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Recap the Tax Facts

Let’s ReCAP the TAX Facts!

The Jackson Hole real estate market saw over $2.75B in sales in 2021, with a median sale price of $1.84M (over $4M for a single-family home). Prices remain high, exacerbating our ever challenging housing market into absolute crisis. 84% of our hospital workers can’t afford to live in the valley – despite a recent wage increase that puts them in the top 10% nationally.

It’s time to take action to make things better, not worse, for working people in our community.

Scrap the “Cap the Tax” Idea

As everyone knows, high housing values have also impacted our property taxes significantly; it’s the issue that comes up most often while I’m going door to door. Quite simply, we should not take action that incentivizes additional wealthy people to purchase real estate here. This is why I do not support the “cap on tax” idea that Republican candidates, including my opponent, favor. Here’s why:

1. As an assessment limit, a tax cap is the worst way to provide property tax relief, according to the Lincoln Institute of Land Policy. It gives a much bigger tax break to wealthy people than middle-income people, as it correlates directly with the value of one’s home. Giving the owner of a $5M home a tax break five times that of the owner of a $1M home makes no sense.

2. It’s patently unconstitutional. The Wyoming Constitution requires that property be uniformly valued within each class of property; a tax cap would alter that uniformity and create additional unintended consequences. At best, it would take AT LEAST two years to get on the ballot, and three to implement. It is not an immediate fix, as my opponent would lead you to believe.

Practical Solutions for Property Tax Relief

My solutions provide direct tax relief to people who need it most:

1. Circuit Breakers and expanded refund programs

Circuit breakers provide tax relief to households spending the highest share of their income on property taxes, such as seniors on fixed incomes, low-income homeowners, individuals facing a sudden reduction in earnings, or others who spend a significant amount of their income (6% or more) on property tax.

Taxpayers could receive a credit or an exemption equal to the amount by which their property tax bill exceeds a designated percentage of their income. The state could also fund, update and expand current refund programs to increase who qualifies.

Circuit breakers provide the greatest relief to those most in need while also addressing the hardship for our middle-income earners faced with five-figure tax bills.

2. Expand Homestead Exemptions

Homestead exemptions can make the distribution of the property tax more progressive. These broad-based exemptions could be available for all owner­-occupied primary residences and provide either a partial exemption from the tax or a partial credit against the property tax bill.

Existing programs targeted at seniors, veterans and homeowners with disabilities could also be expanded.

3. Expand Deferrals

Deferral programs allow homeowners to delay payment of their property taxes until ownership of the home is transferred or the owner’s income status changes.

At that point, the full amount of deferred tax becomes due, with interest. Teton County has established a county program that will be implemented next year. Unlike other forms of tax relief, deferrals impose no long-term cost on other taxpayers. At the state level, we could expand who can qualify for a deferral and the amount of assistance they are eligible for — currently this is limited to one-half of one’s tax liability. With outreach and education, such programs can be more broadly accepted when other programs otherwise fall short.

4. Provide Greater Payment Flexibility

Many families are struggling to budget for the sharp year-to-year tax increases we have seen in the last two years. Phasing in unusually large assessment increases and allowing monthly property tax payments or other ways to provide greater flexibility could also help to reduce pressure on household budgets.

All of these programs are more feasible, realistic and cost-effective than the “cap the tax” idea promoted by Republicans.

Increase Funding for Affordable Housing

Nearly every county in the United States lacks enough affordable housing to meet resident needs, but Teton County is particularly challenged due to our limited developable land base and global demand.

Increased demand has heightened and expanded the long-standing housing shortage, especially for the rental market. Although local land-use regulations and zoning practices can affect the ability to build and preserve affordable housing, changes to those local regulations will not solve Teton County’s affordability crisis. Public subsidies are still necessary to meet the housing needs for many of our low and middle-income families. Meanwhile, what the market builds is $2.8M condos and even more expensive houses that are snapped up by remote workers and wealthy second-home buyers, creating more demand for workers.

The Teton Board of Realtors’ Community Housing Fund that allows realtors and sellers to contribute voluntarily is a well-intentioned and positive – but wholly inadequate – effort, as it has raised $500,000 when the need is something closer to $500M.

The $70M for housing measures on the SPET ballot for hospital, school, county, city, and community housing will help, but as a community, we need to do more or we will continue to lose our small businesses, senior citizens, and working class.

A local option real estate transfer tax (RETT) – something most states have and an idea I support – could help fill this gap without having a significant impact on our local real estate market or realtors’ bottom line.

A home in my neighborhood is a great example: bought by second homeowners in 2017 for $1.6M, they sold it late this summer for $3.9M. The difference between their asking and closing price was $200,000, while a 1% RETT with a $1M exclusion would only be $29,000, a mere drop in the bucket of their $2.3M appreciation. But with county-wide sales of $2B annually, these can add up to tens of millions of dollars per year to help support affordable housing, reduce reliance on the property tax, and address other local needs. As a local option, Teton County can decide for itself the parameters that make sense and put it to a vote.

At the state level, we still need to enact long-term tax policy reform to wean ourselves off fossil fuels as a tax base. If we start soon, we can make a gradual transition to a broad, sustainable and equitable tax policy that works for our 21st century economy. And we can do a better job of investing the state’s $28B permanent funds for greater returns, keeping taxes low for all. If elected, that’s what I will work toward.

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