Who makes up the difference if Wyomingites pays less property taxes?

Wyoming, as a state, is very reliant on taxes paid by the minerals industry, she said, and many of the bills under consideration only offer relief for residential property owners. Commercial properties, although those are often owned by Wyoming residents, aren’t included in many of the bills left in play.

“Rising assessments are a problem,” she said. “But it is very complicated … a statewide sweep (would not work).”

Property taxes are one of the primary sources of funds for local governments, including cities, towns, counties, school districts and special agencies such as water and sewer districts, according to the Wyoming Department of Revenue. So, any reduction in what homeowners in Wyoming pay would likely have an impact on those services.

That has left lawmakers to debate a “backfill” option, or a mechanism for making up lost revenue.

Three bills of the more than a dozen still alive listed a backfill from the state’s general fund of between $200,000 and $88 million, depending on the relief those bills offered. One, Senate File 121, “Property tax-homeowner’s exemption,” would transfer its backfill from the Legislative Stabilization Reserve Account, or the state’s “rainy-day” savings account.

“The backfill is important, if they are going to make these massive decisions,” Harpstreith said.

Brenda Henson, director of the Wyoming Department of Revenue, spoke in front of the House Appropriations Committee on Thursday, explaining the fiscal impact of several property tax bills still in flux. House Bill 103, “Property tax-assessment ratio for residential property,” would decrease the level of assessment on residential property to 8.3%.

The estimated decreases in property tax revenues, if HB 103 passes, from the statewide 12-mill levy to the School Foundation Program and to other local taxing entities, would be $41.7 million in FY 2026 and $42.9 million in FY 2027. In total, that bill could necessitate an $87 million allocation from the state’s general fund to make up for the reduction in revenue.

Similarly, House Bill 52, “Property tax-homestead exemption,” would exempt a portion of residential real property used as a primary residence, including up to one acre of land. That bill would require an estimated $123.4 million to reimburse local governments for lost revenue resulting from the exemption created by the bill.

Other bills contained no backfill mechanism at all.

Rep. Tom Walters, R-Casper, and Rep. Clark Stith, R-Rock Springs, both noted Thursday the challenge of balancing relief with lost tax revenue. When discussing HB 52, Walters proposed removing the backfill option altogether.

“If we are going to have these exemptions, people need to recognize what these exemptions cost,” Walters said.

Stith said that he understood, and later in the meeting even proposed a similar approach with a different bill, HB 103.

“The original intent of the bill was to cut taxes (that go to) school districts,” Stith said.

Although not discussed in the Appropriations Committee on Thursday, Harpstreith said she is concerned about House Bill 203, “Property tax reduction and replacement act.” It would establish a property tax exemption for single-family residential properties, but would impose an additional sales tax of 2% to make up lost revenue. It is co-sponsored by Rep. Steve Harshman, R-Casper.

Nothing in the bill offers commercial property owners relief, Harpstreith said, and a 2% sales tax increase from four cents on the dollar to six cents would also hit business owners hard.

“When you’re looking at a mining company that has to buy five haul trucks, and those are $7 million apiece, well, do the math — $35 million and an extra 2% sales tax on that,” she said.

HB 203 would also affect local sales taxes Wyoming communities have long been able to vote on for themselves. State law currently allows counties, in cooperation with cities and towns, to fund specific projects through a voluntary sales tax. But under HB 203, those two pennies would be automatically assessed to make up lost property taxes.

“That’s going to be hard for local communities to make up. They’re going to get hit on property taxes, and then have the pennies taken away,” Harpstreith said.