Gas price working group explores tax rebates and flexible sales tax
Governor Mark Gordon’s Wyoming Gas and Diesel Price Working Group met publicly for the second time last week to discuss more ways to lessen the impacts of high fuel prices on residents.
The meeting was a continuation of the group’s first public discussion the week prior.
The general consensus from the group is that fuel prices are having a negative impact on just about everyone in Wyoming; however, they said short term solutions are limited and that looking to the future is key.
Much of the discussion surrounded increasing oil and natural gas production, which the group said is largely dependent on an international supply chain, and increasing refining capacity in the state, which many say could be a huge financial risk.
Glen Murrell, the executive director of the Wyoming Energy Authority, said at the meeting that the ideas, albeit complicated, are still worth exploring further in order to have future energy security in the state.
“We were talking not just about commodity price issues today, but what is really an energy security issue tomorrow,” he said. “How does Wyoming get processed fuels into our industries and our residences?”
Rep. Clark Stith of Rock Springs proposed a flexible sales tax that is based on the price of oil as a potential short term idea that could help everyone.
Stith said this would mean the tax would decrease slightly when the price of oil is consistently high. Currently the sales tax is set at four cents. Stith added that the state budget is based on a forecast estimate for the price of oil per barrel, so for fiscal year 2023 it was $56. However, the actual price right now is $96, meaning the state is making money.
“For every $10 increase in the price of a barrel of oil above the estimate, the state makes roughly an additional $100 million extra in revenue,” Stith said. “So currently, we have a situation where our people on the street have the burden of paying for high fuel prices at the pump. And then while they are paying high fuel prices, the state itself is getting rich and getting more tax revenue.”
Stith noted that with this idea, only state sales tax would be affected, not local sales tax, and the rate would change quarterly. He noted that the impacts to everyone would not be equal.
“It would help you if you're buying a boat, if you're buying a vehicle,” he said. “It helps you less if you're just buying groceries where we don't tax.”
Brenda Henson, the director of the Wyoming Department of Revenue, said that one of the largest hurdles could be alerting vendors to change the sales tax every quarter.
“Keep in mind that when a customer pays an incorrect amount of sales or use tax, it is up to the vendor to provide that refund,” Henson said.
Another idea floated is a tax rebate program for those who can demonstrate need. Stith acknowledged that might make a bigger initial impact on wallets versus the flexible sales tax idea.
“You can certainly get real money out to the elderly and the disabled, for example, you know, just send them checks for $500 or $600,” Stith said. “If you want to get something more meaningful, you just have to target a smaller population of people that you're helping.”
The group is still exploring ideas and will meet again August 18th. Eventually, they’ll submit their recommendations to the governor.