Wyoming Revenue Estimate Continues To Improve

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Spurred by concerns over lack of accountability and financial reporting, lawmakers will try again to lower state payments designed to help counties and towns deal with impacts of large industrial developments such as wind farms and power plants.

The Joint Minerals, Business, and Economic Development Committee on Thursday advanced the draft Local impact assistance payments bill. The measure would lower the maximum-allowed percentages of state sales and use taxes that are redirected to communities to help them pay for fire, EMS, police and other local services that are stressed from large industrial construction projects.

The measure passed on a vote of 7-4 with three members excused. 

What’s in the bill

So-called “community impact assistance” payments are calculated using a complicated formula that aims to quantify large-scale-project impacts.  They are based on local sales and use taxes generated from construction and purchasing related to a qualifying industrial project. Communities may receive up to 2.76% of those sales and use taxes that would otherwise go to the state’s General Fund to help manage “unmitigated impacts” — a determination made by the seven-member, governor-appointed Industrial Siting Council

Last year, the Senate passed a measure to lower the maximum percentage from 2.76% to 2.25%, but it failed in the House.

The latest measure proposes capping the maximum on a three-tier system: 2.25% for qualifying industrial projects with a total estimated material costs of $350 million or less; 2% for projects between $350 million and $850 million; and 1.5% for projects of $850 million or more.

Both the Wyoming County Commissioners Association and the Wyoming Association of Municipalities support a tiered system and reporting requirements, according to association representatives. They also supported a successful amendment that would allow the ISC to increase the maximum to 2.55% for projects with total material costs of $350 million or less if it determines 2.25% is insufficient.

Basin Electric Power Cooperative’s Dry Fork Station north of Gillette commenced operations in 2011. The $1.35 billion power plant has a generating capacity of about 400 megawatts. (Dustin Bleizeffer/WyoFile)

Each county, city and town that receives a distribution would be required to report to the ISC annually about how they spent the impact assistance payments.

Lowering the maximum percentages and adding reporting requirements will both protect the state’s coffers from major expenditures while building more accountability into the system, Rep. Scott Heiner (R-Green River) said. The lower percentages should still result in significant financial assistance, he added.

For example, the ISC awarded a total $34.8 million in community impact assistance payments to counties, cities and towns in 2018. The proposed lower caps would have resulted in reducing that total by $400,000, Heiner testified to the joint committee. The $33.9 million in payments made in 2019 would have been reduced by $270,000.

“So it’s kind of a token amount,” Heiner said. “What we’re really doing is just sending a message to our Industrial Siting Council that they need to be a little bit more careful when they look at these unmitigated impacts and awarding the money of the state of Wyoming, and vet that a little bit closer.”

Reporting and accountability

The ISC doesn’t have the authority to require a full accounting for how the money was spent, according to Industrial Siting Division Deputy Director Luke Esch, who administers the program. It’s a point of contention for some lawmakers. Instead, the seven-member ISC determines payment levels, but the payments are made through the Department of Revenue. 

Joint committee member Rep. Cyrus Western (R-Big Horn) quizzed Esch about the agency’s efforts to glean such information despite its lack of authority.

“So they could be spending this money buying snowplows or buying popcorn machines for all we know?” Western asked Esch.

Esch shrugged in agreement, offering no verbal response.

Proponents for revising payment calculations and reporting worry that too much money is on the line given the current lack of accounting for the program. They also worry that a surge in prospective large industrial projects could squeeze the amount of sales and use taxes that would otherwise go to the state’s General Fund.

Borne on two flatbed rail cars each, wind turbine blades pass through the historic coal mining town of Rock Springs in March 2019. (Andrew Graham/WyoFile)
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