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Representative Dan Zwonitzer

Zwonitzer Calls Complaint About Residency A ‘Political Hit Job’

in News/politics
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By Ellen Fike, Cowboy State Daily

Rep. Dan Zwonitzer, R-Cheyenne, said he was blindsided over the weekend when he discovered his residency was a topic of discussion during the Wyoming Republican Party’s central committee meeting.

The Wyoming House Speaker Eric Barlow R-Gillette said Friday he has started to collect information as part of an investigation into Zwonitzer’s residency requested by the Wyoming Republican Party’s central committee.

In an interview with Cowboy State Daily on Friday, Zwonitzer called the accusations that he does not live in House District 43, which he has represented for 18 years, “ludicrous,” adding the state GOP’s call for an investigation into his residency a “political hit job.”

“Why would my own party attack me without giving me the benefit of a simple phone call or email?” Zwonitzer said.

He noted that the residency complaint came up as an “emergency issue” during the central committee meeting, and no one alerted him ahead of time about it.

The party’s central committee agreed Saturday to ask the secretary of state’s office to look into whether Zwonitzer has moved out of House District 43.

The decision was made in response to a concern raised by Joey Correnti IV, chairman of the Carbon County Republican Party, who said he wanted to see if the central committee thought the issue merited further review. Correnti said he was approached by others who made him aware of the problem and, after research to collect some documents, he took the matter directly to the central committee.

Zwonitzer said he was surprised to learn that questions about his residency in HD43 had been circulating for several weeks among Republican officials, while he had heard nothing about the issue.

He also questioned who gave the information to Correnti.

On Thursday, Secretary of State Ed Buchanan referred the complaint to the Wyoming House of Representatives. Zwonitzer has been asked to write an affidavit and collect information to send to House and Legislative Service Office officials, which he will likely have completed by next week.

“I don’t have any concerns [about the review],” he said. “I think I’ll be vindicated. I fully trust the legislative process to do what it does.”

On Friday, Barlow detailed the information he is collecting as he looks into the matter.

“I am conferring with House Leadership and LSO legal staff on the manner in which to proceed under the Wyoming Constitution and the Rules of the House of Representatives,” Barlow said. “Additionally, I have requested Representative Zwonitzer respond to the allegations in writing. Once I have received his response and understand the options available for resolving this matter in an appropriate and expeditious manner, I will propose a course of action.”

Zwonitzer believes the complaint is just a distraction from other political issues, such as the appointment of the new superintendent of public instruction, redistricting and the work that will need to be done when the Legislature convenes next month.

Redistricting is the process of redrawing House and Senate district boundaries to conform with new census figures.

Zwonitzer is the co-chair of the Legislature’s Joint Corporations, Elections and Political Subdivisions Committee, which is responsible for developing redistricting plans with an eye toward keeping population numbers within different districts as close to equal as possible.

As part of his presentation to the GOP central committee, Correnti said he was concerned that some of the redistricting plans proposed by Zwonitzer appeared to change the boundaries of HD43 to include the part of HD10 where Zwonitzer bought a residence with his spouse.

Zwonitzer said it is no secret that he bought a property near Carpenter, in HD10, where his spouse lives and is registered to vote. But Zwonitzer and his youngest child are living in HD43.

He added he has done his best to keep his personal feelings separate from his work on the redistricting maps.

As of now, he has no plans to move into HD10, but he did not rule the idea out in the future.

“I’m only 42, so never say never,” he said.

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Wyo Legislator: Wyoming Legislative Special Session Will Start July 12

in News/Legislature
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By Ellen Fike, Cowboy State Daily

A state representative told a Cheyenne radio station over the weekend that the Wyoming Legislature’s special session will likely take place in mid-July.

Rep. Dan Zwonitzer, R-Cheyenne, spoke with KGAB over the weekend and told host Doug Randall that he expected the latest legislative special session to convene July 12 and run for one week. Zwonitzer said all of the state’s legislators have been contacted and told to block out that particular week.

The Legislature is to use the session to discuss the appropriation and distribution of federal coronavirus relief funds.

“It’s about $1.3 billion coming in for municipalities, education, rental assistance, all types of things,” Zwonitzer said during his interview.

Legislative Service Office spokesman Ryan Frost could not confirm the dates of the ses to Cowboy State Daily on Monday, but said the week was being eyed as a possibility for the special session.

Last month, Gov. Mark Gordon announced a program for rental assistance in the state that would use $200 million in federal funding to cover rent and utility costs for Wyomingites struggling financially due to the impacts of the coronavirus pandemic.

His office also announced last month that the state was expected to receive around $1.2 billion in federal funding, close to Zwonitzer’s own estimate for the special session.

Gordon wanted to identify needs and opportunities that could be addressed with the COVID funds, as well as develop a budget to optimize the distribution.

“Wyoming will survive the impacts of COVID, drive through our period of recovery and set up the conditions for us to thrive in the long-term,” he said. “It is imperative to emphasize long-term benefits because this funding has increased the debt for future generations.”

He stressed collaboration between the Legislature and the executive branch will be required to maximize the benefits of these resources for the people of Wyoming.

“I am committed to working with the Legislature to ensure that we use the funds effectively and responsibly, and that we seek to develop big ideas that will have significant and long-lasting impacts” Gordon said. “Wyoming won’t see these funds for some time, allowing us to develop a plan to ensure these dollars benefit citizens for years to come.”

The American Rescue Plan included $350 billion in aid to states and local governments.

Guidance from the federal government on the use of the funds is expected to be issued sometime this month, but unlike the federal CARES Act funding distributed last year, Wyoming will have nearly four years to spend the money.

The governor wants to focus on three areas in identifying the most significant problems Wyoming is facing due to this pandemic and then use the federal money to address the highest priorities within those areas. The areas are:

  • Health and Social Services
  • Education and Workforce
  • Economic Diversity and Economic Development

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

in Energy/News/Taxes
Silhouette of a Pump Jack
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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.”

Zwonitzer: Time for Legislature to study gas tax increase

in News/Transportation/Taxes
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It is time for the state to study a possible increase in gasoline taxes, according to the co-chairman of the Legislature’s Revenue Committee.

Rep. Dan Zwonitzer, R-Cheyenne, said the proposed 3-cent per gallon tax increase approved by the Revenue Committee in July should definitely be reviewed by the Legislature when it meets in 2020.

“The last actual tax that the Legislature has increased, the only tax in my 15 years, has been the gas tax,” he said. “And it’s probably time again.”

The 3-cent increase would boost Wyoming’s total tax on gasoline to 27 cents per gallon and raise an additional $20 million per year. Under the proposal forwarded to the Legislature by the Revenue Committee, $13.5 million of that would go to the state Department of Transportation to build and maintain roads, while $6.5 million would be split between city and county governments.

Zwonitzer said the increase, which would leave Wyoming’s total gas taxes among the lowest in the region, would help offset some of the Department of Transportation’s deferred maintenance costs.

“But with hundreds of millions of dollars in deferred maintenance needed, the 3 cents is really just kind of a chip in the bucket,” he said.

The state last increased gasoline taxes in 2014, adding 10 cents to the price of a gallon of gasoline.

Cassie Craven, of the Wyoming Liberty Group, said she wondered what the money raised by the last increase had been used for.

“I’m wondering where that money went,” he said. “We heard back then we wouldn’t feel it at the pumps and gas prices don’t seem to indicate that. So where did the money go?”

The Wyoming Taxpayers Association, Wyoming Truckers Association and Petroleum Marketers Association have all said their members would support the increase as long as the extra tax is not tied to inflation.

The Wyoming Farm Bureau is on record as opposing the tax because of the expenses it would add to farming operations.

Revenues ahead of estimates, though structural problems remain

in Government spending/News/Taxes
Wyoming taxes
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By Laura Hancock, Cowboy State Daily

Sales taxes, investment income, oil severance taxes and federal mineral royalties are proving to be the saving grace for state coffers, according to a recent report, but the overall revenue picture for Wyoming remains bleak.

In the first six months of the year, production of natural gas and coal – as well as prices for coal – came in below the state’s official forecast, according to the Census Revenue Estimating Group, made up of revenue experts from the legislative and executive branches of Wyoming government. 

CREG recently released a six-month revenue update for Wyoming, and compared those revenues against its previous official state forecast, released in January. 

At one time, coal and natural gas were counter-cyclical – when one was down, the other was up – which helped Wyoming absorb the booms and busts of a natural resource economy, and money continued to flow to keep state government running. 

But the July 31 CREG update underscored a new reality: Production of both commodities was down, and the income for two accounts that fund most day-to-day operations in state government would have also missed estimates had it not been for other forms of revenue. 

Revenue receipts to the General Fund, which is something of a state checking account, were $201 million or 16.9 percent ahead of earlier forecasts for the year due to higher-than-anticipated sales tax, investment and oil severance tax income.  

Receipts to the Budget Reserve Fund, which is akin to a state overdraft account, were 6.7 percent ahead of projections, thanks to severance taxes and federal mineral royalties. State Rep. Dan Zwonitzer, R-Cheyenne, said that Wyoming can’t always count on high returns on investments. 

“Future projections for investment returns are nowhere near where they’ve been the last four years,” he said. “They’re looking at 5.5 percent, 5.25 percent (rate of return) for the retirement system. We have some serious problems ahead of us.”

Zwonitzer is a co-chair of the Legislature’s Joint Revenue Committee, which is studying whether to implement new taxes, such as a corporate income tax or a gross receipts tax. 

The difference between the two? A corporate income tax is assessed on business profits, or income. Gross receipts taxes are levied on sales. 

Companies don’t pay corporate income taxes if their profits are zero or negative. But that’s not true with gross receipts taxes, according to the conservative Tax Foundation.

Forty-four states have a corporate income tax and four have a gross receipts tax, Zwonitzer said. 

Other taxes under consideration: 

  • A higher assessment against wind power generation
  • An increase of the statewide mill levy for schools
  • Increases for some property taxes
  • Adding a fourth category of property taxes – currently there are residential, commercial and industrial – which would consider multi-million dollar residential homes. “That would require a constitutional amendment,” Zwonitzer said. 

However, tax talk is tough in the Cowboy State, where people are conservative and used to one of the nation’s lowest tax rates. Previous tax proposals – such as requiring taxes be assessed on services including haircuts, real estate transactions and legal services – went nowhere. 

“Some in the Republican caucus say we need to be cutting services more before raising taxes,” Zwonitzer said. “They can’t identify where those cuts are” outside of education. 

Revenue bills must first be introduced in the House, where Zwonitzer said many proposals will likely gain the two-thirds vote necessary to clear introduction and be referred to a committee on budget years, such as the 2020 session. 

“I think we’re going to have some good discussions,” he said. 

Wyoming Legislature’s tax panel draws a crowd

in News/Taxes
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Wyoming’s legislators are examining several proposed new taxes and changes to existing taxes as the state’s coal industry continues its decline.

Members of the Revenue Committee, meeting in Cheyenne on Monday, reviewed several proposals that have been rejected by the Legislature in the past, including changes to the state’s wind energy tax, an increase in fuel taxes and a tax on large national retail stores.

Dan Zwonitzer, R-Cheyenne, the committee’s co-chair, said it is important that the committee study all options available to it to keep the state’s revenue stream stable, even if those options are unpopular.

“We’re going to be bringing something (to the Legislature’s 2020 session) and people probably won’t like it,” he said. “People don’t like taxes.”

The recent closure of two major Wyoming coal mines owned by Blackjewel indicates that it is time for the state to plan for different levels of coal production and how that will affect the state’s revenues in the future, said Buck McVeigh, acting chief of staff for Gov. Mark Gordon.

“The strife that’s facing our coal industry and that steady revenue player that we always counted on during the tough times with oil and gas, we’re losing that,” he said.

One proposal being considered is a corporate income tax that would be assessed against large retail stores with headquarters outside the state. Dubbed the National Retail Fairness Act, the tax is designed to account for the fact that the cost of goods sold by such retailers often includes an element for corporate income taxes assessed in other states. Backers maintain the measure would let Wyoming collect its fair share of the taxes paid by its residents.

The proposal was rejected by Wyoming’s Legislature during its recent general session and Senate Vice President Ogden Driskill, R-Devils Tower, said he is not sure any more support exists for the measure going forward.

“Some things just don’t know when to die and they get revisited and revisited,” he said. “That came out of left field pretty fast last year. I don’t think there was good understanding on either side of it.”

The measure has the support of the Wyoming Education Association because of the $40 million to $45 million it could raise annually.

“The National Retail Fairness Act is one step in the right direction to increase funding for schools,” said Tammy Johnson, the WEA’s government relations director.

The Revenue Committee continued its meeting Tuesday.

Tobacco tax dies in House committee

in News/Taxes
Extinguished cigarette on a table toble next to ashtray, ALT=Tobacco tax
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A measure that would have boosted taxes on cigarettes and other tobacco products was killed in a House committee on Monday.

The House Revenue Committee voted 5-4 to keep HB 218 from reaching the House floor The bill would have increased cigarette taxes by $1 per pack, from 60 cents to $1.60.

The measure was one of a number of bills introduced this session aimed at raising tax revenues. 

Rep. Dan Zwonitzer, R-Cheyenne, chairman of the House Revenue Committee, said the bills represent ways legislators are looking at avoiding a state budget deficit moving forward.

“Three years ago after the financial crisis hit Wyoming, we were still in crisis mode, tryng to see how far down we were going to go,” he said. “Now that we’ve stabilized, it’s time to say ‘How are we going to fix this decrease.’ We’re $350 million still in deficit and so that’s why you’re seeing a lot of tax bills this session. It’s to say long-term moving forward, how do we make sure we have a balanced budget?”

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