SWEETWATER COUNTY – A property tax movement may ultimately cut the taxes paid by property owners but would also impact funding to education and other local services traditionally funded by those property taxes.

Appearing on “Let’s Talk” Monday morning with Al Harris, Sweetwater County Assessor Dave Divis said The People’s Initiative to Reduce Property Taxes Through Homeowner’s Exemption aims to exempt a person’s residential property tax by 50%.

A ballot initiative was recently certified by Secretary of State Chuck Gray and now boosters for the initiative need to receive 29,730 signatures from across Wyoming to have the initiative placed on the 2024 ballot.

Divis said the idea stems from when people were forced to work from home during the COVID-19 pandemic. People living in areas with a high cost of living started looking at the western United States as an attractive place to live because they were no longer required to physically go to their jobs.

“When they (moved), the property they were selling was much more valuable than what they were buying,” Divis said. “They were just writing a check.”

This resulted in a market where people could ask for almost anything for a property and receive it. Divis said with assessing those properties, a couple outliers wouldn’t impact properties in an area, but when 15 or 20 sales happen like that, the entire market is pushed up. He said people didn’t care when it happened in Teton County, but other counties started seeing sudden increases in property values, which have caused sudden increases in the property taxes people owed.

Divis said Sweetwater County had the lowest growth in property valuation increase in Wyoming during fiscal year 2022-2023 at 8.5%, though that is still a significant gain compared to fiscal year 2019, where property valuations grew by 2.8% from the prior fiscal year. Still, property values in Sweetwater County have grown more than 21% overall since 2019. In Lincoln County, the growth is much more pronounced, with the valuation increasing by 11.8% in 2019, but had a 35% growth during fiscal year 2022 and 28% during the past fiscal year. Divis believes the Sweetwater County’s mineral extraction-based industry is the reason why large growths in property valuation didn’t occur as most of the jobs available require a physical presence at the job site.

Divis believes there are better options to deal with high property taxes. Divis said the main issue he has with the proposal is there isn’t a need requirement, and it would exempt taxes by 50% across the board. Additionally, people only need to live on the property for one year and live there six months out of the year. There also isn’t a mechanism where counties are made whole by state as part of proposal. Other exemption programs allow the counties to receive state funds to cover property taxes that are exempt. Finally, the initiative benefits people with more expensive properties as higher the property values would result in larger tax exemptions, a situation Divis believes doesn’t help those who would truly need the exemption.

Divis said if the proposal does pass, the county could survive because much of the county’s valuation is tied to minerals and industry, but it would see funding cuts. However, there are some smaller counties, such as Niobrara County, that would be severely handicapped as they don’t have the same industrial support Sweetwater County does. A common misconception he cites proponents of the proposal have about property tax is the idea that property taxes go to the state, which Divis said they do not.

“None of your local property tax money goes to the state,” Divis said. “Not one dime.”

There is one exception to that rule, Divis said – education funding that goes to the state and is redistributed based on school districts’ student population. Most of the property tax mill levies paid within Sweetwater County go to education funding. Of $200 million billed out in Sweetwater County, Divis said $132 million was distributed to education.

Beyond education however, other services would take a hit through the initiative, including many county-provided services. Organizations like the Sweetwater County Library System, Sweetwater County Sheriff’s Office, and special districts such as Castle Rock Hospital District would immediately be impacted as well.

While there is a lot of misinformation being spread, Divis said the root issue is people are mad at how their taxes are being spent. Divis said people need to be aware that services they rely on may get cut back if the initiative eventually passes and a mechanism to backfill the lost funding isn’t provided by the legislature.

Divis said he is scared about what may happen during the legislature’s budget session in February. His concern stems from legislators possibly moving too quickly to address the issue without properly thinking about how a tax exemption initiative could impact local governments down the line.