State funding analysis will affect town, county

by Alecia Warren

The State Legislature recently began a two-year process of analyzing how much revenue local governments require for running their communities, a study that will likely result in legislation affecting funding allocated to Sublette County and the Town of Pinedale.

But members of the Select Committee on Local Government Finance insist that despite initial fears voiced by locals, the committee will not necessarily pursue equalizing mineral wealth across the state, and will continue investigating all possible means of redistributing state resources to provide every community with adequate municipal resources.

The committee hopes its current research will point to a solution for the debate within the State Legislature over annual distribution of state funds to local communities, which has grown more convoluted over recent years as mineral-wealthy counties have experienced increasing benefits while poorer counties struggled to cover basic needs.

“It has been very difficult (to distribute funds),” said Steven Sommers, fiscal manager of the Legislative Service Office (LSO) for the past 19 years. “The cities and towns have a certain expectation and I think a lot of legislators have another expectation. Part of it is complicated by the fact that the Legislature doesn’t have a good grasp on how the locals actually spend their money and what their needs are.”

The committee has been assigned with the duty of breaking down local government costs and producing a bill for a new funding distribution model by 2009, the two-year span specified because funding models are difficult to amend once created and should be approached with caution, said the committee chairman Roy Cohee.

“There’s a high level of inconsistency across the state, based on where mineral lies and where it doesn’t,” Cohee said. “One day the state is going to be out of mineral wealth, and we have the opportunity now to build local governments we need to be there when the next economies will be in Wyoming.

“We need to be making attractive, responsible communities for people to be proud to look at and say, ‘I’m educated, and I want to stay here and have a business in Wyoming.’ We want communities to be that attractive, and we can’t do it without proper funding.”

Some communities interpreted the committee’s intent as equalizing revenue for towns and counties across the state by requiring mineral-wealthy communities like Sublette County to turn over excess tax revenue from mineral development to the state for redistribution to less-stable counties, as done with public school financing last November. “I’m sure the majority of legislators would be in favor of it, because the majority of the state isn’t impacted as heavily (by development) as we are,” said socioeconomic analyst Jeffrey Jacquet. “They’ll want to get as much money out of this thing as they can.”

What the equalization model doesn’t account for, however, is the additional funding mineral-rich communities need for accommodating development impacts, like increased traffic, crime and population.

Already the Town of Pinedale, which itself doesn’t receive much money from the oil and gas bonanza on the Jonah Field and Pinedale Anticline, has repeatedly depended on the county’s generosity with its increased revenue from property taxes to cover basic infrastructure needs.

“(Losing excess tax revenue) would have a huge impact,” Jacquet said. “If you look at county services such as the Meth Task Force, the Class II Road Funding Proposal — the county and the local governments have increased staff by 75 percent in the last five or six years, and all those things are being done to help mitigate direct impacts from oil and gas. I think the level of acceptance toward devlopment might change if (locals) stop seeing such a direct benefit from it.” County Commissioner Joel Bousman said the commissioners intend to make these points by including themselves in the committee’s research.

The county recently hired Ecosystem Research Group, a Montana consulting firm, to provide hard numbers on projected impact costs for Sublette County over the next decade. The commissioners expect to have the analysis prepared before the next legislative session, and will pay committee members a visit to provide some “serious education” on local municipal needs, he said. “The first priority for that money is to address impacts in the area it came from,” Bousman said.

The commissioners will also voice their concerns at a Cheyenne meeting between state legislators and state counties on Nov. 15 to discuss legislative issues, and plan to communicate with commissioners of other mineral-wealthy counties as more information becomes available on the select committee’s decisions.

“I don’t think each county can have much impact alone, but if we all get together, wherever we have commonality, we need to use that,” he said.

But Cohee said concerns about equalization are dramatically premature. “I doubt we’ll see any attempt to remove money from one community to give to another,” he said.

Instead, the committee is examining every source of revenue, from sales to severance to property taxes that could possibly be rearranged. At its second meeting over Oct. 11 and 12, the committee compiled information from various federal agencies as well as the Wyoming Association of Municipalities (WAM), Wyoming County Commissioner's Association (WCCA) and the LSO staff, and asked them to provide additional information for the committee’s next meeting in February after the Legislature’s budget session opens, including a list of consultants to calculate local government funding costs, and existing studies showing the cost for counties and municipalities to provide basic services.

The primary goal for now is simply to establish how much money individual towns and counties need to meet fundamental health and safety services and find a way to provide state funding to meet those needs.

“There are ways to do it without in essence taking things away from Sublette County,” said committee member Debbie Hammons. “Right now under the state distribution formula, 69 percent of sales tax goes to the state and 31 to local governments. We could just have a greater portion go to local governments and less go to the state, and we wouldn’t be taking things away from a specific county.”

The committee might also look at ways of giving local governments the ability to make incremental increases in sales or property taxes.

Hammons explained the need for redistributing state funds using the example of her own home in Washakie County, which holds roughly the same 7,000 people as Sublette County. Both counties are trying to manage the same government responsibilities, she said, only Washakie has an assessed property tax evaluation of $117 million, and Sublette County $4.4 billion.

“It’s not that we want to take things away from counties with wealth,” Hammons said. “Just is there a different way for the state to distribute what it has so policemen in my town don’t have to work in shifts of 60 hours?”