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Diversity: valuable in both tax structure and economy

Rob Godby, an associate professor in Economics and Finance at the University of Wyoming, had some advice this summer to those who want to diversify the state’s economy:

Diversification of Wyoming’s tax structure needs to accompany any effort at diversification of economic activity here.

Here’s what Godby told the Laramie Boomerang in June:

Our entire fiscal model depends on taxing other people through taxing energy commodities we ship out of state. If we were to develop a new economy — say it’s high-tech — we’d still be broke as a state using the current revenue model with no income tax, no corporate tax, depending heavily on property taxes paid largely by the energy industry. A lot of taxes are paid based on production potential. Sales tax is levied on activity we do in energy.

…At the end of the day, we need a new revenue model, and we still need a new model to tax that new base. It’s not to say it can’t be done, but the current economic model needs to change fundamentally if we are going to diversify the economy.

Meanwhile, he noted:

State services are essential in attracting the economic development we want to see occur — everything from infrastructure, good healthcare services, high-quality education — all of that is essential and requires government revenues. It’s a chicken-and-egg scenario: where does the revenue come from that we might need to support necessary investments to diversify the economy?

…People have become pretty used to having other people pay for services. Asking people in Wyoming to share a larger part of the burden is not going to be popular.
Read the entire Boomerang interview with Godby.

See the Pete Simpson Forum for essays on Wyoming’s tax structure by Sarah Gorin, a founder of the Equality State Policy Center and Buck McVeigh, leader of Wyoming Taxpayers Association.

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One Response to Diversity: valuable in both tax structure and economy

  1. Dewey Vanderhoff September 27, 2016 at 8:43 am #

    Wyoming changing its tax structure when the revised taxes can only move in one direction—-Up ?

    Snowballs in Hell come to mind. Our unique Genus and species of Wyoming conservatives in charge of achieving this radical reformation would rather catapult us back to the Paleocene to once again become hunter-gatherers and flintknappers than raise any tax by any percentage. It’s a matter of pride going before the fall. Wyoming is presently in free fall. The current fossil fuel bust feels different than all the Booms and Busts that have come to provincial Wyoming before , beginning with the collapse of the beaver trapping industry in 1835 then the dozen or so since. Remember, coal has crashed once before, when the railroads went to diesel electric locomotives. I’ve lost count of how many ups and downs and loop ‘de loops the big oil and gas roller coaster have done just in my lifetime. I graduated high school in Cody in a year when the State had a grand total of $ 80 in its bank account and Gov. Stan Hathaway was our commencement speaker. He was a progressive Republican , a pragmatic but by necessity, not choice. Yet he rammed thru the Permanent Mineral Trust Fund with its very modest severance tax attached. I cannot remember a time since 1969-71 when Wyoming Republicans were willing to make robust adjustments to the state tax structure. So here we are… residing in a Second World energy colony beholden to corporations, lacking institutional memory and control of our own destiny , with a failed sense of history , staring into yet another abyss named Bust. Matt Mead’s legacy may well be that of the dynastic GOP Governor who presided over the implosion of Wyoming.

    We find ourselves in a state where the cultural arithmetic says ” Tax” is a four letter word. Perhaps we are asking the wrong questions this time around ; electing the same old Paleo-politicos. Maybe it is time to give Stub Farlow and Steamboat a rest from their Eternal Rodeo Ride and embrace the 21st century with fresh perceptions. While we still can…

    Cody, Wyoming

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