Wyoming Liberty Group
State revenues are declining dramatically and are expected to continue to decline. That means big ticket items, even crucial ones like K-12 education, must feel the pinch. No one wants the quality of education in Wyoming to drop, but the spending on it must decrease. Why? The Consensus Revenue Estimating Group (CREG) projected in January that total minerals distributions in the five-year period 2016-2020 would be 29 percent or some $2.6 billion less than in the five years 2011-15. That will require real efficiencies and they can only be found where real dollars are being spent.
We often point to the third-party payer problem as the cause of the explosion in health care costs. Insurers pay doctors who provide services to patients. This separation of payer and patient means the patient has little incentive to question the cost or even the quality of service.
Now imagine what would happen if a big part of a state’s spending is funded that way.
The state of Wyoming is wrestling with the growing gap between state spending and state revenue. Fortunately during its last meeting, Wyoming’s Revenue Committee showed an understanding of the effects of a tax increase on the fragile Wyoming economy. The committee discussed the issue of declining revenue for local governments and two options to fill the gap. Both tax grabs got little traction. What state politicians and taxpayers must now demand is local government reform.
In Wyoming, some politicians are looking high and low for ways to take your money, especially if they can make it look like someone else is slipping his hand into your pocket. One way that popped up during a recent Revenue Committee meeting is a tax on Internet retail sales. Proponents justify this tax grab in two ways. First, the need for more tax revenue to fund the state budget shortfall and second, the notion that hard-pressed Main Street businesses can’t escape collecting the tax so taxing Internet sales would level the playing field. However, government has a spending problem, not a revenue problem. An Internet sales tax won’t do much for the revenue shortfall and if government really cared about Main Street retailers, they would reduce their tax burden instead of extending the dead hand of government to the Internet.
- Replace Taxation Fixation with Bloat Elimination to Clear the Skies
Just when you think Wyoming's economic outlook can’t get any darker, it does. The Consensus Revenue Estimating Group (CREG) released its April 2016 update and sent a clear warning to policymakers. The report showed lower than expected revenue collections from most sources for fiscal year 2016, ending this June. The state is in trouble right now and the situation could be much worse in the 2017/18 biennium.