By Jasmine Hall
Jackson Hole News&Guide
Via- Wyoming News Exchange

JACKSON — At least $181 million in tax revenue from Teton County that goes toward public services and schools could be lost annually if the Wyoming Legislature and voters eliminate residential property taxes altogether.

The Legislature’s Revenue Committee voted on Wednesday to sponsor a constitutional amendment that would repeal residential property taxes.

The money would go back into taxpayers’ pockets but could result in their paying in other ways; lawmakers also backed a trigger bill that would raise the state sales tax rate 2% to try to replace revenue.

These were two of many property tax measures the committee considered and will go before lawmakers in the 2026 budget session.

“We’re all scratching our heads,” Teton County Treasurer Katie Smits said on Friday after seeing the bills come out of the Revenue Committee this past week.

The bulk of the loss would be in education, according to calculations from the Teton County Assessor’s Office. More than $141 million out of the $181 million collected this year in Teton County goes to schools or children in one way or another, whether that be the $38.4 million for the State School Foundation or the $2.8 million that goes toward the Teton County School District recreation fund.

But the Assessor’s Office found that the Teton County General Fund would lose at least $25 million, which Treasurer Smits said is about a third of the county’s general fund budget. Other big hits in the community would be a $9 million cut to the hospital’s budget and a $3.2 million reduction for Teton County Weed and Pest.

Teton County wouldn’t be the only one to face cuts. Wyoming Legislative Service fiscal analysts estimated the impact statewide would be around $644 million per year, based on tax year 2025 assessments and mill levies.

Lawmakers are trying to mitigate this loss with a possible raise in sales taxes, but Teton County Assessor Melissa Shinkle and Smits doubt the funding could be made up just by increasing the sales tax 2%.

One percent, or one penny, of sales tax equals $25 million in revenue per year in Teton County, Smits said. There is currently a 7% sales tax in Teton County, and raising it to 9% would increase funding by only $50 million per year.

But Smits said that $50 million wouldn’t go straight back to the community. There’s a tax “waterfall.” 

Of the 7% in sales tax collected right now, 4% goes to the state’s general fund, 1% goes directly to the town and county operations and 2% goes to specific purpose excise tax (SPET) projects that voters approve. A little less than a third of the money that goes to the state also trickles its way back into the town and county budgets.

None of that goes to schools, according to the sales tax breakdown.

Smits wondered if the state will raise the portion of the sales tax it receives in order to fill gaps for education, but she doesn’t know right now what could happen next.

The goal has been to take the pressure off of Wyoming residents struggling to pay their increasing property tax bills, but Shinkle said replacing that bill with additional sales tax could create new issues.

A sales tax on goods and services is considered “regressive,” meaning it is considered most harmful to people with lower incomes at checkout. Shinkle said the Legislature may even decide it needs to reevaluate its tax break on groceries and services.

“A wealthy person paying an extra 2% sales tax is probably not going to feel it,” she said.

The Legislature has also spent the past few years passing a swath of property tax relief bills that assessors have been working to implement. Exemptions led to a $44 million revenue loss in Teton County this year alone. Lawmakers are still not done reevaluating the state’s tax system, all while a 50% residential property tax cut ballot initiative is coming down the pipeline in 2026. Voters will get to decide whether to pass the exemption.

It would be one of two ballot measures in the November 2026 election dealing with property taxes if the Wyoming Legislature also passes the constitutional amendment eliminating all property taxes. A constitutional amendment requires voter approval.