Local Officials Warn Wyoming Property Tax Plan Could Gut Services, Push Sales Tax to 8%

The original story by Alyssa Tolman for Wyoming Tribune Eagle.

Laramie County leaders say a proposal at the Wyoming Legislature to wipe out residential property taxes might sound great on paper — but on the ground, it could blow a massive hole in local budgets and make it harder to fund everything from schools to snowplows.

At issue are two bills advanced by the Legislature’s Joint Revenue Committee on Nov. 19:

1. Eliminate residential property taxes for Wyoming homeowners;
2. Raise the state sales tax by 2% to make up for the lost revenue.

Both ideas drew heavy criticism at the meeting, but still moved forward.

For Laramie County alone, officials estimate the change would mean almost $62 million less in tax revenue every year.

“Complete game changer,” is how Laramie County Commission Chairman Gunnar Malm put it — and not in a good way.

According to 2025 figures from the Laramie County Assessor’s Office, property taxes are a major lifeline for local schools.

• Nearly $87 million in property taxes goes to Laramie County School Districts 1 and 2;
• Of that, just under $30 million comes from residential property taxes.

Pull that piece out, and school funding takes a serious hit.

The City of Cheyenne would also be staring at a big shortfall: roughly $4.5 million gone from its $9.5 million in total property tax revenue.

Mayor Patrick Collins said the city is already struggling to keep services in step with growth.

“As the city has grown with the new business parks and all the things that we’ve done, we haven’t been able to keep up with police officers, the firefighters, the snowplow drivers — those types of things that we should be doing,” Collins said.

He added that even as new development comes online and helps rebuild some of that lost revenue, it won’t be enough to keep pace with what residents expect.

“It’s not going to allow us to be able to keep up with what we need to do, which is provide for public safety, our roads, that type of thing,” he said.

Surprisingly, Collins said he’s less worried about the property tax elimination itself than he is about the proposed 2% jump in the state sales tax to replace it.

Right now, Cheyenne leans heavily on local sales taxes to make things work:

• The fifth-penny sales tax provides about 80% of the city’s road repair money, and helps pay for police cars, fire engines, and parks equipment.
• The sixth-penny sales tax is how the community pays for big-ticket projects like jails, libraries, bridges and roads.

If the state rate goes up by 2%, those local options get a lot harder to sell to voters.

“That’ll become a seventh penny,” Collins said of the fifth-penny tax. “Our voters have been so supportive of Laramie County, of Cheyenne, of Pine Bluffs, Albin, Burns, of approving these projects. It’s going to be harder when it becomes 7%.”

Add the sixth penny on top of that, and you’re asking voters to go from 6% to 8% at the register.

“That is really going to be a hard pill for the voters to swallow,” Collins said. “So I think, while (the Legislature) is going to hurt us with the property tax (elimination), their remedy for that is going to be just as bad. Actually, I would tell you it’s worse.”

Laramie County Assessor Todd Ernst said even if the 2% sales tax hike plugs some of the gap, he’s worried it won’t cover everything — and could push people to shop outside the county or even out of state.

“I’d be concerned if it got too high that all the neighboring counties to different states, (Laramie County residents) might be shopping those instead of staying local,” Ernst said.

He pointed out that:

• Montana has no sales tax;
• South Dakota’s is around 4%;
• Places like Loveland, Colorado are already around 7.5%.

If Wyoming’s statewide rate climbs and local voters keep their extra pennies in place, some residents might decide it’s cheaper to fill carts somewhere else.

Ernst also warned that local leaders could soon be making some brutal decisions about what stays funded and what gets cut.

“I’m assuming with the cuts, (the commissioners would) have to look and see what services are the most important, and then start going down the list and say, ‘OK, we really need to fund these,'” he said. “We only have so much money, so (they’d need to decide) where the funding would go.”

Commission Chairman Malm said the proposed $62 million annual loss would directly undercut the county’s ability to provide the services that the state itself requires.

He also noted that the sales tax hike wouldn’t hit every community the same way.

Laramie County voters have repeatedly chosen to approve extra local sales taxes — the fifth and sixth pennies — to fund community projects. That means they’d feel an extra statewide 2% more than places that never passed local options.

“Communities like Park County, who have never had additional sales taxes, would see little to no impact to their communities,” Malm said. “But here in Laramie County, voters would be hard-pressed to add an additional two pennies to do some of the things that we do.”

Both Collins and Malm say they don’t yet know how the city and county would fully recover if both measures pass.

If lawmakers ultimately approve the bills, Malm said commissioners will have to crunch the new revenue numbers and then likely start making deep cuts while building the next budget.

Collins plans to show up in person when the Legislature takes up the two proposals.

“If you live in Cheyenne, you want Cheyenne to thrive, not just survive,” he said. “And I’m not even sure how we would survive, honestly. I’d hope (the legislators) would start to understand how critical these funds are to our ability to do the job that they want us to do.”