Taxes
Silhouette of a Pump Jack

By Ike Fredregill, Cowboy State Daily

As coal, oil and natural gas revenues decline, state legislators could have some hard decisions ahead, according to information generated by a strategic planning effort created by Gov. Mark Gordon. 

Dubbed “Power Wyoming,” the planning effort forecasts several scenarios for mineral-based state revenue streams during the next five years, all of which predict a deficit in coming years. 

The information compiled by Power Wyoming was presented to the Wyoming Legislature’s Joint Revenue Committee on Nov. 11. 

“The best projections in this model are very unlikely, and the worst are the most likely,” said Sen. Cale Case, R-Lander, the Senate committee’s chair. “That’s very scary.”

Case worked on Power Wyoming with Rep. Dan Zwonitzer, R-Cheyenne, chairman of the House Revenue Committee. Also on the team were members of the executive branch and economists familiar with the state’s energy sector such as Rob Godby, the University of Wyoming director for Energy Economics and Public Policies Center and a College of Business associate professor. 

Zwonitzer said the planning effort is the starting point to prepare for diminishing mineral revenues. 

“Power Wyoming is just the first step of saying, ‘Here’s what’s going to happen to Wyoming,’” he said. “The group was formed to get the message out there: ’It’s real, and it’s bad.’”

Renny MacKay, Gordon’s policy adviser, said Power Wyoming was not established to be a group of individuals working on potential solutions to the state’s revenue problems, but rather a group of experts working to gather to analyze data.

“This is a cone of different scenarios for both revenue and energy production,” MacKay said.

In its current iteration, Power Wyoming provides insight by compiling information from the state’s Consensus Revenue Estimating Group and the U.S. Energy Information Administration, among others.   

“Energy production is declining … and if there is production decline, the traditional jobs we have in Wyoming would be impacted,” MacKay said. “Information gives us power. The more we look at it, the more we talk about it, we can figure out what our opportunities are as a state.”

Worst case scenarios

While the coal industry’s struggles are being felt across the state, Case said Power Wyoming illuminated potential problems with the natural gas sector as well.

“I did not realize the issues with natural gas were as serious as they are,” he said. “Everybody else is thinking natural gas is doing great, and it’s not.”

The planning effort’s initial simulation results highlight some scenarios where the state’s total mineral revenue drops by 10 percent as early as 2020-2022 before a potential partial recovery by 2024. Some scenarios show a full recovery to expansion in revenues, but Power Wyoming reports they are the least likely cases within the current market conditions and expectations.

Most scenarios predicted a decrease in both Wyoming’s total employment and population, but in the worst case scenarios, the state’s total employment could decrease by about 20,000 jobs by 2024, followed by a similar decrease in population.

“In the next five years, there’s no way to absorb those (lost) jobs,” Zwonitzer said. “That means we’ll either have to have an increase in taxes, or a decrease in government services.”

In the worst case scenarios, he said the state would most likely need to pursue both. 

“We’ve lived a certain way in this state for 100 years with minerals paying the taxes,” Zwonitzer said. “That major revenue source is going away. So what does that look like for our future, and what do we want to do about it?”

Unreliable oil

Some of the scenarios, including those in the best case category, relied heavily on increased oil production balancing decreased coal and natural gas production. But Case warned against putting faith in the oil market.

“I think oil is very susceptible to environmental and carbon risk,” he said. “Changes in policy from Washington, D.C., and from other states could make it impossible to grow petroleum.”

A low-carbon policy consideration was also provided for the Revenue Committee as part of the Power Wyoming data package. Case said the presentation offered a more realistic outlook of oil than the initial simulation results put together by Godby.

In the policy consideration, Shell Global estimates a high usage of liquid hydrocarbon fuels, such as gasoline, in 2020 by about 25 million barrels a day. After the peak, however, the oil company predicts a gradual decrease down to 10 million barrels a day in 2060 and about 2 million barrels in 2100 as part of its strategy to comply with the Paris Climate Accord.

Most scenarios presented by Power Wyoming indicate the mineral sector is going to take a significant hit in the next five years, but even if the best case scenarios come true, Case said the future of energy is moving away from Wyoming’s traditional mineral offerings.

“This will tell you that the bad times are here,” Case said. “This is not just a tool for the Revenue Committee, but it’s also a tool for us. If you’re an employee in the coal industry, it’s probably time for you to get your own house in order.”

MacKay said Gordon is already working on the next steps of the planning effort. 

“We are bringing folks from the private industry now,” he explained. “Power Wyoming will definitely stick around for the foreseeable future.”

Legislative committee approves Medicaid expansion plan

in News/Health care/Taxes

CHEYENNE — A plan to expand Medicaid coverage to about 19,000 Wyoming residents won approval from a legislative committee on Tuesday.

The Legislature’s Revenue Committee voted 8-5 to send to the full Legislature a bill that would expand Medicaid coverage at a cost of about $154 million for two years. Federal funds would cover about $136 million of the cost, with the state picking up the remaining $18 million.

Supporters argued that given declines in the state’s mineral industry, residents will need the extra assistance provided by expanded Medicaid coverage.

“I think the coal bankruptcies up in the northeast have made people sit back and think a little bit differently about our economy,” said committee member Rep. Cathy Connolly, D-Laramie. “We know that people are going to lose their jobs. We know it. Every bit of information points to it.”

Marcie Kindred, a Cheyenne Democrat who plans to run for the state House of Representatives, said the state owes it to its residents to provide assistance.

“I’m really lucky that I have a network of support of people to help me get out of that cycle of poverty,” said Kincaid, a mother of four who has relied on Medicaid coverage. “But what about the people that don’t have that network of support, that don’t have that health (coverage)? We, as citizens of Wyoming, have to care for our own. We have to be that support and turn back and pull them out.”

Opponents of the measure argued that the state will have to pick up a larger share of the expense should the federal government reduce its level of support.

“The federal government does not have the money for this,” said Karl Allred, a former state representative from Evanston. “Eventually, that’s going to go away. And once you’re into it, you can’t get out really effectively. Are you going to tell people all of a sudden now that you’ve been giving them health care and now you’re going to take it away?”

Bob Wharff, a lobbyist from Evanston, agreed.

“If we become dependent and reliant upon the government to fulfill that and it falls apart, there’s no other safety net there,” he said.

The measure will be forwarded to the full Legislature for its consideration during its upcoming budget session in 2020.

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