SHERIDAN — The Joint Interim Revenue Committee voted down five potential revenue bills Wednesday in its final meeting before the legislative budget session begins Feb. 12. Only one of the bills — a leisure and hospitality tax — made it to the discussion stage, as the other four died due to a lack of support.
The leisure and hospitality bill —which proposed a 1 percent excise tax on purchases in bars, restaurants and hotels — had six votes in favor and six votes against. To move forward, a bill requires a majority of votes in favor, so the leisure and hospitality tax died.
The proposal received public support from members of the state tourism industry. Rep. Mike Madden, R-Buffalo, co-chair of the revenue committee, voted in favor of the proposal and expected it to pass.
“It totally surprised me that that one didn’t make it, especially given the importance of tourism in this area,” Madden said.
Sen. Dave Kinskey, R-Sheridan voted against the proposal because he said the government needs to decrease spending before raising taxes.
Rep. Mark Kinner, R-Sheridan voted against it, as well, because he was concerned about the timing of adding a new, narrowly-focused tax.
“Right now, we really don’t have a whole comprehensive plan for the state,” Kinner said. “I still was also kind of questioning carving out a tax for a specific industry.”
Kinner also said it didn’t appear the tax would go anywhere in the official budget session even if it got through the revenue committee.
Rep. Cathy Connolly, D-Laramie, made a motion to bring three other bills to discussion: a 0.5 percent sales tax for school construction and two related to property tax assessment rates. None of her motions received a second motion, so they died without a vote. A proposal to have a sales tax on specified services didn’t receive a motion for discussion, also dying without a vote.
The committee was tasked with recommending proposals that could raise up to $300 million in revenue to present to the Legislature. The committee’s two revenue-generating proposals— a tobacco tax and wine and spirits markup — would raise less than $10 million combined.
Madden said the combination of not going forward with a more costly school funding model from recalibration and the January Consensus Revenue Estimating Group report made it less pressing to pass revenue bills. Last month’s CREG report projected that an additional $140 million in funds will be available over two years, mainly due to an increase in oil price and production.
Madden also said the Legislature may not have to use much of the Legislative Stabilization Reserve Account — also known as the rainy day fund — because of the better projections in the CREG report.
Now that the major revenue-generating bills are off the table, other ways to cover the remaining deficit include diversion funds, one-time gains and budget cuts.
Regarding the approximate $484 million K-12 education deficit for 2019-20, Kinskey said cuts are coming and the Legislature will have to decide how much.
“Whether the 4 percent cuts that education has taken over the last three years is enough or whether we should ask a little bit more,” Kinskey said, “that’ll really be the big debate for the session.”
Similarly, Kinskey mentioned a recent encouraging conversation he had with a school superintendent.
“He said, ‘Whatever you do, we’ll find a way to deal with it and still take care of the kids, the teachers. All we ask is that you give us time to adjust,’” Kinskey said. “That’s the most sensible thing I’ve heard said in the entire debate in the last three years.”
The death of the revenue committee’s numerous proposals all but assured that budget cuts will arrive shortly down the road.