Freudenthal: Reconsider property tax relief for seniors

(Wyoming Democratic Party)

$3 Million for Exxon, but what relief for Grandma?

By GOV. DAVE FREUDENTHAL

A remarkable thing happened during the most recent meeting of the Legislature's Interim Revenue Committee.

The committee decided it didn't want to offer property tax relief to seniors in the form of a bill sponsored by Rep. Debbie Hammons, D-Worland, and a bipartisan group of House and Senate cosponsors.

At the same time, the committee chose not to sponsor a bill related to the taxation of helium, an extremely valuable gas produced in huge quantities here in Wyoming. All the bill would have done was to re-establish helium as subject to the same taxation as natural gas.
Seems only fair to tax everyone the same.

The net effect of those two decisions: Exxon avoids an estimated $3 million a year in taxes, and folks over 65 receive no meaningful property tax relief as a result of the committee's decision to punt on both of the bills.

I am taken aback by the irony inherent in the committee's decision.

I do not fault Exxon, or their lobbyists. Properly run corporations work to increase their profits, not their taxes. Exxon makes out just fine with a year or more of delay. But the Wyoming citizens (shareholders) are left to simply watch a valuable mineral product leave our state untaxed.

Many of our state's older residents are struggling to pay their bills. Property taxes, which go up as home values escalate, are frequently cited as being of particular concern to seniors, many of whom are on fixed incomes and do not have the option of returning to the workforce.

I was stunned to hear one of the committee members quoted as saying that this is the wealthiest generation in American history, and that this group does not need tax relief.

While it may be true that some senior citizens have amassed wealth in their lifetimes, much of it is invested in their homes. And according to the State Board of Equalization, the average appraised value for homes in Wyoming has grown by leaps and bounds in the last decade. In Sheridan County, the average value has risen 114 percent since 2000. In the same time period, Laramie County's values rose 62 percent, and Natrona County's crept up 103 percent.

These increases translate into property tax levels that many of these residents wouldn't have dreamed of when they bought their homes decades ago.

The legislation is modeled after a proposal I made late in 2007 - a constitutional amendment that would allow the legislature to lower property taxes for people over 65 who have lived in their homes for 10 years. The proposal is targeted in this fashion to keep the cost to the state down, while still providing significant relief to the seniors who can use the help.

A senior whose home is valued at $200,000 would pay property taxes on only $100,000, resulting in a savings of about $638 per year. No more than $100,000 of fair market value would be exempted, no matter how much the home might be worth. In other words, a couple 65 or older living in a $200,000 home would get the maximum relief allowed, if the Legislature chose to implement the program after the constitutional amendment is passed by the voters in November of 2008.

The Board of Equalization, which helped develop this proposal, estimates the program would cost the state between $15 and $18 million a year. To protect Wyoming's local governments from losing this revenue, the constitutional amendment would require the Legislature to reimburse them.

This is certainly no windfall for seniors, but it is a significant savings of several hundred dollars a year.

I suppose $3 million is no windfall for Exxon, but the company should be required to pay taxes on an immensely valuable product which is now leaving Wyoming without being assessed the taxes which the constitution requires us to impose.

I am encouraged that several legislators, on a bi-partisan basis, will offer these proposals to the full Legislature. But the proposals must get a two-thirds vote for introduction, and then will be heard by the very committee that rejected them.

A break for Exxon and no real break for Wyoming's seniors leaves me wondering whether the members of the Revenue Committee shouldn't take another look at their action - or inaction.

- Dave Freudenthal is the Governor of Wyoming.