PINEDALE – Once more, Sublette County Treasurer Emily Paravicini approached the Sublette County Board of Commissioners on July 20. She arrived with fresh fiscal numbers showing the local impacts of Senate File 60 and what the board’s decision on an exemption from monthly ad valorem tax payments.
Two weeks after commissioner Tom Noble said he’d like to take a closer look at the numbers, after commissioner Doug Vickrey voiced his apprehension to granting exemptions and after commissioner Sam White sat through yet another discussion he started unsympathetic to, they all voted in favor by the time Paravicini was done.
She laid out numbers in front of the board, showing the actual financial impacts of not granting an exemption from monthly ad valorem tax payments. She said she first did the spreadsheet with 2020 numbers and said the shortfall would be $16 million with the exemption. The shortfall without the exemption would be closer to $26 million.
Then, Paravicini got the information for 2021’s anticipated numbers in to tabulate a more current comparison. Granting exemptions under that fiscal year would have resulted in a budget shortfall of $10 million – compared to $18 million if they granted no exemptions at all. Those were total numbers. Sublette County, specifically, would see a $1.5-million shortfall allowing exemptions, compared to $2.8 million if the board elected to not grant exemptions.
“We’re only a small piece of the pie, we’re 16 percent of what we collect,” Paravicini said. “So, the ones that it’s really going to hit are, of course, the schools.”
She explained that Sublette County School District 1’s budget shortfall would be just over $6 million if the commissioners elected to not seek exemptions. With exemptions, that shortfall is closer to $4 million.
Commissioner Dave Stephens asked how it would affect Sublette County School District 9. Paravicini said, with an exemption, that district’s shortfall would be $297,000 – with no exemption it is a $1.6-million shortfall.
Exemptions will help bridge the short-term gap, according to numbers presented. But Senate File 60 conditions, and PureWest (aka UP Energy, aka Ultra) not applying for an exemption, will cost the county a $2.5-million shortfall, based on Paravicini’s calculations. In anticipation of the shortfall, an additional $1 million was placed in the shortfall reserve county.
More than likely, this is a fix for this year and the Wyoming State Legislature will make changes to the tax structure when it convenes in early 2022, Paravicini said. Commissioner Sam White said it would make sense to change the sunset provision from three years to one, which Paravicini agreed. Changing that sunset to a year would also allow producers freedom if a new tax structure benefits them more than an exemption.
“We didn’t think it was going to get worse one year ago when they did House Bill 159,” said Paravicini, “then when Senate File 60 passed, it was worse. For all the county.”
Commission chair Joel Bousman said he’d suggest a task force to Gov. Mark Gordon with the sole focus of looking at simplifying the energy tax code. He said that would reduce NOVCs and audits significantly.
White said he was against the exemption the whole way going in but after hearing those numbers he’d support granting the exemption on the condition of a one-year sunset date.
Deputy county attorney Clayton Melinkovich suggested making that sunset date end at the end of a calendar year, for ease.
The board then brought up a motion to approve the eight applicants (Huntington Energy LLC withdrew its application) with the change in a sunset date. The motion received a second and passed unanimously.