December 26, 2021
through mike koshrl, WyoFile
A legislative committee has resurrected a repeatedly failed real estate transfer tax, a levy that supporters say could help turn the corner on a labor housing crisis that is fraying the community fabric of the locality. the most expensive in Wyoming.
The idea behind the optional 1% county tax, which has been repeatedly introduced by Teton County delegates, is to assess a sales tax on real estate transactions above a certain threshold. In its current form, the bill deferred by the Wyoming Legislature’s Joint Committee on Revenue could generate perhaps $20 million a year for subsidized, restricted-deed housing or other community needs, estimated Rep. Mike Yin (D-Jackson).
“It could do a lot, it could really do a lot,” Yin said.
Real estate sales in Teton County are expected to top $3 billion in 2021, roughly doubling taxable retail sales in the teeming tourist community.
“Real estate is to Teton County what coal is to Campbell County, except we can sell it over and over and for a higher price each time,” the lobbyist for the Association of Municipalities of Wyoming, Bob McLaurin, testifying in favor of the bill.
The proposed tax structure would allow counties to exempt up to the first $1.5 million from any real estate transaction. So if a home sold for $3 million, only half of that total could be taxed at the 1% levy if the county were to find the full exempt amount. But the proposed legislation also allows counties to set the threshold lower, making the tax a viable option for counties where home prices aren’t so exorbitant.
Counties could pursue the optional tax if half of incorporated municipalities and county commissioners agree to it, or if 5% of the electorate requests it. If that happened, the property tax would be imposed on voters in the county. How the funds would be used would be spelled out on the ballot “in a clear and appropriate manner”, according to the bill.
People whose jobs involve housing Jackson Hole’s workforce say the cash injection that a property tax could bring in could eclipse the public funds currently dedicated to the cause. Over the past five years, the Teton County government has invested $37 million in public funds in housing, an investment that has resulted in 241 new units and leveraged about $100 million in additional private capital, according to April. Norton, Jackson/Teton County Housing Director.
“That’s about all we can do, because we don’t have a funding source,” Norton said. “We are constantly reviewing potential new projects, and our main limitation is funding. We have four [affordable housing projects] ahead of us right now, but we can’t afford four. We may be able to afford one.
In the meantime, hourly workers and salaried professionals who provide Jackson Hole’s most basic services are increasingly being billed out of where they work. It’s been a problem for decades, and it’s been exacerbated by an aging workforce that’s retiring, cashing in on their high-priced homes and leaving. Wealthy newcomers with jobs independent of location often take their place.
“We are losing our employees,” Anna Olson, president and CEO of the Jackson Hole Chamber of Commerce, told members of the revenue committee. “My number one issue for employers is the lack of employee housing here, and it is getting worse by the day.”
Olson urged committee members to advance the proposed tax so that it could be considered during the February budget session of the Legislative Assembly, and they did. The committee advanced the 18-page bill Dec. 15 by an 8-4 vote. A year ago, the Legislature’s Joint Committee on Revenues scrapped a 0.5 percent property tax at the statewide 7 to 6. More than half of the members of this committee changed, but there was also one vote that changed: Rep. Tim Hallinan (R-Gillette).
Hallinan was swayed by a new provision in the bill that sweetens the pot for the state of Wyoming, he told WyoFile. Specifically, distributions from the Office of State Lands and Investments to local governments exercising the property tax would be reduced by 50% – and those funds would be transferred to the general fund.
Hallinan also isn’t sure he’ll vote for the property tax bill once the full House meets in February, he said. Since this is a budget session, bills require a two-thirds majority support to be considered in this chamber.
Two-thirds support is a “high bar” in Wyoming’s fiscally averse Legislature, said Rep. Andy Schwartz (D-Jackson), which has repeatedly introduced a real estate transfer tax without committee support.
This article was originally published by WyoFile and is republished here with permission. WyoFile is an independent, nonprofit news organization focused on the people, places, and politics of Wyoming.