Lawmakers breathe life into real estate transfer tax – Buckrail
Wyofile of
WYOMING – A legislative committee resurrected an often-failed real estate transfer tax, a levy that proponents say could help overcome the workforce housing crisis that is fraying the community fabric of Wyoming’s most expensive location.
The idea behind the voluntary 1% tax, introduced repeatedly by Teton County’s delegates, is to impose a sales tax on real estate transactions above a certain threshold. In its current form, the bill proposed by the Joint Revenue Committee of the Wyoming Legislature could raise perhaps $ 20 million annually for subsidized, deed-restricted housing or other community needs, said Rep. Mike Yin (D-Jackson).
“It could do a lot, it could really do a lot,” said Yin.
Teton County’s home sales are projected to exceed $ 3 billion in 2021, which will roughly double taxable retail sales in the tourist-flooded community.
Rep. Mike Yin (D-Jackson)
“Real estate is to Teton County what coal is to Campbell County, except that we can sell it over and over again at a higher price,” said Bob McLaurin, lobbyist for the Wyoming Association of Municipalities, testifying in support of the law.
The tax structure under consideration would allow the counties to exempt up to the first $ 1.5 million in real estate transactions. So if a home sells for $ 3 million, only half that amount could be taxed at the 1% surcharge if the county requests the full allowance. However, the proposed law also allows counties to set the threshold lower, making the tax a viable option for counties where home prices are not as exorbitant.
Counties could claim the optional tax if half of the registered municipalities plus county commissioners agree or if 5% of voters request it. In this case, the property tax would be levied on the voters in the county. How the funds would be used will be “clearly and appropriately” stated on the ballot, according to the draft law.
People whose jobs are hosting the Jackson Hole workforce say the infusion of funds that could return a property tax could dwarf the public dollars currently being used on the cause. Over the past five years, the Teton County government has invested $ 37 million in public funds in housing, an investment that resulted in 241 new units and raised approximately $ 100 million in additional private capital, according to Jackson’s housing director / Teton County, April Norton.
“That’s all we can do because we don’t have a source of funding,” said Norton. “We’re always looking at new potential projects, and our biggest limitation is funding. We have four [affordable housing projects] just ahead of us, but we won’t be able to afford four. Maybe we can afford one. “
Sotheby’s International Realty is selling this three bedroom, two bathroom home on 0.34 acre lot in East Jackson for $ 4.8 million. A real estate tax, backed by the Wyoming Legislature’s Joint Income Committee, would allow Teton County to impose a 1% surcharge on portions of the sale. (Mike Koshmrl / WyoFile)
Meanwhile, hourly wage workers and white collar workers providing the most basic Jackson Hole services are increasingly being billed outside of the location where they work. This has been a problem for decades and has been exacerbated by an aging workforce who are retiring, paying off their expensive homes, and leaving them. They are often replaced by wealthy newcomers with location-neutral jobs.
“We’re losing our people,” Anna Olson, president of the Jackson Hole Chamber of Commerce, told members of the finance committee. “My # 1 problem for employers is the lack of shelter for workers here, and it’s getting worse every day.”
New support
Olson urged committee members to move the proposed tax forward so it could be taken into account at the legislature’s budget meeting in February, and they did. The committee advanced the 18-page bill on December 15 by 8 votes to 4. A year ago, the legislature’s joint income committee enacted a nationwide property tax of 0.5% 7 to 6. More than half of the members of that committee changed, but there was also one vote that was flipped: that of MP Tim Hallinan (R-Gillette).
Representative Tim Hallinan (R-Gillette)
Hallinan has been influenced by a new provision in the bill that sweetens the pot for the state of Wyoming, he told WyoFile. Specifically, the Office of State Lands and Investments distributions to the local governments that administer property taxes would be reduced by 50% – and those funds would be diverted to the general fund.
Hallinan also isn’t sure if he’ll be voting for the property tax bill once the entire house meets in February, he said. Since this is a budget meeting, bills require a two-thirds majority to be dealt with in this chamber.
Two-thirds support is a “high bar” in Wyoming’s tax-shy legislature, said MP Andy Schwartz (D-Jackson), who has introduced land transfer tax several times without the support of the committee.
“My hope is that even if it dies in this session, it will come back as a committee draft in the general meeting,” Schwartz said.
Simple majority support was required during the general assembly, a “huge difference,” he said.
Newspaper archives show that there have been discussions about a real estate transfer tax in Jackson Hole since the 1980s and attempts have been made to get the idea to the Capitol in Cheyenne for 30 years.
My # 1 problem for employers is the lack of shelter for workers here, and it is getting worse by the day.
ANNA OLSON, PRESIDENT / CEO JACKSON HOLE CHAMBER OF COMMERCE
A similar decade-long effort led by Teton County was made to pass another county option tax that is common in Wyoming today.
According to old editions of the Jackson Hole Guide, lodging tax returns were introduced back in 1965, but they were challenged by the likes of the Jackson Motel Association, and it wasn’t until 1986 that the then government became. Ed Herschler’s signature waived the tax. Today Wyoming has a 5% bed tax on all short-term accommodations and counties have the option to add an additional 2% tax.
Old enemies
There is also constant opposition to the prospect of a new real estate sales tax. Laurie Urbigkit, director of government affairs for the Wyoming Association of Realtors, made her views known to lawmakers bluntly.
“Of course we are against this law,” she said. “We always have been and probably always will be.”
The Teton Board of Realtors has not taken a position on the bill, according to the Jackson Hole News & Guide. However, a few individual real estate agents have endorsed each other, including the owner of Prugh Real Estate, based in Jackson.
“I’m in favor of a transfer tax,” said Greg Prugh, “or at least for counties that have the ability to track it.”
A 350 acre ranch for sale features seven lots and five home sites on a site created for the property. While the price is not listed, similar properties in Jackson Hole can gross in the tens of millions of dollars. (Mike Koshmrl / WyoFile)
Urbigkit called the property tax “unconstitutional”. The 1% premium on speculative real estate investments is not fair, she said.
“It is not fair to put sales tax on these investments if we do not tax stocks or bonds,” she said.
The private sector, Urbigkit added, can find solutions to the labor shortage in Jackson Hole and beyond. That is being tried. Jackson Hole realtors recently launched a Community Housing Fund, a nonprofit that redirects donated brokerage commissions and home sales into affordable housing. The effort raised around $ 200,000 in the first month, the News & Guide reported, the majority of which was donated to the Jackson Hole Community Housing Trust.
Although a property tax is viewed as a Teton County’s tool, the idea has sparked interest in other Wyoming communities struggling to accommodate their workforce. Dale Steenbergen, president of the Greater Cheyenne Chamber of Commerce, told WyoFile that he believes the law could benefit southeast Wyoming.
“We need to bill the bill so that it can serve a larger percentage of Wyoming,” he said. “I bet I have a bigger housing problem in Laramie County. Jackson would have a stroke if they had to solve my housing problem. I need 5,000 residential units today. “