One person, one vote

Joint Corporations panel eyes redistricting

Fremont County seeks ability to manipulate voting power

By Sarah Gorin

ESPC researcher

I’ve often characterized the ESPC’s work by using the title of a regular feature in The Week news magazine, called “Boring but Important.” The drawing of lines for election districts definitely falls into this category. In fact, it may take the prize for most important action that gets the least public attention.

This week the Legislature’s Joint Interim Corporations, Elections and Political Subdivisions Committee (“Corporations Committee”) met to discuss, among other things, county districting and the legislative redistricting that will follow receipt of the final 2010 census numbers.

Every ten years following the decennial census, election districts – congressional districts, legislative districts, city wards - are redrawn to recognize population changes. Each election district is supposed to contain approximately the same number of people to incorporate the principle of “one person, one vote.”

The advent of geographical information systems (GIS) has made drawing districts a relatively simple mapping exercise. However, the politics that go into it are anything but simple.

One complication is the mandate that we as a democratic society have imposed on the process via the federal Voting Rights Act. The Voting Rights Act prohibits dilution of the voting power of “communities of interest” – primarily racial or ethnic populations – by carving them up in separate districts.

We saw the Voting Rights Act applied here in Wyoming recently when several tribal plaintiffs successfully sued Fremont County to force creation of districts for county commissioner elections. The tribal plaintiffs pointed out that their votes were drowned in the current practice of electing county commissioners at-large (that is, county-wide).

The federal district court decision was scathing in its description of pervasive racism in Fremont County and ordered the drawing of five single-member districts for election of the five county commissioners. This process is now moving forward with a special primary election scheduled for Nov. 16 and a special general election for Jan.18.

Although these special elections are moving forward, the Fremont County Commission has appealed the federal district court decision to the Tenth Circuit Court of Appeals in hopes of having it overturned.

A court-ordered apportionment always results in single-member districts, and existing state law currently provides no other options. However, a number of Fremont County officials have been advocating for changes in state laws to allow “hybrid” districting where some county commissioners could be elected from single-member districts and some elected at-large.

Put simply, it appears the officials are looking for the next best thing to the old at-large system: a new system that gives the tribes “their” district and then virtually guarantees that a Native American candidate won’t have a chance anywhere else.

The ESPC commends the members of the Corporations Committee for heeding warnings from the tribal plaintiffs’ attorney that the Fremont County Commissioners saw the proposed county districting bill as helpful to their appeal. The committee added language delaying the use of hybrid districting until January 1, 2012, but then approved the bill (the committee vote is provided below).

The committee’s bill will be offered for consideration in the 2011 Legislature. If passed, it would apply to all counties, not just Fremont County. However, since Fremont County currently is the only one with county commissioner districts, it’s difficult to view the bill in any light other than providing the county a means to once again manipulate voting power.

Legislative redistricting looms

The Corporations committee members also heard an update on preparation for legislative redistricting, which will take place in the 2012 legislative session. Final census figures will be received next spring, and depending on whether they reflect the downturn in the state’s economy that took place in 2009, significant changes in districts may be in store.

Because legislative redistricting takes place only every ten years and therefore the institutional memory is limited, the ESPC presented background information on the original legislative apportionment in 1992 and the first reapportionment in 2002.

The ESPC’s preference is to maintain the single-member district system as the one most easily understood by voters and also providing them with the highest level of accountability.

Committee vote on the hybrid county districting bill:

For: Senators Cale Case (R-S25, Lander, committee co-chair), Charles Scott (R-S30, Casper), Stan Cooper (R-S14, Kemmerer); Representatives Kermit Brown (R-H14, Laramie), Pete Illoway (R-H42, Cheyenne, committee co-chair), Tom Lubnau (R-H31, Gillette), Dave Miller (R-H55, Riverton), Tim Stubson (R-H56, Casper), Dan Zwonitzer (R-H43, Cheyenne)

Against: Senators John Hastert (D-S13, Green River), Wayne Johnson (R-S6, Cheyenne); retiring Representatives Ross Diercks (D-H2, Lusk), Mary Hales (D-H36, Casper)

What's next for Wyoming?

GOP landslide brings questions about future course

The GOP landslide on election day leaves observers wondering how major issues facing the state will be addressed. Wyoming Republicans pushed Democrats to the lowest point in years in the state legislature and swept all five statewide offices, including, as expected, the governorship.

Governor-elect Matt Mead, the former U.S. attorney for Wyoming under President George W. Bush, won the open seat with 72% of the vote.

Mead has promised to join the states suing to overturn the Affordable Care Act. On the campaign trail, he referred to a state pilot program as Wyoming’s answer to questions about covering the uninsured and holding down costs – even though the pilot (which is a health care plan, not health insurance) has yet to be implemented, much less evaluated. Wyoming residents will be looking for Mead’s ideas on keeping community hospitals and nursing homes solvent, meeting the state’s need for primary care providers and addressing rising premiums for Wyomingites fortunate enough to have insurance.

Mead has said he will resist increases in the state’s minimum wage, which stands now at just $5.15 per hour for workers not covered by the federal minimum wage. He has expressed support for sealing the border to stop illegal immigration, while also stating that legal immigration makes our country better. At the state budget level, it is unclear how Mead’s administration will address funding for infrastructure needs in communities around the state, or deal with fluctuations in state revenues.

Republicans captured 50 of 60 seats in the Wyoming House, taking nine seats that had been held by Democrats the past two years. In the Wyoming Senate, the GOP won 13 of 15 seats, reducing the number of Democrats to four out of 30 members. Senate Minority Leader Katherine Sessions was defeated by Leslie Nutting, an opponent of health care reform and reproductive rights. Nutting will be the only woman in the Senate. The small number of Democrats raises questions about committee assignments.

Although Wyoming legislators perennially campaign against over-regulation, past efforts to overhaul or “streamline” regulations have resulted in only minor tweaks as lawmakers and citizens come to realize how regulations protect the state’s communities and natural resource base as the mineral industries boom and bust. With new developments such as the near-disappearance of the mule deer herd on the Pinedale Anticline and possible contamination of groundwater near Pavillion by fracking, Wyoming residents probably will be cautious about giving energy extractors a freer hand.

Historically, Wyomingites also have been reticent to intrude into each other’s private lives, as evidenced by the defeat of a ballot initiative banning abortions and, more recently, the defeat of efforts to amend the Wyoming Constitution to prohibit gay marriage or civil unions. Bills on these topics may be offered in the 2011 session, even though they seem at odds with conservative views on keeping government out of private decisions.

The election results point toward opportunities to test reality against rhetoric. Just as support for the Affordable Care Act has gone up as people begin to experience its benefits, it may well be that support for budget cuts or intrusive legislation will go down as people see such proposals play out.

Insurance companies battle health care reform regs

By Barb Rea

Editor's note: Barb Rea is Wyoming's consumer advocate to the National Association of Insurance Commissioners (NAIC). She is attending the NAIC quarterly meeting in Orlando, Fla. She also is volunteering on behalf of Consumer Advocates: Project Healthcare, a group of Wyoming advocates raising the consumer's voice in health care reform. The NAIC is crafting rules that will guide implementation of the the Affordable Care Act.


Health reform is not going to happen magically. The Affordable Care Act (ACA) established the framework for changing the system and now people are working hard to write the rules and regulations that will make it happen.

When you look at the details and the intent of the law, each piece is designed to move the insurance industry to change the way it does business. In exchange the industry will get more customers.

We are trying to move the insurance industry from making its money off risk selection (providing coverage only to healthy people) to one that competes on providing better value to its customers.

But it won’t be easy. For instance, one of the early reforms scheduled to begin Jan. 1, 2011, requires that insurance companies to spend more of your premium dollar on health care (80% in the individual market and 85% in the group market) and less on profit. This calculation is known as the Medical Loss Ratio.

And the companies have to prove they’re meeting the Medical Loss Ratio requirement. If they don’t reach this ratio, they have to give the money back to consumers in the form of a rebate. The law is requiring public transparency and accountability—new concepts in the insurance world.

The goal of this reform is not so much to get money back from the insurance company but rather to force the companies to price their products correctly.

Over the last 5 months the National Association of Insurance Commissioners (NAIC) has brought together consumer representatives, insurance commissioners and insurance company representatives to craft rules and regulations on the Medical Loss Ratio, as assigned to them through the new federal healthcare law. They have been conferencing sometimes daily to decide what numbers have to be reported and create a way to collect and report this information.

This week at NAIC’s quarterly meeting in Orlando, the final decisions on this topic will be made. As you can expect there has been considerable wrangling, with the industry trying to include as many items as possible in the medical expense side of the equation and as few as possible on the overhead side. The consumers won a good number of those battles but not all.

Now just days before this final vote, the industry is pushing for several last minute changes in the calculation of the Medical Loss Ratio. The changes essentially mean many companies would never have to pay a rebate (or change their pricing).

Here are the changes they seek:

• They want brokers’ commissions excluded from the equation;

• They want companies who sell in several states to be allowed to aggregate their numbers nationally, which would enable them to disguise high profits in one state by combining loss ratios from those states with loss ratios from other states where they may charge lower prices or pay higher health care costs;

• The industry also wants to change the actuarial formula previously adopted by the drafting group for evaluating compliance with the Medical Loss Ratio standard. Known as the “credibility adjustment,” the industry wants a change that favors insurance companies over consumers.

The implications are stunning. The industry can appear to be helping to transform the system but continues to try to get away with as much as possible to maintain “business as usual.” This is how they have made their fortunes and there is no reason to believe they won’t continue to behave that way.

Transparency and oversight are provided for in the ACA. To get this to work, we must be vigilant in monitoring the transformation of the health care system. If we don’t have citizens willing to take this job we are not going to move this to the finish line.

A problem of improper framing

AmericaSpeaks puts safety net on the chopping block
Minimizes or ignores other options

The Center for Economic and Policy Research has developed a devastating critique of the AmericaSpeaks guidebook prepared for meetings across the nation Saturday.

The meetings are intended to assess public opinion on how the U.S. should address its budget deficit.

The AmericaSpeaks process has a good reputation for helping communities of all sizes resolve thorny public issues. It has conducted meetings to help New Yorkers figure out how to re-build Ground Zero and in New Orleans, AmericaSpeaks conducted a discussion of recovery plans and efforts after Hurricane Katrina.

The guidebooks prepared for its meetings frame the discussion presented to participants.

And that’s the problem. The guidebook for this weekend’s deficit-reduction meetings essentially leaves out many policy options that would favor lower- and middle-class Americans. (You can download the guidebook here. Click on the Federal Budget 101 button in the right-hand column.)

For example, as it projects the deficit for 2025, the guidebook fails to account for expiration of the Bush-era tax cuts for high earners. Those cuts will expire this year. According to CEPR, “This implies an interest burden that … is $40-50 billion less than what is assumed in the guide.”

I hope people attending any of these meetings will read Dean Baker’s column which dissects the guidebook and points out its many short-comings. There are
many options that should be considered as the country considers deficit reduction.

Unfortunately, the discussion as framed by AmericaSpeaks puts the social safety net on the chopping block while minimizing or completely ignoring many other options.

A closer look at the discussion materials for the Town Hall meetings, CEPR's Nicole Woo notes, shows that Saturday's game will be played with a stacked deck. The guidebook authors claim to include input from a broad range of view points in order to frame an intelligent discussion of the nation's long-term budget problems. But, as CEPR's analyses of their Federal Budget 101 and Options Workbook detail, their guides "do not live up to their hype," Woo said.

Please share this information with anyone you know who plans to participate in these important meetings.

The meeting in Casper will be staged in the Casper Events Center. It begins at 9:30 a.m. and ends at 4 p.m.

The AmericaSpeaks Town Meeting sites:

Large-scale sites:

Albuquerque, NM
Chicago, IL
Columbia, SC
Dallas, TX
Philadelphia, PA
Portland, OR

Small-scale sites:

Augusta, ME
Casper, WY
Des Moines, IA
Detroit, MI
Grand Forks, ND
Jackson, MS
Los Angeles, CA
Overland Park, KS
Louisville, KY
Missoula, MT
Portsmouth, NH
Richmond, VA
San Jose, CA

Wyoming needs complete lobbyist reporting

Public deserves more information about influence

By Dan Neal

Politics and public policy-making often come down to money and who has it to spend on candidates or on lobbyists that can help a interest group get what it wants.

In Wyoming, candidates for public office must report the contributions they receive and the expenditures they make. But lobbyists don't have to report many of their expenditures nor details about their funding resources. With Wyoming's lax lobbyist disclosure law, it's as if lobbyists simply appear in the Capitol without anyone spending any money to get them there.

On May 12, the Equality State Policy Center asked the Joint Corporations, Elections and Political Subdivisions Committee to require professional lobbyists working in Wyoming as well as the companies and people who hire them to make public how much money they spend to influence state legislators and other policy-makers.

The request, by the way, implies no improper behavior. Lobbying done well with integrity fills a necessary role in a democracy.

Here’s the basic argument the ESPC made to the Joint Corporations Committee when it met earlier this month in Lander:

Why is reporting necessary?

• It demonstrates the importance of the work the Legislature does. A full accounting of lobbyist spending will show the general public how invested various interests are in the decisions made by the Legislature.

• Since individual state legislators do not have paid staff, lobbyists in Wyoming fulfill a particularly important role of providing citizen legislators with information. It is the presence of lobbyists that makes a difference. The public deserves to know what it takes to post a presence when the Legislature meets – in Cheyenne or during the interim.

• It is an important part of bringing the process of making state policy fully into the sunshine. People deserve to know what the oil industry, the coal companies, the railroads, and nonprofit organizations spend to influence their representatives and government officials.

• About 350 lobbyists registered in 2010. Existing law required only a very few to file reports, mostly to report receptions held for legislators. Many who file anyway report zero expenditures.

What is needed:

• People paid to lobby, including attorneys, should be required to report what they were paid and they should report their expenses.

• Employers of lobbyists should report how much they paid lobbyists and how much they spent on other activities intended to influence legislators, other officials, and the public to support or oppose legislation. (Current law requires reporting by the employers of lobbyists.)

• The law should cover both legislative and administrative lobbying.

• Lobbyists should file quarterly. (This provides a timely accounting.)

• Lobbyists should list clients, and how much each pays.

• They should list what bills and governmental actions were lobbied and for which client.

• Lobbyist reports should be subject to some form of enforcement mechanism.

The ESPC asked the Joint Corporations Committee that the reporting ultimately be made available in a searchable database available electronically via the Secretary of State’s website.

The committee showed considerable interest in the idea. Several, including Co-Chairman Cale Case, R-SD25, Lander and Rep. Kermit Brown, R-HD14, Laramie, asked pointed questions about lobbying by public interests, such as the University of Wyoming and other agencies.

The ESPC supports broad disclosure by all interests lobbying the Legislature. Even if they’re simply providing information at a committee meeting, state agencies and other public agencies certainly could be directed to report the cost of doing so.

When Sen. Case asked if the committee should entertain a motion to draft a bill, Sen. Charles Scott, R-SD30, Casper, objected, noting that the topic was not “noticed” on the committee agenda.

Instead, Sen. John Hastert, D-SD-13, Green River, made a request for the Legislative Service Office to research lobbyist disclosure in neighboring states and tell the committee how Wyoming’s disclosure requirements compare.

The topic is likely to appear on the agenda of the joint committee’s Sept. 28 - 29 in Casper.

A side note: Sen. Scott expressed considerable interest in determining who supports the ESPC and similar groups, saying he finds it difficult to determine who exactly they represent. He indicated he prefers disclosure legislation that would enable him to know the names of individuals who contribute to the ESPC and similar groups.

The ESPC does not provide that information, though people who do contribute funds to the ESPC certainly can make their support public. Still, the U.S. Constitution protects the right of people to associate freely. The ESPC told the committee that the right to maintain the privacy of contributor and membership lists was affirmed in a 1958 U.S. Supreme Court case, State of Alabama v. the National Association for the Advancement of Colored People.

But what the ESPC is, certainly is not a secret. The ESPC told the committee that the organizations that belong to its coalition are listed on the internet, along with brief biographies of the ESPC board officers and ESPC staff.

Sen. Scott asked the Legislative Service Office to research the law regarding protection of membership lists.

Health reform implementation

Health insurance reform moves to state policy arenas

The passage of health insurance reform certainly has stirred emotions here in Wyoming, where statewide candidates seem to be in a contest to see who can come up with the most frightening descriptions of it to justify their calls for repeal.

We see it as a major victory for Wyoming children and families.

The new law advances the financial security and personal health of Wyoming citizens. It delivers reliable coverage that won't disappear if they get sick or lose a job.

One of the chief advantages of the new law is the intent to cover everyone. The law prohibits insurers from refusing coverage because of pre-existing conditions and it enables families to keep their children on their policies through age 26.

The requirement that insurance companies spend at least 85% of their revenues on the health care of their customers likewise is positive and is representative of the law's intent to bring some sunshine into a system that for too long has been, shall we say, less than transparent. More transparency is critical to controlling costs and improving the quality of care.

Barb Rea, the ESPC's part-time development director, served on the Wyoming Healthcare Commission for several years as an appointee of Gov. Dave Freudenthal. That service and her own studies have given her a broad knowledge of the issues involved in reforming health care. We asked her to represent the ESPC on the National Association of Insurance Commissioners’ consumer liaison committee. The NAIC will be instrumental in designing the rules under which the states will implement the new health insurance reform legislation.

Rea recently attended the NAIC meeting in Denver and offered the following observations:

I have just returned from the spring meeting of the National Association of Insurance Commissioners (NAIC) as one of several new consumer representatives serving on consumer liaison committee. This organization and this committee will play an important role as we begin implementation of health reform legislation.

Wendell Potter, posts an excellent summary of this meeting and the role of the NAIC in the Huffington Post which you can read here.

The short version is that the states will be responsible for much of the work of implementing the new health reform bill. The law requires that many new regulations be written to govern the way health insurers do business. This work will fall to not only to the U.S. Department of Health and Human Services but also to the National Association of Insurance Commissioners (NAIC).

The NAIC exists to help state insurance regulators achieve five primary goals:

• protect the public interest;
• promote competitive markets;
• facilitate the fair and equitable treatment of insurance consumers;
• promote the reliability, solvency and financial solidity of insurance institutions;
• and support and improve the state regulation of insurance.
  

So, the NAIC will play an important role in developing standards that both protect consumers and promote uniformity throughout the industry. Many of these laws, regulations and/or rules developed on the federal level will then be modified and adopted at the state level to give states the authority to enforce them.

There is no time to waste – many need to be in place within the next 6-12 months. So much of our time was spent determining how to ensure that the consumer perspective was going to be represented as the NAIC moves forward.

The NAIC executive committee stated its intention to utilize its existing committees to complete these responsibilities. The role the consumer liaison committee will play is still not clear. The consumer liaison committee specifically asked the NAIC:

1. to create a publicly accessible “plan of action” developed with input from consumer representatives;
2. to fully incorporate consumer advocates into the NAIC health reform work plan;
3. to prioritize their tasks based on the needs of the consumers;
4. and to significantly expand consumer participation at the NAIC proceedings.
   

While we await a response from the governing board of the NAIC, the consumer liaison committee will begin immediately to assess our resources and organize into work groups around the most urgent issues:

• High risk pools;
• Grants for establishing ombudsmen offices to assist consumers in every state;
• Medical Loss Ratio (MLR);
• Rate reviews;
• New insurance policy requirements (e.g.) pre existing conditions, keeping young adults on parent policies, first dollar coverage for prevention.
  

Next steps for Wyoming and the ESPC
It was humbling to be among such knowledgeable and effective colleagues, many of whom have been working on reform for most of their careers. We certainly have a lot to gain as this process will provide both context and product for much of the decision-making that will fall to our legislature. It should make their job easier.

But, it soon became clear to me that the process of implementing anything at a state level here (or in any other state already fighting the intent of this law) was going to be more complicated than cutting and pasting good ideas into Wyoming law. Our first task will be to cut through the rhetoric and talk about how the new law addresses the health care access problems people are facing.

Tax studies set for interim

State needs sustaining revenues
Revenue committee will examine tax policy in 2010

By Sarah Gorin

State revenues held well enough for the Wyoming Legislature to get through the 2010 budget session without having to make drastic cuts. This may or may not be the case two years from now, mostly depending on prices for natural gas.

Wyoming’s dependence on mineral revenues exposes state and local governments to the inevitable booms and busts of the extractive industries. Our state lacks a consistent tax framework that will carry state and local government services and programs into the future on a sustainable basis.

The Equality State Policy Center, along with the Wyoming Taxpayers Association, is working hard to educate the public and lawmakers about sustainable tax policies. We hope that these will be part of the discussion when the Joint Interim Revenue Committee re-examines the wind energy tax bill that was passed, along with a one-year extension of the sales tax exemption for purchases of manufacturing equipment.

The ESPC suggested four items the interim committee should consider when studying the sales tax exemption for manufacturing equipment:

1. Other states which offer a similar exemption have other taxes — such as personal and corporate income taxes — to capture revenues if the exemption attracts new manufacturers, but Wyoming does not;
2. If the exemption benefits only existing manufacturers (as opposed to attracting new ones), then what is the rationale for giving a break to manufacturers and not other businesses?
3. The data from the reporting on the exemption suggest a substantial gender wage gap within manufacturing; and
4. Purchases of manufacturing equipment may eliminate jobs, rather than increase them.

All the tax exemptions passed in 2010 had reporting requirements, and the sales tax exemption for purchases of equipment for data processing centers also has the beginning of a “clawback” – that is, taxes will be due if the company does not produce jobs at an appropriate level.

We should note that although drastic cuts were avoided, programs and services will not be continued at previous levels due to reduced staffing and resources. Wyomingites can expect less frequent inspections, longer waits and fewer opportunities for jobs in both the public and private sectors (many private sector jobs depend on public spending for highways and construction).

A break for innovative coal power?

The Joint Interim Minerals, Business and Economic Development Committee will again consider a sales tax exemption for “Coal value added facilities.” The committee approved a bill for the just-completed Budget session. It would have included “oxy-combustion or similar advanced coal facilities” in an existing tax exemption for new coal gasification or coal liquefaction facilities. A fiscal note on the bill (SF21) indicated the inclusion would cost the state more than $25 million in lost sales tax revenues on a 150 megawatt oxy-combustion power plant.

The fiscal note apparently doomed the bill. Senate File 21 was not considered for an introduction vote.

Sarah Gorin conducts policy research and lobbies the Wyoming Legislature for the ESPC.

Legislature sets interim work

Better lobbyist disclosure on the agenda

Comprehensive lobbyist disclosure will help Wyoming people understand the value of the work done by the Wyoming Legislature. The issue will be among the topics considered by the Joint Corporations Committee over the next nine months.

The Legislative Management Council Thursday afternoon authorized the interim agendas for all 10 legislative standing committees and nine select committees. (Watch for it to show up on the Legislature's web site.)

The ESPC asked the Joint Corporations to take up fuller lobbyist disclosure because Wyoming's existing lobbyist disclosure laws may be the most lax in the nation. Lobbyists are required to disclose only four things:

• Their sources of funding (the company or group that pays them);
• Any loans, gifts, special discounts to legislators that exceed $50 in value;
• Special events held for legislators (usually receptions held during the winter sessions);
• The cost of advertising to influence legislation (thought with no definition of what that might be).
  

Several years ago, ExxonMobil flew in expert witnesses from Texas when it was trying to minimize it severance tax on gas produced by its operations in western Wyoming. But the company did not have to disclose how much it spent to do so. The ESPC believes the public would find such disclosure eye-opening.

But most lobbyists, including contract lobbyists who have client lists that include insurance companies, energy companies and utilities, disclose nothing because the law does not require it.

The ESPC will provide information about lobbyist disclosure laws in other states along with ideas for addressing issues specific to Wyoming when the Corporations committee meets to discuss the topic later this year.

Other topics of interest, including 'dog catching'

Along with the League of Women Voters, the ESPC asked the Select Committee on Legislative Technology and Process to determine how to record and make public more votes by legislators. Many committee votes and floor votes on amendments are not recorded. Recording them will keep legislators more accountable to their constituents.

The Joint Transportation, Highways and Military Affairs Committee will analyze "Railroad Contract Carriers" and predatory lending.

The railroad contract carriers study comes from an effort by union railroaders to get the Legislature to pass laws to regulate small passenger carriers, more explicitly, the vans that carry them to and from trains. Railroaders work shifts are limited under federal law. When the shift ends, they must stop the train. The contract carriers then run a crew out to the stopped train, a job called "dogcatching." The crew on the train trades places with the new crew in the van, then rides back to its terminal in the van.

Unfortunately, these vans escape federal regulation so there is no requirement that drivers be tested for drug or alcohol use (as the railroaders are) nor are the vans subject to mandatory inspections. Railroaders have reported riding with drivers so fatigued that they fell asleep at the wheel. Since the vans use public roadways, public safety is also a concern.

Cheyenne-based military officials say predatory lenders have become a problem for military families. Those small loans usually carry extraordinary interest rates that capture borrowers in a debt trap.

Senate Revenue Committee

Sales tax bill targets internet purchases

Fight with Exxon continues; two tax breaks OK'd

By Sarah Gorin

In its last meeting of the 2010 session, the Senate Revenue Committee quickly worked several bills in its small committee room crammed with lobbyists.

The Senators voted 3-2 to approve House Bill 29 Taxation of specified digital products. It imposes a sales tax on such digital products as downloaded movies, songs, ringtones, etc. that become the permanent property of the user.

The bill is intended to put internet vendors on the same plane as a brick-and-mortar seller of the same product. For example, if you buy a DVD at a store in Wyoming, you pay sales tax, but you might not if you buy the same thing over the internet.

The ESPC favors the bill. Failing to tax these products essentially creates a new exemption in Wyoming’s tax statutes. Senators voting for HB 29 were Chairman John Schiffer (R-S22, Kaycee), Grant Larson (R-S17, Jackson), and Drew Perkins (R-S29, Casper).

Cale Case (R-S25, Lander) and Marty Martin (D-S12, Rock Springs) voted no.

ExxonMobil's wilting glare

Next on the agenda was House Bill 78 Natural gas – taxation. It addresses a subject many hoped to hear no more of after the 2008 Legislature finally passed a bill incorporating a new method of valuing producer-processed natural gas. But last November, the Wyoming Supreme Court – in a case brought by ExxonMobil Corporation – ruled that Wyoming’s laws are not clear on a point central to the litigation, which concerned production from ExxonMobil’s LaBarge-Shute Creek operation, and that ambiguity must be resolved in favor of the taxpayer.

As a result, the amount ExxonMobil owed in severance taxes was reduced.

House Bill 78 was an attempt to clarify the law, but it went down amidst heavy lobbying from ExxonMobil lawyers and some doubt as to whether it was better to go ahead with a bill or to wait while ExxonMobil and the Wyoming Department of Revenue negotiate.

The ESPC favored the bill on the grounds that having legislation would put more weight on the negotiations. The topic likely will be included in interim study for the Joint Interim Revenue Committee (between the end of the current session and the opening of the 2011 Legislature).

Chairman John Schiffer and Sen. Cale Case voted for HB 78.

Sens. Grant Larson, Marty Martin, and Drew Perkins voted no.

Tempting tax breaks

The committee took up two bills proposing tax exemptions. House Bill 44 Taxation of property used for economic development, proposes a property tax exemption for “property used for economic development” – that is, land owned by a community economic development organization,

House Bill 67 Data processing center - sales/use tax exemption, will exempt purchases of computers and other equipment needed for large data-processing centers. Legislators have been told that a one such center is poised to locate in Cheyenne. Advocates for the bill say the sales tax break is essential to bring it to Wyoming.

It seems rather odd that despite the state’s dismal revenue picture, the majority of legislators seem unable to quit proposing and enacting tax exemptions. Some believe that the exemptions will attract businesses that will generate other tax revenues. But Wyoming already offers an advantage: it does not have corporate or personal income taxes – unlike most of the states it is “competing” with.

The ESPC believes it is highly unlikely that state and local governments will end up with more money as a result of a sales tax exemption.

The ESPC also is concerned about the state’s current inability to quantify most of its tax exemptions and exclusions so that lawmakers and the public can evaluate whether their cost is worth it. Consequently, the ESPC advocates for the addition of reporting requirements to each tax exemption bill.

The Senate Revenue Committee unanimously adopted an ESPC-offered reporting amendment to HB 44, It then passed the bill.

Chairman John Schiffer and Senators Grant Larson and Marty Martin voted for the measure.

Senators Cale Case and Drew Perkins voted no.

Senator Larson noted that he would bring a floor amendment to tighten the definition of a qualifying community economic development organization.

A Wyoming "clawback"

House Bill 67, the data processing center exemption, already had a reporting requirement. It also includes an initial attempt at a “clawback” provision – that is, the company claiming the tax exemption must show that it has not only purchased a certain amount of equipment, but also that it is generating (or will generate) an appropriate number of jobs for the size and stage of the development of the center.

If it cannot show appropriate job creation, the exemption recipient will be liable for the tax.

While this clawback probably could be constructed more strongly, the ESPC commends this line of thinking, which represents a first in Wyoming tax policies.

Chairman John Schiffer and Senators Grant Larson, Marty Martin, and Drew Perkins voted for HB 67. Senator Cale Case voted no. Again, Senator Larson indicated he would bring a floor amendment, this time defining “qualifying equipment.”

Sarah Gorin conducts policy research and lobbies the Wyoming Legislature for the ESPC.

Democracy and special excise taxes

Buchanan bill lifts majority rule on 'specific purpose' tax

By Sarah Gorin

Although the bill attracted no press attention, interesting exchanges took place when the House Revenue Committee and subsequently the full House considered HB 115 Specific purpose excise tax – voter petition.

Wyoming law currently allows local governments to seek voter approval to impose excise (sales and use) taxes on top of the statewide 4% sales tax. Additional pennies may be designated for general revenue, lodging, specific purposes, and/or economic development, up to an additional three cents.

Proposed sales taxes are put on the ballot by the governing authority of a county – the county commissioners – in agreement with at least two-thirds of the incorporated municipalities within the county. As noted above, any additional tax requires approval from a majority of voters before it can go into effect.

The requirement for the two-thirds agreement effectively gives smaller municipalities within a county a way to ensure that they get some of the money. For example, in Albany County, the county commissioners have to cut a deal with the City of Laramie (where most county residents live) and the Town of Rock River (population approximately 200) to get a tax proposal on the ballot.

Looking at it another way, smaller municipalities – a minority of the county population – hold veto power over the majority of county residents.

This weighting of power to a minority over the majority probably is constitutionally questionable, and it came into focus in the debate over HB 115, brought by Torrington Republican Ed Buchanan and co-sponsored by 10 other legislators (see below).

In all the above cases except the specific purpose tax, a tax proposal can be brought to the ballot not only by the agreement of the local governments, but also by petition of 5% of the voters within a county. Buchanan’s bill simply adds the petitioning option to the specific purpose tax.

The first question asked was whether the petitioning provision would enable proponents of an additional tax to “get around” the required agreement of the local governments. Rep. Buchanan admitted that it would, but pointed out that this already is the case with the other three taxes and, of course, the proposed tax still would have to be approved by a majority of voters.

That response carried the bill through committee and then the House of Representatives (barely), but a number of lawmakers clearly were uncomfortable with anything that might deny the small municipalities their veto power.

Our representative government at both the national and state levels is based on the concept of majority rule with protection of minority rights. Extra scrutiny of the use of governmental taxation power is justified. But we also must maintain the fundamental commitment to democracy and citizen participation.

HB 115 specific purpose excise tax – voter petition
Sponsor: Rep. Ed Buchanan (R-H4, Torrington); co-sponsors Reps. Seth Carson (D-H45, Laramie); Pete Illoway (R-H42, Cheyenne); Lori Millin (D-H8, Cheyenne); Bryan Pedersen (R-H7, Cheyenne); Matt Teeters (R-H5, Lingle); Mary Throne (D-H11, Cheyenne); and Sens. Bruce Burns (R-S21, Sheridan); Marty Martin (D-S12, Rock Springs); Curt Meier (R-S3, LaGrange); Tony Ross (R-S4, Cheyenne)

Passed the House 2/22/10 with 33 ayes, 24 noes, 3 excused

Sarah Gorin conducts policy research and lobbies the Wyoming Legislature for the ESPC.

Tax battle at Exxon's Shute Creek facilities

House Revenue Committee clarifies valuation of ExxonMobil's sour gas


The House Revenue Committee Wednesday narrowly approved a bill to clarify the valuation of natural gas produced at ExxonMobil’s LaBarge-Shute Creek operation.

The history of tax disputes with ExxonMobil is long. Back in the late 1980s, Exxon declined to pay taxes on its gas production at Shute Creek, declaring that the gas was worthless – even as the company continued to produce and sell the gas. Exxon held that after it deducted all its expenses, including a large deduction for return on investment, there was no value left to the gas.

Exxon’s action triggered a legislative overhaul of the state’s mineral taxation statutes during the early 1990s.

Taxation of processed natural gas — the “sour” gas produced in western Wyoming that requires processing to remove toxic compounds — continued to be an issue throughout the decade and well into the current century. The 2008 Legislature at long last enacted a bill that appears to have addressed most of the problems.

The measure considered Wednesday, HB 78 Natural gas-taxation, is sponsored by Rep. Tom Lubnau II (R-H31, Gillette — pictured above) and co-sponsored by a bipartisan group of legislators including the Revenue Committee chairman, Rep. Rodney “Pete” Anderson (R-H10, Pine Bluffs), Rep. Jim Roscoe (D-H22, Wilson) and Sen. John Schiffer (R-S22, Kaycee).

The measure addresses another situation peculiar to the ExxonMobil LaBarge-Shute Creek operation: whether a facility located between the wellfield and the Shute Creek plant is a dehydrator or a processing facility. The difference is more than semantic, as it determines the “point of valuation” for the gas and therefore how much ExxonMobil owes in taxes.

In late 2009, the Wyoming Supreme Court held that Wyoming’s tax statutes on this point were ambiguous and that ambiguity must be resolved in favor of the taxpayer, ExxonMobil. HB 78 seeks to remove the ambiguity by adding definitions, thereby restoring the state’s position on the point of valuation.

The change will increase state severance and advalorem tax revenues on ExxonMobil's extraction by about $1.1 million in 2011 and an estimated $2.2 million in 2012 and 2013, according to the fiscal note attached to the bill.

Wyoming Attorney General Bruce Salzburg led off Wednesday morning’s testimony in concert with a lawyer for Sublette County, followed by a lawyer for ExxonMobil. It was a quick education (of sorts, since the third lawyer did not agree with the first two) for several of the committee members who were not involved in the years of legislative work leading up to the 2008 processed gas valuation bill.

Committee members voting for HB 78 were Reps. Amy Edmonds (R-H12, Cheyenne), Ken Esquibel (D-H41, Cheyenne), Patrick Goggles (D-H33, Ethete), Mike Madden (R-H40, Buffalo) and Owen Petersen (R-H19, Mountain View).

Those voting against it included one of the co-sponsors, Chairman Rodney “Pete” Anderson (R-H10, Pine Bluffs) and Reps. David Miller (R-H55, Riverton), Mark Semlek (R-H1, Moorcroft) and Sue Wallis (R-H52, Recluse).

The ESPC supports the bill and has long advocated that the state hire an expert to help with the valuation of the LaBarge-Shute Creek operation, which undeniably is unique, and to boost its investment in the technical and legal teams needed to counteract ExxonMobil’s aggressively litigious approach to tax issues.

House panel softens wind tax

Revenue Committee cuts tax rate

The House Revenue Committee Monday morning backed a bill that will impose a tax on power generated by wind turbines, but not before softening its impact by amending it to delay implementation and to reduce the tax rate substantially.

House Bill 101 Electricity generated from wind-taxation would levy an excise tax "upon the privilege of producing electricity from wind resources" in Wyoming. Gov. Dave Freudenthal called for legislators to support the tax in his State of the State speech last week.

The ESPC supports the idea, and told the committee that the state must tax renewable energy sources in order to sustain its tax base now and into the future.

Advocates for county governments said the tax is needed to produce the revenues necessary to maintain the roads and other basic services the wind-energy companies need. Still, Joe Evans of the Wyoming County Commissioners Association said, "We don't know what the correct rate of taxation should be."

Natrona County Commission Chairman Rob Hendry said Natrona County needs revenues to maintain roads, then quickly announced that as a contractor, he hopes to do business with the companies building wind farms.

Industry advocates lobbed rocks at the idea. A representative of Wasatch Wind, a wind power developer with offices in Canada and Utah, described the proposed rate of taxation of $3 per megawatt hour as "onerous."

Matt Grant, Rocky Mountain Power's lobbyist, said that the taxes will be passed on to customers. Since minerals producers are the company's largest customers in Wyoming, he said, "This tax will be paid by the minerals industry."

House Revenue Committee Chairman Rodney Pete Anderson, R-HD10, (pictured above) proposed an amendment to delay the implementation to 2012, rather than 2011 as the bill originally required. He also proposed reducing the rate of taxation to $1 per megawatt hour. Both those amendments passed.

The bill's fiscal note indicated the tax would generate about $14.8 million in both fiscal 2012 and 2013. But that estimate was based on the $3 rate. It's unclear how much the $1 rate will generate. Anderson said his amendment will postpone imposing the tax for the first three years a generator is in service.

An amendment to send all the revenues from the tax to the counties where wind power is generated was defeated. The bill proposes splitting the revenues, with 60% going to the state and 40% going to the counties where the power is produced.

Grant and other industry lobbyists like Dan Sullivan and Larry Wolfe argued for more thorough study. Wolfe opposed the tax. Sullivan suggested that state probably will develop a power generation tax “of some kind.” Wolfe said the tax would be the first power generation tax in the West, a point later disputed by Chairman Anderson.

Wolfe also said one of his wind-power clients, Duke Energy, has signed such tight contracts with Rocky Mountain Power to buy its electricity that it will not be able to pass-through tax increases as Rocky Mountain can.

When the committee considered the amendment to cut the tax rate from $3 per megawatt hour to $1, Rep Sue Wallis, R-HD52, Recluse, proposed cutting the rate to just 5 cents per megawatt hour. Her amendment failed, garnering support only from Rep. Mark Semlek, R-HD1, Moorcroft, and Rep. Amy Edmonds, R-HD12, Cheyenne.

The bill ultimately won approval from the committee on a 6-3 vote with Edmonds, Semlek and Wallis voting no.

Here's the committee vote as listed by the LSO:

Ayes: Representative(s) Anderson, R., Esquibel, K., Goggles, Madden, Miller and Petersen

Nayes: Representative(s) Edmonds, Semlek and Wallis

2/15/2010 H Placed on General File

An eye on Blue Sky

Discussion of the wind generation tax ranged fairly widely, with the committee focusing attention on Rocky Mountain Power’s Blue Sky Renewable Energy Program.

Rep. David Miller, R-HD55, Riverton, asked if any of the company’s wind-generated power is sole in Wyoming or if Wyoming customers are charged for it.

“No we are not,” RMP lobbyist Grant answered. He noted that once electricity enters the grid it is impossible to tell where or how any of the electrons were generated. The company simply gives customers the privilege to buy green power.

“How much of your green power is sold that way?” Chairman Anderson asked. “All of it or more than all of it?”

The company website notes that its customers can participate in the Blue Sky program “and help bring new renewable energy facilities on-line.” Once customers enroll in the program, RMP says it buys renewable energy credits from newly developed renewable energy facilities.

“Buying one 100-kwh block of Blue Sky each month for a year is as good for the environment as planting nearly 63 trees or not driving a car for 1,482 miles!”

The RMP web site lists this explanation of the calculation of environmental benefits:

"Rocky Mountain Power purchases the exclusive right to claim all of the environmental benefits from the generation of electricity produced by renewable energy power plants in the exact amount of Blue Sky purchases. The environmental benefits figures are based on the average non-base load generation emissions from the Western Energy Coordinating Council (WECC) region, as updated December 2008, and on data and calculations provided by the U .S. Environmental Protection Agency."

Sixty attend Citizen Lobbyist Training

Mock committee highlights workshop

CHEYENNE - The ESPC's annual Citizen Lobbyist Training Feb. 10 attracted 60 attendees to learn about the basic structures of the Wyoming Legislature and how they can affect public policy-making.

The training this year attracted many younger budding advocates including students from the Sage Trio program at Laramie County Community College, from Eastern Wyoming College, and from Casper College. A number of Americorps volunteers also attended including volunteers for the Wyoming Conservation Corps and United Way of Sweetwater County.

Five sitting legislators, including Sens. Cale Case, John Hastert, and Bill Landen and Reps. Keith Gingery and Deb Hammons, conducted a mock committee hearing. Seneca Riggins and Rachel Martinez of LCCC advocated for a proposal to extend Wyoming's Hathaway scholarship program to students who do not go to college directly from high school. (That's Seneca Riggins answering questions in the photograph above.)

The workshop also taught attendees how a bill becomes law, the attributes of a good lobbyist, how to use the Legislative Service Office website. Tours of the Capitol including opportunities to send messages into legislators in-session followed the workshop at The Plains Hotel.

States rights, doggone it

House introduces 2 states rights resolutions

The Wyoming House decided it will debate two resolutions asserting states rights Wednesday when it approved introduction of both HJ 2 and HJ 5.

A Senate resolution asserting the state's right to ignore any national health insurance reform failed to win introduction.

Sixteen reps and eight senators co-sponsored HJ 2 Assertion of states rights.

HJ2 is sponsored by Representative(s) Illoway, Anderson, R., Brechtel, Childers, Edmonds, Harvey, Lubnau, Madden, McOmie, Miller, Moniz, Quarberg, Shepperson, Simpson, Wallis and Zwonitzer, Dn. and Senator(s) Anderson, J., Bebout, Case, Cooper, Dockstader, Martin, Meier and Ross.

Here's the HJ 2 title: A JOINT RESOLUTION requesting Congress to cease and desist from enacting mandates that are beyond the scope of the enumerated powers granted to Congress by the Constitution of the United States.

2/9/2010 H Introduced and Referred to H01

Ayes: Representative(s) Anderson, R., Bagby, Barbuto, Berger, Blake, Blikre, Bonner, Brechtel, Brown, Buchanan, Cannady, Childers, Cohee, Craft, Davison, Diercks, Edmonds, Esquibel, K., Gingery, Goggles, Harshman, Harvey, Illoway, Jaggi, Kimble, Landon, Lockhart, Lubnau, Madden, McKim, McOmie, Miller, Millin, Moniz, Patton, Peasley, Pedersen, Petersen, Quarberg, Roscoe, Semlek, Shepperson, Simpson, Steward, Stubson, Teeters, Throne, Wallis, Zwonitzer, Dn. and Zwonitzer, Dv..

Nays: Representative(s) Byrd, Carson, Connolly, Gilmore, Hales, Hammons, Jorgensen and Thompson.

Excused: Representative(s) Hallinan and Philp.

Ayes 50 Nays 8 Excused 2 Absent 0 Conflicts 0

The House also voted to introduce HJ 5 Assetion of state sovereignty, though with less enthusiasm than it showed for HJ 2. This is the resolution that claims if the state finds the federal government exercises powers the state does not believe it surrendered, the Act of Admission is breached -- and Wyoming, presumably, could secede.

One wonders what the nation's great Civil War president, Abraham Lincoln, would think of this resolution.

HJ 5 is sponsored by: Representative(s) Childers, Cohee, Davison, Hallinan, Jaggi, McOmie, Shepperson and Wallis and Senator(s) Case, Coe and Townsend

2/9/2010 H Introduced and Referred to H01

Ayes: Representative(s) Anderson, R., Bagby, Barbuto, Berger, Bonner, Brechtel, Brown, Buchanan, Cannady, Childers, Cohee, Davison, Diercks, Edmonds, Esquibel, K., Gingery, Harshman, Harvey, Illoway, Jaggi, Landon, Lockhart, Lubnau, Madden, McKim, McOmie, Miller, Moniz, Peasley, Pedersen, Petersen, Quarberg, Semlek, Shepperson, Simpson, Steward, Stubson, Teeters, Wallis, Zwonitzer, Dn. and Zwonitzer, Dv..

Nays: Representative(s) Blake, Blikre, Byrd, Carson, Connolly, Craft, Gilmore, Goggles, Hales, Hammons, Jorgensen, Kimble, Millin, Patton, Roscoe, Thompson and Throne.

Excused: Representative(s) Hallinan and Philp.

Ayes 41 Nays 17 Excused 2 Absent 0 Conflicts 0


In the Senate, SJ 1 Health Freedom of Choice bill failed to win introduction Wednesday. It proposed an amendment to the state Constitution that asseerted the state's right to ignore any national health care system. It apparently did not stop the elderly from signing up for Medicare.

Here's the bill title: A JOINT RESOLUTION proposing to amend the Wyoming Constitution by creating a new section specifying that the federal government shall not interfere with an individual's health care decisions and prohibiting any penalty, fine or tax imposed because of a decision to participate in or decline health insurance, or to pay directly or receive payment directly for health care services.

2/9/2010 S Failed Introduction

Ayes: Senator(s) Anderson, J., Bebout, Case, Coe, Cooper, Dockstader, Geis, Hines, Hunnicutt, Jennings, Johnson, Meier, Nicholas, Perkins, Peterson, Ross, Townsend and Von Flatern.

Nays: Senator(s) Burns, Elliott, Esquibel, F., Hastert, Landen, Larson, Martin, Massie, Meyer, Schiffer, Scott and Sessions.

Ayes 18 Nays 12 Excused 0 Absent 0 Conflicts 0

Meanwhile, Sen. John Schiffer's bill to limit who can use eminent domain to force sales of rights of way for transmission lines easily won introduction. The bill, SF58 Eminent domain-limitations, restricts the use of the power of eminent domain to public utilities and power cooperatives.

Legislators pontificate on states rights

Resolutions demand that the feds back off

The Legislature opened today and, in a session that ultimately focus on state funding is off and running talking about states rights and health care.

It's to be expected in Wyoming, which like many Western states, loves to bash the feds with one hand while taking those green federal dollars with the other. Bernard de Voto condensed the thinking in his classic sardonic line: "Get out and give us more money."

In the Senate, President John Hines, R-Gillette, and others have proposed a constitutional amendment under SJ 1 Health freedom of choice. It challenges the federal health reform plan that may or may not be close to passage in Washington. D.C. This proposed amendment declares that the federal government cannot require Wyoming residents to buy health insurance. The sponsors claim the U.S. Constitution does not allow the federal government to impose such mandates.

It could be a signal that some Wyoming policy-makers will fight federal efforts to reform the nation's health care system. But it it doesn't mean that the legislators would oppose creation of some sort of insurance exchange by them. It does not preclude Wyoming lawmakers from imposing such mandates, just as they have done with the requirement that all drivers in Wyoming must show proof of insurance before the state will issue a driver's license.

The Senate states' rightests have compadres in the House. Rep. Bob Brechtel, R-Casper, has offered HJ 1 Resolution - State sovereignty, telling Congress to stick to the limitations of the 10th Amendment. Rep. Pete Illoway filed HJ 2 Resolution - assertion of states rights, again demanding that Congress stop mandating action by the states that exceed its 10th Amendment authority.

There's also HJ 5 Assertion of state sovereignty. It's a humdinger that in my brief reading indicates that any federal effort to limit the states' rights enumerated in the resolution will represent a breach of the Act of Admission under which Wyoming became a state; the breach means the states can dissolve and form another government — secession without saying the word.

The resolution implies that most federal criminal laws are unconstitutional. The sponsors believe federal government has no right to punish people guilty of racketeering, drug trafficking, and presumably for fouling the air we breathe and the water we drink.

The resolution says, "That all acts of Congress that assume to create, define or punish crimes, other than those enumerated in the federal Constitution and Bill of Rights, are void and of no
force."

What are those crimes? The resolution says this:

" ... the federal Constitution and Bill of Rights delegated to Congress a power to punish treason, counterfeiting of the securities and current coin of the United States, piracies, felonies committed on the high seas, offenses against the law of nations, slavery and no other crimes."

But the states have the power to do many things, including impose limits on the freedom of speech, religion, and the press, HJ 5 claims.

" ... power over the freedom of religion, freedom of speech and freedom of the press remains and is reserved by the states or the people, allowing states the right to judge how far the licentiousness of speech and of the press may be abridged without lessening their useful freedom and how far those abuses, which cannot be separated from their use, should be tolerated, rather than allowing the use to be destroyed."

Among other things, the resolution maintains the federal government does not have the power to restrict in any way the type or number of firearms or ammunition that Wyoming citizens may possess. After this resolution passes, if the feds continue to require permits to buy machine guns, the Act of Admission is breached. The Constitution dissolves and a new government will have to be formed. If it is formed, no state can be required to join.

Wyoming may just drop out of the whole deal.

Of course, we'd have to give up the millions we get in federal mineral royalty payments, subsidies for health care for the aged and for poor children, federal money for highways, school programs, etc.

State boundaries would be more interesting since these apparently would go around national parks, federal forests and grasslands, wildlife refuges, and maybe the military's electronic bombing targets, missile silos and F.E. Warren Air Force Base.

We might get to keep the national guard training facility at Guernsey though the other states might ask us to buy out the federal investments there.

I don't know. Maybe our legislators are just having some fun. We'll see if they debate the resolution.

A real worry

Meanwhile, there's a more ominous proposal for another run at limiting citizen rights to justice in medical malpractice cases.

Several House members have proposed HJ 6 Medical Malpractice. It proposes a constitutional amendment allowing the legislature to limit non-economic damages in medical malpractice cases to $250,000. It's basically the same amendment that Wyoming voters wisely rejected in 2004 despite claims from proponents that failure to make it law would spur doctors across the state to abandon their practices. The promised exodus did not happen.

Still, it's interesting to note that several of the sponsors of HJ 5, aimed a blocking federal limits on individual freedom, also are listed as sponsors of HJ 6.

Data shows importance of public sector jobs

Jobs and State & Local Government Spending Linked

This is Part IV of an ESPC analysis of state tax policies and policy proposals and their potential effect on the Wyoming economy

By Sarah Gorin
ESPC researcher

State legislators head into the 2010 budget session on February 8 facing what many of them have never experienced: drastically reduced state revenues due to the downturn in mineral prices.

Governor Freudenthal already implemented a 10% across-the-board budget reduction for fiscal year 2010 (which started last July 1), and has proposed a budget for 2011-2012 at about the 2010 level except for less state support to local governments.

Many people have suggested that if revenues are down, state and local governments should simply spend less, just like a household would do. But a household wouldn’t just spend less; it would also look for more income. A more balanced approach is needed.

Further, those who think the government checkbook should be slammed shut are missing an essential economic reality: that the link between the economic activity of state and local governments and the rest of the economy is particularly pronounced in Wyoming. Employment provided directly by state and local governments (including school districts) is an integral part of local economies, as you can see on this chart showing public sector employment by county.

The table, which shows that the share of jobs provided by state and local governments
ranges from 11% of total employment in Teton County to 50% in Niobrara County, tells only part of the story. A significant number of private sector jobs also depend on government spending for highways, water development, school facilities, and so on. This is encouraged by government programs such as the Wyoming Business Council’s “GRO-Biz” program aimed at helping businesses gain government contracts.

Government programs and services always should be provided in the most efficient manner possible. However, Wyoming decisionmakers also should be aware that because of the interconnected nature of our state’s economy, cutbacks in government spending also will hurt non-governmental employers. If five community college teachers are laid off, that’s five fewer people who are going to dine out at a Main Street restaurant.

Wyoming’s budget should make things better, not worse.

Wyo's Manufacturing Tax Exemption and Gender Wage Disparity

Reports on tax break finds pay gap

This is Part III of an ESPC analysis of state tax policies and policy proposals and their potential effect on the Wyoming economy


By Sarah Gorin
ESPC researcher

Wyoming ranks consistently at or near the top in “gender wage gap,” the difference in wages paid to men and women. A study commissioned by the Wyoming Legislature in 2003 examined factors contributing to Wyoming’s gender wage gap, including:

1. A concentration of women in part-time work, either by choice or due to lack of necessary support services such as adequate child care;
2. Relatively low wage levels in female-dominated occupations, such as teaching and nursing;
3. High wages in male-dominated occupations such as mining and construction, which are major players in Wyoming’s economy.

In 2004, the Wyoming Legislature enacted a sales and use tax exemption for purchases of manufacturing equipment. Wyoming’s manufacturing sector is relatively small, and economic development proponents argued that a tax exemption similar to ones offered in other states would give Wyoming “another tool in the toolbox” to attract manufacturers to our state.

The Equality State Policy Center opposed the tax exemption, arguing in turn that tax exemptions do not drive location decisions, and that other states’ tax structures enable them to potentially recoup revenues lost from a sales tax exemption.

For example, in a state with personal and corporate income taxes, there is the possibility of replacing the revenues lost from a sales tax exemption on manufacturing equipment – if indeed the exemption attracts a manufacturer – because the company and employees will then pay income taxes.

Wyoming could recoup lost revenues only from property and sales taxes paid by the manufacturing company and its employees, which might or might not make up the difference.

In addition, some other states have enacted “clawbacks,” where state tax exemptions or other incentives are stopped and even recovered from businesses which fail to produce promised jobs and tax revenues.

Although the ESPC was not successful in stopping the exemption for purchases of manufacturing equipment, we successfully advocated for an amendment requiring reporting on the results of the tax exemption. And because gender wage gap was very much on everyone’s minds at the time, the reporting requirements included reporting wages paid to men and to women.

The reporting proved problematic as a first-time effort, since there were no baseline data to compare to, and there was no structure in place to identify manufacturers who might avail themselves of the tax exemption. However, the Department of Revenue worked diligently and began producing reports that showed wages paid to men and women (full- and part-time), and benefits offered to employees in the manufacturing sector.

The ESPC recently compiled all the reports and the results were rather interesting (see spreadsheet here of the last two years, which have comparable data).

The shaded boxes show where there are significant wage gaps between men and women in the same broad job category within the manufacturing sector.

Caveat: these data are compiled from employer surveys, and the employers chose individually how to list their data in the six categories offered by the Department of Revenue. The data are not tied to national manufacturing codes and unfortunately cannot be compared to regional or national data on manufacturing wages.

Nevertheless, the data do raise red flags that beg further investigation. For example, when 423 full-time female employees in the administrative/clerical category in FY 2008 earn, on average, nearly $7/hour less than 157 male employees in the same category, it stretches the imagination to believe that all 423 of those females are that much less qualified than the 157 males to justify making 70% of the males’ wages.

Approximately $32 million in revenues have been lost due to the tax exemption for purchases of manufacturing equipment (through FY 2008). The tax exemption is set to expire at the end of 2010, and several business organizations are lobbying to extend it. We at the ESPC think some questions need to be answered first.

Next:
Part IV, The Jobs Budget