Catch Title: HB0107 Local government distributions

Sponsor: Joint Appropriations Committee

Effective Date: July 1, 2026

Bill URL: https://wyoleg.gov/2026/Introduced/HB0107.pdf

Overview

HB0107 creates a permanent statutory mechanism to fund Wyoming cities, towns, and counties by distributing 5.6% of the state’s total collected sales and use taxes from the preceding fiscal year. This replaces the current system of discretionary biennial appropriations with a continuous transfer to the Office of State Lands and Investments. The bill introduces complex mathematical formulas to distribute these funds, prioritizing municipalities with lower per capita tax revenues or assessed valuations (the “revenue challenged” and “supplemental” formulas).

Key Provisions

• Continuous Appropriation: Mandates an annual transfer of 5.6% of statewide sales and use taxes collected in the prior fiscal year for local distribution.
• Distribution Split: Direct distributions are divided into:
  • 89% of the total: Two-thirds to cities/towns and one-third to counties.
  • 11% of the total: Divided equally between cities/towns and counties (5.5% each).
• Municipal Minimums: Small municipalities (population 35 or less) receive a base of $15,000, while larger ones receive $35,000 before the formula applies.
• Supplemental Formulas: Establishes a “Municipal Supplemental Funding Formula” weighted 75% on inverse per capita sales/use tax and 25% on inverse per capita assessed value.
• County Supplemental Formula: Establishes a county-specific formula weighted 24% on inverse per capita sales/use tax and 76% on inverse per capita assessed value.
• Revenue Challenged Formula: Allocates 5% of municipal funding specifically to cities and towns falling into the lowest quartile of per capita revenue to bring them up to the quartile average.
• Payment Schedule: Distributions are made in two equal installments on October 15 and March 15.

Implications

• Budgetary Predictability: Codifying the formula provides local governments with more long-term certainty than biennial legislative battles, though revenue will now fluctuate directly with state tax collections.
• Personnel Restrictions: The “Legislative Intent” section strictly forbids using these distributed funds for raises, new personnel, or increased benefits, effectively forcing cities to use this money for infrastructure or equipment rather than operations.
• Significant General Fund Impact: The bill is expected to decrease General Fund revenue by over $52 million annually, shifting that burden to state-level programs while bolstering local coffers.
• Complex Administration: The Office of State Lands and Investments must perform highly technical multi-step calculations annually, including inversing and normalizing indices for over 100 municipalities and counties.
• Support for “Poorer” Counties: The county formula includes a specific “cost of government index” and extra support for counties where a single mill generates less than $300,000, ensuring minimal service levels in mineral-poor areas.