Volume 3, Number 33 - November 13, 2003
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County Commission talks taxes
Sublette County Commissioners met with their legislative representatives Monday in Pinedale to discuss the next legislative session and what the commission would like to see accomplished.
Attending were House District 22 Representative Monte Olsen of Daniel, District 20 Representative Stan Cooper of Kemmerer, District 14 Senator Larry Caller of Rock Springs and District 16 Senator Delaine Roberts of Etna.
High on the county's list of concerns is its right to appeal mineral tax valuations, said Commissioner Bill Cramer. He told the legislators that the Wyoming Supreme Court has ruled that the only time a county can appeal a tax valuation is when an audit is performed.
"Unless there is an audit performed, we're out in the cold," Cramer said.
Cramer maintained that once the Department of Revenue issues a tax notice, the county should have a 30-day appeal period.
Commissioner Betty Fear said the county does need to have the right to appeal, adding that the last state administration fought vigorously against having counties granted the right.
Cramer noted that another significant issue is that counties need to be granted "standing" to take mineral valuations to the supreme court.
Cramer explained that when a mineral taxation audit is performed, if industry loses and county wins, industry can appeal the decision to the state's highest court. But if the mineral company wins and the county loses, the county has no standing to appeal that decision. The problem comes from the supreme court's interpretation of state law granting "persons" the right to appeal, Cramer said, noting that the court has determined counties are not "persons."
"So we are treated differently and are at a huge disadvantage," Cramer said, suggesting that the legislature needs to clean up the language of the statute.
Fear agreed, stating, "The county should have the same rights of standing as a person does." She explained that the way it stands now, even if the county knows there is a big flaw in the valuation, "we're stuck with that amount of taxes."
Cramer cited the county's settlement with Wexpro, which resulted in the county receiving a settlement from that company of more than $600,000. Cramer said in that case, Wexpro and Chevron were producing gas from the same well, but DOR allowed Wexpro to value their gas at less than half of what Chevron valued the same gas. Sublette County Assessor Janet Montgomery raised the issue, Cramer said, and Wexpro quickly agreed to settle.
Fear said, "We got our money," adding that the state should have received an equal amount of severance taxes, but refused to pursue it.
"The state just gave it away," she said.
Cooper questioned whether allowing the counties to have the right to appeal is in accordance with state constitution which provides that the state is the only one that has the right to value minerals.
Cramer responded that the state would still be valuing those minerals. If a county were to win a tax appeal, the DOR would simply be ordered to re-value the mineral production.
Caller confirmed the county's position: "You don't want to value the minerals, you want to be able to appeal the valuation."
Cramer said with the change of administration in Cheyenne, he expects a better reception to the county's position. He maintained that the former DOR director hated Sublette County.
Commission Chairman Gordon Johnston said he's often wondered how other counties were making out with the state at that time when Sublette County had such a struggle.
"The thing that really bothered us, me anyway, was the fact that the state blindsided us, stonewalled us - us, Sublette County," Johnston said. "It was almost like it was a personal thing with Sublette County, at least it seemed that way to me."
"It's a whole different ballgame now," Cramer said, with Dave Freudenthal in the governor's office.
Caller said he's familiar with the mineral tax issue from his dealing in Sweetwater County. He noted that mineral companies pay taxes essentially on the honor system.
"I don't have much sympathy for oil and gas companies," Caller said. "They've been in the driver's seat for too long."
Caller pointed out that the county was not asking for additional taxes: "You're just asking for them to pay what they owe."
Olsen said he has spoken with industry representatives about the issue and they pose the question: "We only need to serve one master. Is it going to be the state or is it going to be the counties?"
Fear responded, "It's the state."
Roberts suggested that getting anything accomplished in the legislature would "be mighty tough, with just Sublette County pushing this," but Fear assured the legislators that other counties would show support as well.
Caller suggested that once a bill is filed, the commissioners need to attend the committee hearings, along all the legislators from that area.
Roberts agreed that if all four legislators appeared before the committee, that would be more effective in influencing the committee.
Cramer asked the legislators to consider a second issue: tax relief for county homeowners.
"We are one of the richest counties in the state," Cramer said, because of mineral resources, but the county is experiencing big impacts from increased residential property taxes.
Cramer explained that as a county commissioner, he's committed to taxing the full 12 mills allowable under state statute. He said doing so allows the county to reap the benefits from mineral taxation: "When the gas is gone, it's gone. We can only tax once."
But the downside is that homeowners are also taxed the full 12 mills.
Cramer noted that there is a homestead exemption still on the books, "Why can't Sublette County rebate to homeowners for their primary residence? ... Let the county fund it, if the state won't."
Cramer pushed for legislation that would allow counties the option of funding the homestead exemption to provide tax relief to primary residence owners in Sublette County.
"Just as you can have a special taxing district, have a special un-taxing district" at the local level, Cramer said. "Make it a county-optional thing."
Johnston explained that the commission has examined reducing the tax on residential property owners, but that presents a problem and a huge cost. He cited "the money that it would cost to lower the mill levy" in lost mineral taxes, would exceed tax relief for residential owners.
Johnston noted that residences are taxed at 9.5 percent of the assessed value, but minerals are taxed on 100 percent of production.
Johnston said that lowering the mill levy to help homeowners would help the homeowner, but the mineral companies would experience tax relief, resulting in huge tax losses.
Johnston said reducing the homeowner's tax would help the homeowner, "but it's going to cost us millions."
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