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Fremont County group fights to end tax subsidies for private businesses – Cowboy State Daily

Residents and visitors to Fremont County, Wyoming, have poured $14.7 million of their tax dollars into economic development and transportation services as of April 2021, and many of them aren’t happy about it.

County residents in the 2020 general election passed an economic development measure to collect a half percent sales and use tax. Ballot language allocates 20 percent of the revenue for air service to Riverton, 10 percent to ground transportation such as local bus service, and the remaining 70 percent to the county and cities based on population for “economic development.”

That means anything that keeps or adds jobs or brings money into the community.

It’s a broad umbrella that has given many local residents heartburn because it has resulted in scores of private businesses, organizations and projects receiving public money — often tens of thousands of dollars each, and sometimes hundreds of thousands.

“There’s a general problem with subsidizing private business with government funds,” state Sen. Kyle Case, R-Lander, told the Cowboy State Daily on Friday. “The government has programs all the time. I know that But it’s very specific and very targeted and very wrong; and it’s based on some misguided sense that the government can do a better job spending your money than you can.”

Case is part of the political action group Citizens Affirming Sensible Taxation (CAST), which opposes the renewal of the tax in the 2024 general election.

He called the half-percent tax “regressive,” meaning it taxed poor people to give to the wealthier.

Subsidy for private business

Case is not alone in his discomfort.

Public outcry against grants to private businesses, including those in competitive markets, prompted the county’s local government this summer to change how it distributes the tax.

If voters pass it again, cities and counties would allocate 43 percent instead of 20 percent to air service and 17 percent instead of 10 percent to round-trip transportation — plus another 20 percent to the private ambulance company that serves Fremont County.

In this proposal, only 20% will remain for “economic development”.

It’s still not enough, Case said.

“They had to get rid of the private business subsidy completely and then I’d be happy to support it,” he said.

Neither of the new numbers nor the new ambulance service grant were part of the original 2020 ballot provision that voters passed. But supporters of the change say local governments are not breaking their contract with voters. They can squeeze the new numbers under the umbrella of “economic development” that dictates their discretionary grant-making.

Detractors have expressed doubts about whether local authorities can change their shares without running into legal trouble.

Fremont County Prosecutor Patrick LeBrun declined to comment on the legality of the new violation.

“See full picture here”

Julie Buller, chairwoman of the political action committee Forward Fremont County, which is advocating for the tax, said it’s a needed infusion into the community.

She emphasized that local government allocation changes happen in public meetings and that the city council members and county commissions that give final approval to tax credits are elected representatives.

This was in response to detractors who called the tax breakdown “opaque”.

“It’s really disappointing that people can’t see the whole picture here: that there are a few people who don’t want to pay taxes,” she said. “This is an investment in our community and we want our community to survive and thrive and bring new businesses here.”

Buller pointed to specific examples.

In 2022, Riverton approved an $80,000 grant for Kifaru Holdings LLC, a hunting equipment business that has in turn brought about 50 jobs to the community, she said.

The Riverton Medical District, which is not a public district but rather a nonprofit group trying to build a second hospital in Riverton, has received about $1.2 million in economic development grants, which it has directed toward secure several million dollars in federal funding and loans, Buller said.

Businesses are looking for air service, ground transportation and ambulances, she said.

“If we don’t have those things, our business won’t survive here,” Buller said.

Whether public or private, the county has maintained an ambulance service for several years often fought. Local bus and air services also predated the tax, although they complained of financial concerns before its passage.

Smash it

Fremont County consumers have paid $14,699,238 for the tax since it went into effect on April 1, 2021, according to Wyoming Department of Revenue data compiled Friday by the Cowboy State Daily.

Of that, nearly $10.3 million has been awarded to city and county governments in grant-in-aid grants to support economic development. Several of these grants have gone to private companies and groups, although some have gone to public organizations, such as Central Wyoming College.

That leaves roughly $2.9 million for air service and about $1.5 million for ground or bus transportation.

Averaging calendar years 2022 and 2023 yields an average annual tax of $4.35 million. Even if we make the generous assumption that tourists and travelers contribute 19 percent of the tax, locals will still pay $3.524 million per calendar year.

That works out to about $90 a year per resident.

Neither the state Department of Revenue nor the Fremont County Treasurer was able to determine a rate for passenger fees Friday.

For the Airmen

According to local businessman Rick Bestul’s calculations, the county commercial air service billed the city of Riverton (which controls the grant) about $1.6 million less than it received in tax money.

He found that figure by comparing invoice figures from the Wyoming Department of Transportation, which he provided Friday to the Cowboy State Daily, with Department of Revenue data.

In other words, commercial air service has a surplus of public funds.

“Yet every time you listen to them attend, they’re broke,” said Bestul, who opposes the tax.

He pointed to the Commercial Air Service’s recent request for more money, another factor that prompted local authorities to revise their allocation plan.

Riverton City Administrator Kyle Butterfield acknowledged the surplus Friday to the Cowboy State Daily. By his count, it’s closer to $2 million, according to an email he sent to Bestul earlier this month.

Butterfield’s figures include extra money that local authorities have given to the air service on top of the 20% allocated.

Even with the surplus, air service could probably survive for only another year, maybe longer, without the half-percent tax, unless local governments find another way to support it, Butterfield said.

The service’s requested subsidy doubled in recent contract negotiations, Butterfield wrote in an email to Bestul.

The new contract calls for two daily flights to and from Riverton, while the service provided just one flight a day for most of the COVID-19 era, he added in his interview.

He pointed to a Wyoming Department of Transportation study showing the economic benefits of having air service and said rural communities generally cannot provide that service without providing public funds.

Out of nowhere

Bestul said he hopes the county will reject the half-cent tax and later pass a better tax to support air and ground transportation and youth infrastructure.

But like Case, Bestul cringed at the thought of giving private business the people’s tax money.

“My biggest problem is taking money from people who are living paycheck to paycheck and giving it to business owners,” he said, noting that he is also a business owner. Bestul runs a successful auto parts business.

He said the grants may look like economic development, but they are simply a redirection of the economy: without the grants, business owners would get bank loans and pay interest to the banks whose local people benefit.

“I come from nowhere. I borrowed and borrowed and borrowed money. And I don’t come from the money,” he said. “I don’t think it’s up to the taxpayers to pay additional sales tax to fund me.”

Bestul added that despite the tax controversy, he hopes the community doesn’t split into camps of businesses willing to take the subsidies versus those not.

“I just think mistakes were made and now is the time to fix them and come up with a better plan,” he said.

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