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.