LCCC Study Says Wyoming Could Afford Higher Taxes
A Laramie County Community College study presented to a Wyoming Legislative Committee last week says the state could afford higher taxes without damaging the state economy.
It was presented to the legislature’s Joint Revenue Committee on Monday. it comes as the state faces long-term budget challenges that include a roughly $300 million per year shortfall in school funding. While federal COVID-19 stimulus money will more or less bail out the state, for now, it’s not a long-term solution.
The study said Wyoming could increase state revenues by about $800 million per year without hurting the state’s economy. It says that the easiest path for doing so without creating a state income tax (which is highly controversial in Wyoming) would be to increase sales taxes.
In the words of the study:
Wyoming rates fall below the median, mean, and maximum rates of the surrounding states. Excluding income taxes (which would necessitate the creation of new taxes in Wyoming), the greatest capacity exists within the sales tax rates, with Wyoming trailing the comparison group median by 1.4 percentage points, and the average by 0.4 percentage points. Fuel tax capacity is approximately six cents ($.06) when compared to the median rate of the comparison group.
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When comparing Wyoming tax rates to those of other state’s with no state income tax, the study found Wyoming taxes to be significantly lower:
”Again, excluding consideration of income taxes, the greatest capacity of the various taxes within this comparison exists in the sales tax rate. Wyoming currently falls 2.8 percentage points below the median rate of the no income tax states comparison group. When compared to the average sales tax rate of this comparison group, Wyoming shows an approximate 2.6 percentage points of capacity.
For this comparative analysis group, greater capacity exists within two of the three property (Ad Valorem) tax rates than within the surrounding states analysis. These include residential property taxes (capacity at the median to increase 0.7 percentage points for residential) and commercial property taxes (capacity at the median to increase 0.6 percentage points). Industrial property tax capacity is the lowest and similar to that of the surrounding states comparison group (approximately 0.2 percentage points).”Click here to view photo gallery