Gov. Mark Gordon signed a bill into law on March 5 that codifies into Wyoming law the system of distributing a portion of sales and use tax revenue to local governments.
The bill also raises the amount of sales tax revenue those communities, some of which are struggling due to property tax cuts passed by the state Legislature, will receive.
The practice of giving towns, cities and counties part of the sales tax revenue generated across the state has been in place since the early 2000s, said Ashley Harpstreith, the executive director of the Wyoming Association of Municipalities.
She spoke to Wyoming Public Radio near the House lobby hours before the bill, HB 107 - Local government distributions, was signed, and said she supported it.
Decades ago, municipalities in Wyoming saw their revenue streams continuously eroded by state lawmakers’ policy decisions, according to Harpstreith.
“ There were severance tax reductions,” said Harpstreith. “There was the food tax exemption, which every local community has a grocery store, and that's a huge sales tax driver [for them]. Also noting that sales tax is one of our main drivers for [communities’] revenues. And then there was … federal mineral royalties on the decline.”
Those decreases hurt local governments, she said.
“Our tax structure in the last 25 years has changed and eroded, and especially with the levers that they've allowed us to pull locally to pay for our services,” Harpstreith said.
Then, in the mid-2000s, state lawmakers told localities that they understood they’d made it harder to function, and offered to give them a direct distribution from the state’s general fund, she added.
“ So every two years, we got to sit in the hard chairs up in [the] Joint Appropriations Committee [room] and beg and plead for and explain why we needed the funding,” she said. “It was never consistent. It was always all over the place. So for us to be able to put this back into a revenue stream that is generated in our communities and is reliable and stable for our members and our communities is a huge win for us today, and for the residents and businesses and citizens of Wyoming.”
Wyoming currently has a 4% sales tax that applies across the state. The state gets 69% of the tax it collects, which amounted to more than $671.4 million in 2024. The remaining 31% is distributed to local governments.
HB 107 adds an additional 8% to that 31% that cities, towns and counties receive.
However, that additional slice of the pie would be distributed by what’s known as the Madden Formula, which is intended to provide added relief for the smallest or poorest jurisdictions. The current 31% would continue to be distributed using criteria that emphasize the place of collection – in other words, if sales tax is collected in Worland, it stays in Worland.
“ The 8% is slightly higher than what local governments are currently receiving in direct distribution,” Jerimiah Rieman, the executive director of the Wyoming County Commissioners Association, told WPR near the House. “So that will be incredibly helpful. But if you look back home, having that stability really matters.”
He used Washakie County as an example. It’s a hardship county, a designation that comes when a county levies one mill countywide that brings in less than $300,000 in revenue in a year. Rieman said 25% of the county’s entire budget comes from three discretionary sources. Two of those are federal. The third is from direct distribution.
“ Year to year, they always faced the threat that this funding was going to go away,” he said. “ Right now, they're decommissioning roads because of the property tax cuts that have happened. So losing direct distribution just means that you're going to lose emergency services. The sheriff's office -- that's really what they have left to start to look at. So having this stability moving forward, and even not having the threat of coming in the interim, or in the supplemental, that there might be a reduction of what had been appropriated the previous year -- that's just going to mean so much for local governments.”
Now that Gordon has signed the bill into law, Rieman and Harpstreith told WPR they won’t have to spend quite as much time in those uncomfortable chairs.
“It's not about our comfortability, but it was literally physically and emotionally painful,” Harpstreith said.
HB 127 - Voter approval for recreation mill levy - Dead in the Senate
This bill would’ve required an election when a local government wants to institute a recreational mill levy. It died in the Senate on March 3.
Mill levies are a tax rate that local governments use to raise money for public services, like weed and pest control. One mill represents $1 a taxpayer must pay for every $1,000 worth of the assessed value of their property.
Recreational centers like the Pinedale Aquatic Center had spoken publicly about the impacts of HB 127, which it opposed. The center said it relied on funding from a local school board’s recreational mill levy to provide a range of services to Pinedale residents.
“From a recreation standpoint, all of our communities are very, very unique in the way that rec mill dollars are currently spent in different communities around the state … because they work to meet the individual needs of those communities,” Amber Anderson, the director of the center, told WPR before the rec mill levy bill died. “By trying to pull something back and make it uniform for all communities across the state, it may not meet the needs of each of the individual communities.”
The 2026 legislative session is slated to end on March 11. March 6 is the deadline for either chamber to send bills to the governor’s desk.
This reporting was made possible by a grant from the Corporation for Public Broadcasting, supporting state government coverage in the state. Wyoming Public Media and Jackson Hole Community Radio are partnering to cover state issues both on air and online.
