Green River Star -

By Buck McVeigh
Wyoming Taxpayers Association 

Legislature should cut costs

 

January 31, 2018



Despite improved revenue forecasts, let’s not fool ourselves into thinking that Wyoming has once again dodged the golden bullet.  Wyoming faces a very, very steep climb to get out of this difficult budget deficit particularly with correctly funding K-12 education.

That is why the Wyoming Taxpayers Association encourages a simple strategy used by many Wyoming households when money is tight. Reduce spending and temporarily stop putting funds into savings until you can earn more money.

First, the recommendations in the recent state efficiency report by Alvarez & Marsal Public Sector Services could save the state $227.6 million and that study only looked at four state agencies. Based on that study, the Wyoming Spending and Government Efficiency Commission has made several fine recommendations including creating a project management office to implement identified efficiency initiatives and coordinate further efficiency studies. The commission also recommended expanding shared services like human resources, financial systems, and integrating technology throughout the state’s agencies.

Second, until more permanent revenue solutions are found, Wyoming should divert funds intended for permanent savings. We are not suggesting that Wyoming dip into its existing savings account, but rather stop socking away so much money for a rainy day. Wyoming is in trouble now.

Two bills have been proposed that would re-direct the flow of revenue from savings, giving lawmakers an additional $130.5 million.  The first bill (18LSO-0289) would eliminate the $8 million cap on transfers to the School Capital Construction Account from mineral royalties. The forecasted fiscal impact in FY 2019 was $42 million for school capital construction.  The second bill (18LSO-0290) would provide for a deposit of a portion of mineral severance taxes into the general fund.  The forecasted fiscal impact in FY 2019 was $88.5 million for the General Fund. The Wyoming Taxpayers Association encourages the legislature to implement these recommendations.

Unfortunately, being more efficient and diverting savings does not change the fact that Wyoming spends more than its means. It is, therefore, illogical to think that Wyoming can solve this crisis with cuts alone and without new revenue sources. That is why the Wyoming Taxpayers Association is open to diversifying Wyoming’s tax structure. 

However, the several tax bills proposed so far do not meet the Wyoming Taxpayers Association’s Cornerstones of Taxation. These cornerstones evaluate tax initiatives on the criteria of justification, equity, balance, stability, and transparency. We encourage legislators to use both the cornerstones and the Wyoming Taxpayers Association as a tool for evaluating current and future tax bills.  

So where does that leave us? The Wyoming Taxpayers Association isn’t against more taxes. We fully recognize that Wyoming must broaden its tax base and pursue other revenue sources. We believe that the recommendations made for a reduction in government spending and the amount placed in savings should be the first go-to before tax increases. Any new taxes must be fair and transparent for both individuals and businesses.

 

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