A 5 percent sales tax for Sheridan is on the ballot Nov. 5. We can vote to re-impose the 1 percent Capital Facilities (CAP) Tax, keeping our sales tax at 6 percent or we can choose to reject the CAP tax and return to a 5 percent rate. In an effort to stimulate debate and “fully inform” voters, here’s a brief history of our sales tax.
The CAP tax was first imposed in 1979, adding 1 percent to the existing state mandated 3 percent sales tax. The CAP tax lasted until 1985, when it was voted down. Our sales tax again fell to 3 percent, where it remained until 1989. That was a big year, as the 1 percent CAP tax was re-imposed and the one percent (optional) was also added, bringing our total to 5 percent.
Sheridan had a 5 percent sales tax from ’89 until 1993, when the state raised its mandated minimum to 4 percent, giving us a total of 6 percent from 1993 until today. That’s 20 years of a 6 percent sales tax, in a state where 13 of the 23 counties have opted for a 5 percent or lower sales tax. No county in Wyoming has a higher sales tax than Sheridan.
That’s taken from official Wyoming Department of Revenue, but now let’s look at sales tax totals, to get a better look at our economy. From 1993 until 2008 Sheridan’s total revenues were on an up trend. We went from total sales revenues of about $11 million, to a peak of almost 40 million dollars in 2008. That mirrors a growing national trend.
But in 2009, as the recession hit us, our sales revenues began a steady decline to (est.) $25 million in 2013. That’s a total revenue drop-off, of almost 40 percent in the last 5 years. That’s more severe than the nation’s 1-2 percent GDP growth rate. Sheridan’s sales tax declines indicate either a more serious recession in the county or (possibly) sales are leaving the county, in search of lower taxes.
While we can’t know precisely why our sales have fallen so drastically, it’s a subject of significance and we should be asking ourselves how we can improve Sheridan’s economy. Has the “Laffer Curve” maximum rate of taxation been achieved? Perhaps we should discuss lowering our sales tax rate, in order to stimulate the economy and provide much-needed tax relief to struggling individuals and businesses.
History shows that presidents Kennedy, Reagan and Bush all lowered the tax rate and got increased total tax revenues into the government. Could a 5 percent sales tax rate help our local economy and eventually get our total sales tax revenues back on a positive track? We’ve got about six weeks to discuss it, then vote.