Lawmakers are fighting for property tax breaks…

Wyoming voters will decide a controversial constitutional amendment on next week’s ballot – a reform of the state’s property tax structure that has been more than a year in the making.

Senate Joint Resolution 3, which passed into law without much opposition or controversy in 2023, placed a constitutional amendment on the Nov. 5 ballot that, if passed, would create a separate fourth class of residential property taxation in Wyoming. Amendment A would create a subclass of principal residence that could be assessed and taxed at a different rate than other property in the state.

The amendment was touted as an opportunity to provide property tax relief, but many of its opponents expressed concern that the tax rate could also be raised at some point in the future.

The Wyoming Constitution requires that properties be assessed at full value on a flat basis, but the amendment would allow residential properties to be taxed at just 7.5%. Now commercial real estate, real estate and residential real estate are taxed at a rate of 9.5%, and industrial at a rate of 11.5%.

Any of these changes will occur as a result of future legislative action if the amendment is enacted.

Amazing supporter

State Sen. Anthony Bouchard, R-Cheyenne, supports the amendment and believes opponents are doing it to create chaos rather than offer effective solutions.

Bouchard specifically criticized Sens. Cheri Steinmetz, R-Lingle, and Larry Hicks, R-Beggs, and Rep. John Bear, R-Gillette, on Facebook for their opposition to the amendment.

In response, some people called Bouchard a “tax spender,” even though Bouchard was one of the most conservative lawmakers in the state during his seven years in office.

Although Steinmetz and Hicks did not, Bear voted to support the final version of the amendment in 2023, which Bouchard said was proof that Bear was “literally unaware” of what he was voting for.

“When you see guys like John Bear, who voted for this amendment and now votes against it … it’s chaos,” Bouchard said. “What? He wasn’t smart enough then, but now?

Bear told Cowboy State Daily that he wasn’t a big fan of the constitutional amendment at the time, but voted for it late in the 2023 legislative session because nearly all of the more than 20 other property tax relief bills proposed in the this session were approved. already died.

He tried to include tax restrictions in a constitutional amendment, but it was rejected.

“This was our last chance in 2023 for Wyoming residents to get a tax break,” Bear said.

He also said Bouchard’s position on the amendment was revealing.

“Any time Anthony Bouchard falls into the same category as the Wyoming Democratic Party, you know he’s probably wearing the wrong pants,” Bear said.

Bouchard wants the Legislature to be able to permanently tax low-income seniors and veterans at a lower rate than other homeowners.

“If we can’t change this core residential property differently, if we’re going to stick to the principle that everyone should be treated the same and we’re just going to screw everyone over, we’re not doing our job,” he said. “How do we protect these owners if we don’t divide this field?”

He also says it’s implausible to think lawmakers could ever raise the property tax rate, given Wyoming’s political structure.

“Who wants that on their political tombstone?” – he asked.

The August primary shifted the Wyoming House of Representatives to the right politically, with the Wyoming Freedom Caucus gaining more than 10 seats.

Bear agrees that concerns about rising property taxes are a “false flag” but believes the bigger problem is overall government spending.

He said he won’t be confident in lowering property tax rates until state spending stabilizes or declines in Wyoming, which could theoretically lead to a surplus in tax revenue that could lead to future cuts.

constitutionality

Former state legislator Jane Mockler, now a member of the Wyoming Board of Equalization, doesn’t believe in property tax relief bills such as the 4% cap on annual property tax increases for residential properties passed in the last legislative session. are constitutional.

Mockler said the bill would result in residential properties being assessed at different rates throughout Wyoming depending on the tax breaks they provide.

The Wyoming Constitution states that all residential property is subject to a single assessment and provides only a very limited range of exceptions. It also prohibits the creation of new classes and subclasses.

The 4% rate bill contains a clause that the cap would be reset whenever a new owner takes possession of the property or if its area is changed.

Mockler argues that people living in an area where the tax increase was less than 4% would be disproportionately taxed compared to those whose taxes were above 4%, a situation most likely to occur among homeowners from very wealthy backgrounds. Jackson and the more modest Lusk, or even among the neighbors if you’re a new homeowner.

“Disrupting the value and uniformity of our tax system has long-term consequences,” she said. “I don’t think a house cares who lives in it.”

The fact that the cap is limited to primary homeowners is also considered discriminatory by Mockler.

She believes property tax increases always depend on what the market will bear.

Bear sees property taxes as a tough nut to crack and says it’s debatable whether the new law is constitutional.

Bear said that while he opposes Amendment A, he does not do so outright and believes that while “it’s not the worst thing, it’s just not that helpful.”

“This is just a simple tool to make voters feel like they’re getting a tax break,” he said.

Bear worries it could lead to increases in commercial and agricultural property taxes to offset lost tax revenue from homeowners.

In turn, Bear sees those taxes eventually being passed on to the consumer as prices rise. In 1988, commercial properties were consolidated at the same tax rate as residential properties in Wyoming to protect industry from future growth.

If the amendment fails, Bear said, the Legislature will continue to pass tax-exempt bills until they are challenged in court, which he acknowledges could happen.

“If it doesn’t pass, we will continue to use the release methodology until the courts say we can’t,” he said.

In June of this year, Mockler voted against certifying 2024 assessment values ​​for Wyoming counties due to her constitutional concerns. She expects a lawsuit will be filed at some point over some of the takeover bills.

Many, like Bouchard, argue that a constitutional amendment is needed to make some of the tax relief bills passed this year constitutional. Mockler and Bear disagree.

“I think everyone thinks it’s a panacea, but it’s not,” Mockler said.

What are other states doing?

A similar proposal passed in Texas in 2023, providing $18 billion in tax cuts for homeowners and businesses.

But some in Texas say it led to taxes increase According to Newsweek, some appraisal districts have increased their property values ​​in what some say is a “counteraction to the ‘bailout’.”

In Nebraska, a proposal similar to the one being considered in Wyoming gained traction in the Legislature in August but has since stalled.

California established property taxes based on the purchase price of a home in 1978 and has never looked back. However, many people argue that this has led to significant increases in other taxes levied there since then.

This fall, North Dakota voters will consider a proposal to significantly eliminate property taxes in their state. Similar concerns have been raised there, but lawmakers will simply raise taxes elsewhere.

“These fear tactics will come back to bite them,” Bouchard said. “They just can’t see beyond their noses in this fight. If it’s so difficult to achieve partial change (in Wyoming), then think how difficult it will be to achieve what North Dakota is doing.”

Leo Wolfson can be contacted at [email protected].