Gov. Mark Gordon approved a 25% tax cut for most homes earlier this month and experts said its impact on general funds will be outsized in counties with less revenue streams.
In the Cowboy State, residential property taxes prop up education, and other public services like law enforcement, road maintenance and firefighting.
This year’s tax cut applies to the first $1 million of a home’s assessed value. The 25% cut is tame compared to a failed proposal from the Senate to cut property taxes by 50%.
The bill passed despite pushback from some counties about its impact on services with no end date in sight. Lawmakers also didn’t set aside other money to “backfill” or make up for loss in revenue at a local level.
But those losses will hit unevenly across the state.
In Teton County, most free-market homes are worth well over $1 million, plus there’s a steady stream of sales tax revenue from tourists. County Assessor Melissa Shinkle said that for these reasons, the general fund is only expected to decrease by 3%.
According to County Commissioner Natalia Macker, agencies that provide public services like water conservation, weed control and firefighting are expected to see slight budget cuts. Macker added that Central Wyoming College might also be in the mix.
Most other counties are expected to fare much worse, though the full impact won’t be known for a few weeks.
“They’re kind of running on shoestrings as it is,” Shinkle said. “They don’t have a lot of money and their taxes didn’t go up like our taxes went up.”
Shinkle’s referring to the influx of home-buying during the COVID-19 pandemic sent real estate prices soaring statewide.
Critics during the legislative session said the losses from the cuts could be devastating for maintaining public services, particularly in the state’s most rural counties.
Crook County, with a population under 8,000, could be one such county.
“It’s roughly about a 30% decrease,” said Dan Thomas, the county’s assessor of property valuations. “I’m sure we will have to restructure some stuff and go from there.”
Counties are beginning their annual budgeting process, as are school districts.
In Weston County, the school district is bracing for cuts because of the new law.
Angela Holliday is the business manager for the county’s School District No. 1 and said the district will have to reckon with slightly declining enrollment numbers, which also means less funding.
Shinkle acknowledged that even though Teton County will lose “a lot of money,” it has the ability to raise some taxes that a few other counties lack, since commissioners have kept rates below the maximum.
County Commissioner Natalia Macker told KHOL that if the general tax fund losses hit Teton County hard, elected officials may consider raising rates. For the last five years, commissioners have lowered rates.
“The property tax reductions have the potential to be highly significant, maybe less significant in the short term because there are levies that we can adjust to accommodate for that lost revenue,” Macker said.
Sophia Boyd-Fliegel contributed reporting.
