A bill to raise the annual filing fees businesses pay to the state drew sharp criticism from Secretary of State Ed Murray last week, who said the measure is “ethically unsound” and will harm Wyoming business.
In a Jan. 30 op-ed published in the state’s two largest newspapers, the Republican secretary of state said the way sponsor Rep. Jerry Obermueller “ … initiated (the bill) is irresponsible and lacking in transparency.”
Leaders of the House rose to Obermueller’s defense. Addressing the House, Speaker Steve Harshman said comments of a “personal nature” on legislation are “out of bounds.” The speaker warned legislators that they have to protect the Legislature as an institution from such complaints.
As drafted, House Bill 267 would triple the fee from $50 to $150 a year. Freshman legislator Obermueller (R, HD-56, Casper), is a retired accountant who has impressed fellow lawmakers with his work ethic and ability to sniff out potential revenue sources for the cash-strapped state.
The bill was amended by the House Appropriations Committee, cutting the fee increase from $100 to $25, which raises the minimum annual fee to $75 if the bill passes.
Murray’s op-ed calls the bill “economically and ethically unsound.”
In both the Casper Star-Tribune and the Wyoming Tribune-Eagle, Murray wrote that the original $100 fee increase is detrimental to Wyoming’s “business friendly” environment and ultimately will harm the state budget more than it helps. Murray wrote that he adamantly opposes any fee increases in order to protect small businesses and encourage new companies to register in the state.
“I understand the need to raise revenue, but to raise it on the backs of small businesses that often struggle to get by strikes me as fundamentally unfair,” Murray wrote.
He also sharply criticized Obermueller for not consulting with his office. “I believe the manner in which HB 267 was initiated is irresponsible and lacking in transparency,” Murray wrote.
In addition to the newspapers, the op-ed was published on the Secretary of State’s Facebook page, and was on the office’s official website, although it has now been taken down. After the fee increase was amended down, Murray published a video on the Facebook page where he said he still opposed the fee increase.
Murray declined an opportunity to comment for this story this week. He has a particularly busy schedule, according to his public information officer Will Dinneen. Dinneen said he did not know why the op-ed was removed from the website.
Murray’s comments were published on Jan. 30. Four days later, the Republican caucus, describing itself as the “Majority of the Wyoming State Legislature,” issued a news release expressing support for Obermueller’s bill after it passed its first consideration on the House floor. The statement countered Murray’s argument that the fee increase would hurt Wyoming small businesses by saying the ease and cheap cost of registering in the state has at times left it open as a haven for fraud.
Raising fees would cut down on the abuse of Wyoming’s business environment, the release said.
“By having a filing fee more on par with other business-friendly states, the Legislature is exercising its responsibility to help drain the swamp and cut down on the time and resources required by the Secretary of State’s office to root out these bad actors,” Obermueller said in the release.
Raising the fee, which has not been adjusted in nearly 20 years, would make Wyoming less of a target for bad business actors seeking to set up shell corporations and dodge taxes, the Republican statement said. Wyoming is considered one of the best states to file an LLC in, along with Nevada, Delaware and South Dakota, though Delaware leads the pack in terms of the number of companies registered there according to the nonpartisan Institute on Taxation and Economic Policy.
“Last year more than 120,000 businesses filed in Wyoming, nearly 20,000 of which were from out of state,” the release said. It also referenced the fact that companies tied up in the release of offshore tax documents referred to as the “Panama papers” were traced back to Wyoming.
The release also listed a number of business organizations that supported the fee increase, including the Wyoming Business Alliance. That organization’s president, Bill Schilling, said he does not think the fee increase would hurt Wyoming businesses much. He also said he recognized the state’s need to raise more revenue.
“Adjustments have to be made through virtually every sector and every sub-sector,” Schilling said.
Obermueller said decisions dealing with revenue raising were difficult for all parties.
“In the House we respectfully disagree with each other daily on how to move the state forward. We have great respect for the process. It is transparent, and open for all to see, no matter how messy. The Secretary of State is entitled to his opinion, and he has the statewide reach to voice it,” Obermueller wrote in an email to WyoFile.
When the bill first came up before the House on Feb. 3, Speaker Harshman voiced his support for Obermueller. While he did not mention Murray’s name or office, Harshman warned the House to guard against threats to the institution.
“All of us as members of this body, I think we have to take it on to be guardians of the process,” he said. He commended the members of the House for making difficult choices when it comes to raising revenue.
“The personal kind of nature of things, in my mind, and frankly in our rules, is out of bounds,” he said, an apparent reference to Murray’s comments about ethics and responsibility.
“I applaud the bringer of the bill and the class act in which he has brought this to us,” he concluded.
Majority Floor Leader David Miller (R, HD-55, Riverton) echoed the message of solidarity. “I love you all,” he said. The bill passed that first floor debate on a strong voice vote and eventually passed the House 43 to 15.
Miller confirmed that Republican leadership in the House had banded together to support Obermueller in the face of unusual public criticism of a legislator from an elected official.
“We maybe pushed back a little bit,” he said. It was disappointing to see a public critique of a freshman legislator who “is frankly working his tail off,” to raise revenue and fix fiscal problems. “We supported what he was trying to do,” Miller said.
In a mid-January interview, House Revenue Committee Chairman Mike Madden said Obermueller’s background as a certified public accountant had made him valuable in finding overlooked revenue sources.