Mayor: Without direct distribution, towns could fold

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CLEARMONT — Small towns in Wyoming, like Clearmont, Dayton and Ranchester, may have to tighten their belts for the fiscal year 2018 budget. If the $105 million state direct distribution funding is not awarded for FY 2018, many small towns in Wyoming will be in jeopardy of losing their ability to provide services to residents.

Mayor Chris Schock of Clearmont said he has been receiving $35,000 in direct distribution funding, which is 10 percent of his annual budget. That money goes into the town’s general fund to pay for maintenance, supplies and payroll for the two town employees.

The town employees currently work 32 hours per week without benefits. Schock said if the funding doesn’t come through, he will have to cut their hours to 20 per week, which will impact services such as mowing the grass in town and snow removal from the streets.

Mayor Norm Anderson of Dayton said he receives a little over $50,000 twice a year, totaling $102,000, which is 8 or 9 percent of the town’s general fund budget.

The funds go toward general expenses and payroll. Dayton added one employee, but still the town is running under-staffed, he said.

Without the FY2018 funding, Dayton will have to freeze wages and cut expenses such as Dayton Days and town beautification, including trimming the trees in the parks.

Mayor Peter Clark of Ranchester said he receives $114,000, which makes up a large portion of the general operating budget of $600,000. It pays for everything, he said, including street repairs, recycling and green waste programs, vehicle maintenance, water and discretionary offerings, such as providing help to the Sheridan Senior Center, the Tongue River Valley Community Center and the Dog and Cat Shelter.

Without the direct distribution, Ranchester will have to cut all discretionary offerings. The town staff has already been reduced by two positions through attrition. The town doesn’t have any major projects planned other than finishing work on the sewer lagoon and the replacement of the last of the old clay sewer lines under U.S. Highway 14.

The direct distribution funding is appropriated by the state for the 99 registered municipalities that make up Wyoming. The funding supports the towns and communities, in which 70 percent of the people in the state of Wyoming live.

Kristin Magnusson | The Sheridan Press
When things were going really well, the direct distribution was quite a bit more. It was $150, then it dropped to $105. Legislators tried to cut it back to $90, but the governor interceded and brought it back to $105, Mayor Peter Clark said. Information for the graphic obtained from Wyoming Association of Municipalities October 2016 Financial Report.

Rep. Mike Madden, R-Buffalo, who has a doctorate in economics, created a formula so the funds would be redistributed fairly among all the municipalities and counties throughout the state.

“The formula is designed to help those counties and cities that need help the most,” Madden said. “To determine how badly they need it, we look at their ability to raise revenue themselves. We look at sales taxes per capita and we look at property taxes per capita. Wealthy cities and counties get very little of the $105 million, and those with a low ability to raise local revenue get much more.”

Madden said the funding is in jeopardy of being cut because there is no extra general fund revenue to pass back like in the past. However, the legislative stabilization reserve account, also known as the rainy day fund, currently has more than $1.5 billion in it.

“The way I look at this legislative stabilization reserve account, I look at it more broadly than just stabilizing our own budgets,” Madden said. “I think we have to stabilize local governments as well. It would be devastating for some of these local governments that cannot sustain themselves to not get any distributions from the state.”

Madden warned that when the time comes to make the hard choices to accommodate different interest groups, if they use the rainy day fund there will be several knives in the pie. Those knives will not be limited to the municipalities, the school foundation program and a prison that is no longer structurally sound will also have to be considered.

Madden said he doesn’t know of any other revenue alternatives for the local governments. Raising the sales tax will not help communities that don’t have businesses. Even if the only business is a grocery store, that will not help because legislators removed taxes on food.

“Legislators don’t want to dip into the rainy day fund until it starts to rain,” Schock said. “As far as I’m concerned, it’s raining. If they are concerned about depleting it, what I call the barometer tax could be a solution to counteract the depletion.”

The barometer tax refers to an amendment to an education funding House bill that proposed if the rainy day fund drops to $500 million, a half-cent tax would kick in. The revenue generated would go into the rainy day fund until it builds back up to $1 billion. Once that amount is reached, the tax goes away until needed again.

Schock expressed concern that if the direct distribution funding is taken away, some smaller towns in Wyoming would fold quickly. If they fold, he said, state statute dictates their financial responsibilities go to the next largest municipality. If that municipality can’t afford to absorb their interests, the folded town becomes the responsibility of the state.

“Would it be cheaper for them to give us $35,000 now or pay $350,000 later to help us operate,” Schock asked. “It’s the same principle as changing the oil on your vehicle. An oil change is cheaper than buying a new engine.”

By |April 27th, 2017|

About the Author:

Kristin Magnusson grew up in a rural town near Louisville, Kentucky. In 2003, she moved to Denver to earn a bachelor’s degree in multimedia studies and broaden her horizons. In 2009, Kristin moved to Sheridan , where she worked in video, as a ranch hand and veterinary assistant. In April 2016, she started a new adventure at The Sheridan Press.

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