CHEYENNE, Wyo. — If the sentiment on the Legislature’s Joint Revenue Committee is any indicator, there’s little appetite among Wyoming lawmakers to raise taxes to bolster the state’s sagging revenues after new projections of a revived oil industry in the state.
The committee on Wednesday rejected five proposals that would increase state taxes, including the state sales tax to fund K-12 school construction and maintenance.
“I see $300, $350 million a year of revenue that wasn’t there 11 months ago, so it would be a hard stretch to add a major tax,” Rep. Mike Madden, co-chairman of the committee and a Republican from Buffalo, said.
Wyoming coffers have been depleted in the last few years by a downturn in the state’s mineral extraction industry, which provides much of the state’s tax base to pay for government services and schools. Thousands of jobs in the coal, oil and natural gas industry were lost.
But the recent increase in oil prices has resulted in increased drilling and companies hiring back oil field workers.
State House Speaker Steve Harshman, a Republican from Casper, said the new revenue projections give the Legislature, which convenes Feb. 12 for a 20-day budget session, a “few more years” to address its finances.
Before the revival in the oil industry, though, the Joint Revenue Committee was assigned the task early last year of identifying ways for the state to bring in new revenue so it wasn’t so reliant on the volatile minerals extraction industry. The panel earlier approved sponsoring legislation that included increasing the state cigarette tax by a $1 per pack, raising about $22 million in new revenue in 2019.
But with the increased revenue projections from oil in the last couple of months, additional tax measures found little support from the committee on Wednesday.
After a proposed bill to impose a 1 percent tax on purchases at leisure and hospitality establishments around the state failed on a 6-6 vote, the committee declined to consider the four other proposals.
They’re decision came after being told that the state still faced a revenue deficit of about $450 million a year because, unlike oil, the revenue from coal and natural gas taxes are projected to continue declining in the coming years.
Sen. Ray Peterson, a Republican from Cowley and co-chairman of the revenue panel, said “we’re not out of the woods yet,” noting the state will be spending down its savings in order to balance its next two-year budget.
Rep. Cathy Connolly, a Democrat from Laramie and a member of the committee, said lawmakers were kicking the can down the road by refusing to consider new taxes.
“We are not thinking to the future,” Connolly said.
Connolly said she was drafting a comprehensive tax reform measure that includes imposing a personal income tax and raising state taxes on mining although she expects there will be little support for it from her colleagues.
“A couple of minutes of introduction will have people, hopefully, start scratching their heads and not being surprised that’s a road that we could and probably should be going down,” she said.
Rep. Timothy Hallinan, who voted against the leisure and hospitality tax, said he’s aware of the revenue deficit but higher taxes are not the way to address it.
Hallinan, a Republican from Gillette, said he is drafting a constitutional amendment to tap $100 million in state land mineral royalties for K-12 schools. Voters would eventually have to approve the amendment if it passes the Legislature.