Sheridan County May Drop Tax Deferral That Only 2 Have Signed Up For In A Decade

As Wyoming’s House Freedom Caucus continues to act as one of the most vocal proponents of property tax cuts on behalf of what it sees as a weary tax base, relief programs may provide the assistance Wyomingites seek.

But, one Sheridan County official told Cowboy State Daily on Tuesday that relatively few people are using those programs.

After rallying to pass a 25% cut earlier this year, the Freedom Caucus is now aiming for additional relief, as high as 50%. Caucus Chair Rep. Rachel Rodriguez-Williams, R-Cody, told Cowboy State Daily last week the cuts are needed given the high tax rates that often see Wyomingites struggling to make ends meet.

"There’s a reason the... property tax cut passed with veto-proof majorities in both chambers,” she wrote via email. “After years of double-, and sometimes triple-digit increases in property tax bills, the people of Wyoming have had enough.” 

“The people have had to tighten their belts to write their property tax checks; it’s time government — at all levels — learn to operate on a tighter budget,” the representative added. “Most Wyoming politicians claim to be fiscal conservatives. It’s time they walk the walk." 

Property taxes, however, are an important source of revenue for local and county governments, forcing multiple jurisdictions to make difficult decisions about which critical services to keep when budgets get tight. This has already manifested itself in places like Hot Springs County, where county commissioners said they had to make reductions to emergency services this year.

Several local leaders are already sounding the alarm that the proposed 50% cut could prove detrimental to local budgets and could endanger even more services.

State Sen. Cale Case, R- Lander, told Cowboy State Daily that one easy compromise could be property tax relief programs.

The 'Weird' Program

Sheridan County Administrative Director Cameron Duff told Cowboy State Daily that the county is considering doing away with its property tax deferral program because it has hardly been used since it was created in 2008.

That program, he said, allows residents to defer up to 50% of their property tax costs in exchange for an accruing interest charge on the unpaid taxes. He argued this interest may represent a prohibitive cost to taxpayers.

“We’ll get inquiries, but no one ever accepts the program because they don’t want to pay interest to the county,” he said. “Over this last decade or more, we’ve only had two people really go for the program and they paid it off really quickly.”

The inability for Sheridan County’s deferral program to completely erase some or all of an individual’s tax burden, Duff said, is the key shortcoming in the program. He also suggested involvement by local government, rather than a private bank, further dissuades some taxpayers.

“It’s a weird program, and I’m saying the ‘weird’ word on purpose, because it is designed to help the person and they still have to pay interest,” he added. “As soon as they hear ‘oh, it’s not totally wiped out, it’s not a true exemption …’ that’s when they say no.”

“That’s why it’s failing, the fact that there’s an interest charge,” he added.

Duff acknowledged another flaw with the program is how it only applies to residential properties and does not assist business owners. He suggested adding relief for business owners could make a deferral program much more accessible. 

When considering other options to provide property tax relief, Duff suggested that increasing state sales tax could ease the burden while helping local jurisdictions remain afloat.

“If you choose not to spend anything, you don’t pay a tax,” Duff said. “I’m not sure sales tax is the perfect solution, but I know they’ve discussed that, going up a couple more pennies to make up the difference.”

Duff acknowledged the current property tax environment in Wyoming leaves people on both sides of the issue dissatisfied, and said this could indicate the 25% cut was rushed through the legislature. Taxpayers, he said, still must pay taxes as their home valuation goes up, regardless of the cuts.

“It didn’t really stop the increase in value of your home,” Duff said. “It really didn’t pan out the way everyone was thinking in their heads.”

“I don’t know how to address that and what it is people are looking for as the perfect solution,” he added.

Property Tax Relief

Case said he regularly hears from local advocacy groups who repeatedly demand the legislature take action to confront the high cost of property taxes.

“I get emails every day from people who say ‘eliminate property taxes,’” he told Cowboy State Daily via phone. “Emails come in saying ‘repeal property taxes, take them to zero, get rid of them.’ This is where people’s mindset is.”

Only two Wyoming counties, Teton and Sheridan, currently offer some form of property tax deferrals to their residents.

Teton County offers a deferral program, which allows taxpayers to extend the deadline to pay their taxes while accruing interest. Sheridan County offers its residents deferrals and exemptions, or partial refunds for qualifying individuals that are available upon request.

Case had previously partnered with state Rep. Mike Yin, D-Jackson, to sponsor a measure which would make private banks, rather than the state government, responsible for providing relief services. He said he still believes this could be a potential solution to the state’s current property tax struggles.

“All the time, people get second mortgages on their houses, you know, and they deal privately in banks and things like that all the time,” he said. “We came up with a bill for that. And I think, actually, that's a really good idea, because the truth is, the tax burdens that that you owe are modest in comparison to the value that your (home increased).”

Tax relief programs, he suggested, could be a solution that helps taxpayers and local governments get along.

“And so I'll kind of stand on that, but I think that is a better solution, perhaps, than depriving local governments of needed revenues and uncertain times ahead by granting tax relief and tax relief that really benefits everyone, regardless of their ability to pay,” Case said. 

Any Takers?

Case explained that despite the impact these programs could have on taxpayers, there is little demand for them in the state. This, he asserted, could be due to pride or embarrassment from individuals who do not want to admit to the government they require assistance.

“The concept is that you know you owe taxes and you can't maybe afford your taxes right now,” he said. “The trouble is, people don't want to use that program, and I think it's because they don't want to go down and basically tell the government that they can't pay their taxes, and then go through the paperwork and have the approval by the government of this.”

Jackson Walker can be reached at walker@cowboystatedaily.com.