|Greetings. and Happy November!|
Here’s one big lesson I’ve taken out of my time on the Jackson Town Council: Life can get in the way of plans.
Specifically, when I took office in early January, I’d planned to send out a “My Life as Town Councilor” newsletter every month or, at worst, every quarter. Ten months later, I’m finally getting around to the first one.
The reasons for the disconnect are manifold, but the essential one is that the job has taken far more time than I anticipated. Only in the last few weeks have things slowed down to a pace where I have the bandwidth to write something of substance.
In today’s piece, I want to talk about local government financing, in particular two aspects of it:the November 5 election for Special Purpose Excise Tax (SPET) measures; andmore broadly, how that tax fits into the larger picture of Town of Jackson funding.Most importantly, 10 months into the job, I am both thrilled and humbled to be a member of Jackson’s Town Council. Thank you for all of the support and good wishes I’ve received, and please know I am trying my very best to be worthy of the honor of representing our extraordinary community.Cheers!
My fervent request of you is to please, please, please vote “Yes” for all 10 SPET measures.
Election Day is Tuesday, November 5.
Regardless of where they live, Teton County residents can vote at one of two locations:the Teton County Library orthe Old Wilson Schoolhouse. Polls are open from 7:00 am to 7:00 pm.
If you are not registered to vote, you can register at the polls on Election Day. In the immortal words of Captain Bob Morris: “You need live here only a minute.” For more information on registering to vote, please follow this link:
What you’ll find below
The rest of this newsletter is divided into four sections:
Sales taxes in Teton County and the Town of Jackson
Local government funding in Wyoming
Four reasons to vote “Yes” on all 10 SPET measures
The 10 SPET measures and why I support them
|Sales taxes in Teton County and the Town of Jackson |
Currently, any taxable sale made in Teton County is subject to a 6% sales tax. In turn, this has three components:Wyoming’s basic 4% sales tax;the additional 1% Teton County sales tax; andthe 1% SPET tax.The Wyoming 4% tax
As a state, Wyoming levies a 4% sales tax. Of this, 69% of that goes to the state, and 31% goes back to the county in which the sale occurred. Once back in that county, the 31% is split between local governments based on the most recent Census count.
In Teton County, the 2010 Census found that 45% of the population lived in the Town of Jackson, and the remaining 55% lived in the unincorporated county. As a result, for every $1 raised from this basic 4% tax here in Jackson Hole, the state of Wyoming gets 69¢, Teton County gets 17¢, and the Town of Jackson gets 14¢.
The Teton County 1% tax
A couple of decades ago, Teton County’s voters authorized an additional 1% tax. This adds an extra penny on top of the state’s 4%.
Unlike the basic Wyoming tax, essentially all of this “fifth cent” tax stays local. The state takes 1% for a processing fee, and the Census 45% town/55% county population split divides the remaining 99% so that the town gets just under 45¢ of every dollar raised, and the county just under 55¢.
Like the money the town and county get from the Wyoming 4% tax, funds from the 1% optional tax can be used for any purpose. The Town of Jackson opts to use roughly half of its 1% proceeds for general operations. The other half goes to capital projects, a combination of new efforts and maintenance on big-ticket items such as roads (the town has $250 million worth of capital infrastructure and assets that need to be maintained).
Do the math, and out of every $1.00 raised by the 4% + 1% sales taxes levied in Teton County, the state of Wyoming gets around 55¢, the Town of Jackson around 20¢, and Teton County around 25¢. Given that roughly $1.6 billion in taxable goods were sold in the past 12 months, this means the 4% + 1% sales tax raised roughly $44.3 million for the state’s general revenue fund, $19.6 million for the county’s, and $16.1 million for the town. Of the latter figure, the town set aside around $3.6 million for capital projects, leaving $12.5 for general operations.
And then there’s SPET.
SPET is Teton County’s sixth cent of sales tax, and can be used only for capital projects – it cannot be used for operations.
SPET funds also have a further restriction on them: Any project funded by SPET has to be approved in advance by the voters. As a result, the 6th cent you paid last time you bought a taxable item in Jackson Hole is being used to fund SPET projects the voters approved during the last SPET election, in 2017 (e.g., expanding the Living Center at St. John’s Medical Center, and improving Fire Stations #1 and #3).
The items approved in the 2017 SPET election will be fully-funded next March or April. If none of the items on the November 5 ballot are funded, the sales tax rate will drop back down to 5%. If one or more of the ten items are approved, then the sales tax will remain at 6% until they are funded.
Every SPET initiative that receives a majority of the votes will be funded. This means that voters can support every initiative without worrying about harming any other.
Once voters have decided which projects they support, representatives from the town and county will decide which should be funded first, second, and so on.
One important point to note is that SPET is not a “special” funding mechanism, but one intended to be a basic government funding tool for Wyoming’s local governments.
As a result, over the three-plus decades SPET has been in existence, nearly every one of Wyoming’s 23 counties and 99 municipalities has used SPET to fund projects that couldn’t be paid for out of their general funds without cutting basic services.
The reason for this is basic math. Here’s how it works in Teton County.
At current rates, the SPET tax will generate around $16 million/year for capital projects. To put that figure in context, this $16 million from SPET is about as much as the Town of Jackson receives in total from all of its 5% sales tax revenues. Simply put, if Wyoming’s towns and counties want to fund capital projects, the only realistic tool the state has given them for doing so is the SPET tax.
|Local government funding in Wyoming |
Before the early 1970s, Wyoming relied on a 3% sales tax as the primary means of funding state and local government.
For a variety of reasons, by the early 1970s that method was no longer sufficient, so with some reluctance the state started taxing minerals. Since then, the statewide sales tax rate has gone up to 4%, but nothing else has fundamentally changed about how Wyoming funds state and local government: We’re still basically reliant on minerals and taxable sales.
The problem, of course, is that we are still using this 20th century funding mechanism to fund our 21st century communities. And arguably there are few communities in the country, and certainly not in Wyoming, that are more 21st century than Jackson Hole. As a result, there’s a growing chasm between what the community is asking government to do (e.g., meeting 21st century challenges such as protecting the environment, building affordable housing, addressing transportation-related issues, and dealing with rising income inequality) and what Wyoming gives its local governments the financial capacity to do.
In particular, in 2020 the Town of Jackson will get roughly 3/4 of our general fund (i.e., operating) revenues from sales taxes, with the remaining 25% from a combination of all other sources. Yet taxable sales account for only around 16 percent of Teton County’s entire economic activity. Hence 75 percent of the town’s revenues come just 1/6 of our economy.
It’s not quite as extreme for Teton County’s government, for unlike the town, the county levies a property tax. This makes the county’s general fund revenue split around 50% sales taxes, 25% property taxes, and 25% all other, but it still means that half of their revenue comes from one-sixth of the county’s economy.
|Four reasons to vote “Yes” on all 10 SPET measures |
There’s a good reason to vote “Yes” on each measure; here are arguably the four most salient:
1. These projects have all been vetted, and arguably all are “needs” rather than “wants”
The Town Council and County Commissioners originally considered over 20 projects. The 10 on the ballot are ones the electeds unanimously felt were:important to the community; andfully vetted regarding price, plans, and the like.
2. If a particular project fails, the only other way it can get funded is by cutting services elsewhere
As suggested above, Wyoming’s 21st century communities must use a 20th century mechanism to fund their needs. If we cannot use SPET funding to address Jackson Hole’s 21st century capital needs, we’ll have to either go without or use money currently funding operations. If it’s the latter, this will likely mean reducing the basic services residents now enjoy.
3. Tourists will pay about half of the total
Estimates of the proportion of local taxable sales paid by tourists range from 45-60 percent. To be conservative, let’s call it 50 percent.
This means tourists will directly pay at least $38.5 of the $77 million SPET bill.
Under Wyoming state law, there is no other method for funding capital projects that allows tourists to directly pay for SPET projects.
4. Funding every project will cost the typical Jackson Hole resident under 90 cents/day
Some basic math.
If all 10 SPET measures are passed, it will take around five years to raise the $77 million. The half paid by locals equals $38.5 million, which means each year locals will have to pay $38.5 million/5 = $7.7 million
There are roughly 24,000 permanent residents of Teton County, meaning each year each resident will pay an average of $7.7 million/24,000 = $321
$321/365 days/year = 88 cents.
|The 10 SPET measures and why I support them |
In the order the ten measures will appear on the ballot, here is the basic reason I voted to support each of them.
Proposition #1: Town of Jackson Downtown Water Quality Improvement Infrastructure – $2 million
We live in arguably the healthiest ecosystem in the lower 48, yet the stretch of Flat Creek that runs through town is classified as ecologically “impaired.” This project will go a long way toward addressing that problem and related concerns.
Proposition #2: Core Services Vehicle Maintenance Facility – $18.5 million
Over 350 vehicles are currently serviced in the current maintenance facility, including snow plows, street sweepers, police cars, and ambulances. This is roughly twice the number serviced when the three-bay facility was built 20 years ago, so when things get busy, sometimes mechanics must work outside in sub-zero temperatures. Jackson’s mechanics deserve better; so does our community.
Proposition #3: Teton County Courthouse – $2 million
The courthouse was built in 1968. It has aged and been upgraded about as well as can be, and then some.
Proposition #4: “Road to Zero Waste” Recycling & Composting Infrastructure Improvements – $2.5 million
The infrastructure improvements funded by this measure will allow the community to increase the amount of waste it recycles and composts from the current 30% to closer to 60%.
Proposition #5: Jackson Hole Fire/EMS Wildland Firefighting Apparatus Replacement – $1.6 million
Some of our current wildland fire trucks were unable to fully deal with the challenges posed by the two East Gros Ventre Butte fires this past summer. What happens when really big wildland fires hit, as they invariably will?
Proposition #6: Gregory Lane: Street, Stormwater and Sewer Infrastructure, and Safe Route to School – $8.5 million
The “cowboy engineering” used to develop Gregory Lane area 50 years ago has long since shown its age and shortcomings, leaving the area subject to floods and a hazard for drivers and pedestrians alike. Plus the sewer line running underneath, which drains all of Jackson, is made of clay and prone to leaks.
Proposition #7: Community Housing Opportunities – $5.5 million
This will fund efforts to address what the community feels is our greatest challenge: increasing the supply of affordable housing.
Proposition #8: History Museum Building (Genevieve Block) – $4.4 million
A community that loses touch with its history loses touch with its soul. This is a way to honor, remember, and continually learn from the people who helped make Jackson Hole what it is today.
Proposition #9: Teton County/Jackson Recreation Center Expansion and Renovation – $22 million
The expansion will support the large and growing percentage of the community who cannot afford or physically take advantage of the region’s high-end recreational opportunities
Proposition #10 Wildlife Crossings – $10 million
Our moose population is being killed by cars at a rate faster than they can reproduce.