Wyoming lawmakers weigh shifting part of state sales tax back to local governments

Don Richards, budget fiscal administrator with the Legislative Service Office, told the Joint Appropriations Committee the review was requested to consider alternatives to the current state/local split of the 4% statewide sales and use tax and to examine the “local government direct distribution model.”

The most immediate policy proposal before the committee is a plan from county and municipal associations to take a portion of the state’s share of the 4% sales tax and run it through the existing direct-distribution formula (commonly called the Madden formula) so local governments receive that money automatically rather than via a biennial legislative allocation.

Why it matters: Wyoming’s current statutory split sends 69% of the 4% sales tax to the state general fund and 31% to local governments. Proponents say memorializing a portion of the state share for direct distribution would give smaller and revenue-challenged counties and towns more predictable funding and reduce the “biennial wrangling” over those payments. Opponents raised concerns about reducing state revenues and about the differing beneficiaries of sales-tax- and property-tax–based funding.

Key facts presented

- Statewide sales and use tax rate: 4% (unchanged since 1993). - Current distribution: 69% to the state general fund; 31% to local governments. The local share is subject to a 1%…