Since I wrote my article yesterday about the intentions of the Revenue Committee to start theprocess toward a corporate income tax, Forbes Magazine has published an article on the same topic. Patrick Gleason from the Americans for Tax Reform explains that on the first day of its meeting, the Revenue Committee
In yesterday's opening segment of the November meeting with the Revenue Committee, the members spent almost an hour discussing fine print on the retirement plans of the employees at Wyoming Lottery. Once that was done, they did a quick job of endorsing an increase in the tobacco tax. It will be sold as "leveling the playing field" by making sure it is equally high all over the state (and that it will be easier for the legislature to make sure it goes up equally everywhere, including the tribes).
Then the committee casually strolled through the hottest issue of the day: the corporate income tax.
Our local governments do not think they can tax us enough as it is, so they want us to be able to increase taxes on ourselves through new "special improvement districts" that can do everything government is not already doing. In reality, these new districts are not about new improvement - they are about new taxes:
In yesterday's analysis of the current jobs situation in Wyoming, I concluded that
the private sector as a whole has not yet recovered all the jobs it has lost since 2008. This is not an economy that can bear a higher tax burden.
I also noted that a review of wage trends would shed more definitive light on where our state's economy is heading. Let us therefore add that piece to the puzzle.
Time for another update on jobs and wages in our great state. There has been a lot of talk recently about our state's economy getting stronger, measured primarily in the form of rising tax revenue. I recently cautioned against this optimism, pointing to GDP numbers that suggest we are just out of another short growth spurt.
Today's review of jobs data lends some credence to that cautionary recommendation: we are not back in a downslope again, but it looks increasingly as though the minerals-driven uptick in jobs and economic activity that we have seen since early 2017 is coming to an end. The review of earnings data, which I will publish in a couple of days, may provide definitive evidence.
There was this girl somewhere in my extended family who wanted her mom to buy her a new book. It is good, of course, that a kid in elementary school wants to read, but at that time her mom happened to be a bit strapped for cash.
"That's OK" said the girl. "Just go to that machine where you get money."
"You mean the ATM?" the mother replied.
"Yeah. Just go there and get money."
That little girl grew up and now knows much better how the world works. Unfortunately, a lot of people never get past that stage where they think there is a self-replenishing ATM somewhere that they can go to whenever they think they need more cash.
Last week we examined Wyoming state spending as reported in the Census Bureau's state government spending database. Today, we take a look at another major source of state spending data: the annual State Expenditure Report by the National Association of State Budget Officers.
The two statistics producers report on the same variables - state spending - but there are enough differences between them to warrant an initial methodological note. First, though: why do we even use out-of-state sources to understand state spending in Wyoming?
I recently reported that GDP growth in Wyoming has come off another temporary spurt. It also looks like the upward trend in oil prices is coming to an end. Both these factors have obvious negative consequences for tax revenue, both at the state and local levels.
People can be sloppy with their research and their journalism all they want. When it leads to policy conclusions that are either ineffective or outright destructive, that sloppiness becomes everybody's matter. Mine, yours and everyone else's, because that is when it usually starts costing taxpayers a lot of money.
This is the second installment in a series of articles on the Wyoming state budget. You can find the first part here.
Contrary to conventional wisdom, the gateway to knowing what our state government actually spends does not run through the state budget itself. Due to lack of transparency, it is difficult to get a good grip on state spending by examining the budget. It is possible, of course, as we will see in a later installment, but if we go into the budget without any reference knowledge, it will make our experience more confusing than it needs to be.
While the Joint Revenue Committee continues to talk about how to increase the corporate tax burden here in Wyoming - see the agenda for their November 28-30 meeting here in Cheyenne - the debate over Medicaid expansion is picking up steam again.
Sometimes, it seems as though the idea with government is the same as with just-in-time manufacturing: no input should remain in the factory more than 30 minutes before it goes out as part of a finished product. In government, a dump truck unloads tax revenue in one end of the legislature, and before the money has even fallen to the ground a big fan blows it into the spending pipelines in the other end.
The trucks get bigger, and the fan blows harder.
On November 28-30, the Joint Revenue Committee is meeting here in Cheyenne. On their agenda is a little item called "Taxation of Corporations", which means that they are going to continue to talk about how to create either a gross receipts tax or, in follow-up of their September meeting, a corporate income tax.
On October 8, the Department of Workforce Services (DWS) released its study on the alleged gender wage gap here in Wyoming. Contrary to the false narrative that Wyoming is worst for women, our state is a classic example of what happens when men and women gravitate to industries they are best suited for.
Now that the "blue wave" turned out to be little more than a tsunami in a bath tub, and the Democrats have spent more money per gained Congressional seat than anyone since the Big Bang, perhaps we can get back to the issues that matter. Given that there will be a few new faces in our legislature here in Wyoming, and a new resident in the gubernatorial mansion, this might be a good time to remind everyone out there of the foremost issue facing our state: big government.
I have discussed taxes at length, explaining that:
The debate over state tax revenue continues. Yesterday I revisited the "funding gap" chart that the Economic Analysis Division has put out. It was in part in response to a reader's request, in part because I have several reasons to question the quality of work being done at the EAD. For example, their news release last week - like news releases before it - was sloppy and easily misled readers into believing that the trend in sales-and-use tax revenue was different, and better, than it really is.
Last week I renewed my criticism of the CREG reports for sloppy forecasting. I also noted, to their credit, that the latest CREG report has gone a little bit more realistic in its forecasting. It is too early to tell whether this is a genuine shift for the better, or a temporary aberration from their business as usual. Let us hope for the former.
In the meantime, in the lead-up to the fast-approaching 2019 session, we need to revisit an old friend: the "funding gap chart" produced by the state's Economic Analysis Division. As a reminder, here is what it looks like:
The latest report from the Economic Analysis Division on sales-and-use tax revenue pointed to a substantial increase in revenue. Based on historic experience with some EAD publications I was immediately skeptical to their numbers. The biggest problem, however, is how those numbers are represented in media, and - frankly - how the EAD writes its news briefs on their reports. Notably, even their chief economist hints of a problem here, an issue I will return to in a later article.
It is important, namely, to examine the EAD's publications and research. Their work carries considerable weight with the legislature and the governor. One of their most prominent products is the "we only pay for ten percent of our government" chart, a product that is riddled with errors and implicit assumptions to a point where it is best used as a Swiss cheese. I am working on a re-examination of that chart, which should be up early next week.
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