The 'bottom line' in Wyoming governor's race
By Tom Stroock, Casper
There are eight candidates from the two major parties presently
seeking election to be our governor. I am personally acquainted
with five of them and can say that all are concerned, hard-working
Wyomingites of integrity and ability.
The primary and general election contests should make public
the differences among them on the serious issues Wyoming faces.
The candidates ought to debate the policies each will use
and the actions each will take to improve education, health
care, our environment, transportation and job opportunities.
Before the elections we must ask that the candidates explain
their views on the protections for, access to and development
of state lands; on the improvement of hospital insurance,
workers compensation and rural health care; on the progress
of the university and the community colleges. We need to ask
the most specific of questions: If elected governor, how will
you pay for the things you want to accomplish?
What changes, additions or corrections do you wish to make
in the tax structure of Wyoming? It is my opinion, based on
17 years of service in state government, that the new governor
will have to look only two places to improve the revenues
that will be needed. These two are: full, fair, timely and
properly audited collection of all the presently existing
taxes that should be collected from the oil, gas, coal and
mineral industries and, as well, a licensing fee on the transportation
of Wyoming coal. This fee must be constructed so that it does
not interfere with the protection of interstate commerce required
by the United States Constitution.
If we do just those two things, there will be no need
to raise anyone's taxes in any amount or add any new taxation
of any kind.
On the first point, it is unfortunately true that
the state and the counties are foregoing millions of dollars
in state royalties, federal royalties, severance taxes and
ad valorem taxes due and payable under existing statutes.
Wyoming does not now possess the legal or audit capabilities
necessary to make sure that we are being properly paid - so
we are not.
We presently operate on a so-called "honor system."
The mineral taxpayers report their production and the prices
claimed to the taxing and royalty receiving authorities and
then follow this up with checks to cover the reported amounts.
The state and the counties only have enough auditing staff
and expertise to ensure that the checks are equal to the reported
amounts. Most other states conduct detailed field and office
audits on their taxpaying companies.
With few exceptions, we don't. When Jim Griffith was state
auditor, he did conduct detailed state royalty audits. He
found that for each dollar paid out in salaries and expenses
to an auditor, Wyoming received more than $18 of increased
revenue in return. A return of 18-1 would be a pretty good
investment for the next administration.
The attorney general's office does not have enough staff
to pursue any underpayments that are detected, nor are there
sufficient attorneys to ensure that mineral taxpayers do not
take advantage of improper deductions or inter-company fund
transfers in order to avoid or underpay taxes and royalties.
Enron and its associated entities are not the only companies
making state royalty and tax payments, but they are among
the largest. There is good reason to suspect that they have
not treated Wyoming any better than they have treated California.
Enron is also not the only outfit that can indulge in creative
accounting to take advantage of our inefficiencies. Any private
Wyoming royalty owner who has studied his royalty payment
check stubs can testify to the fact that many deductions are
taken by out-of-state mineral taxpayers which are certainly
confusing, perhaps unauthorized and definitely require audit
and legal investigation. As President Reagan advised in a
different context, we should "trust but verify."
On the second point, the new governor will be dealing
with a monopoly controlled by the only two railroads that
now can ship coal out of Wyoming because of our past failures
to authorize and build coal-slurry pipelines. The coal miners
are receiving prices that average out at about $5 per ton
for their product. The railroad companies are receiving prices
that exceed $20 a ton for their transportation services.
We should carefully research and investigate our ability
to levy a licensing fee to transport Wyoming coal across Wyoming
land. The present tax system does almost nothing to benefit
99 percent of Wyoming's people - because less than 1 percent
of us work for the railroads. If we can summon up the political
will, the professional capabilities and the individual independence
and initiative of which we are so proud, we should be able
to add the sources of income described above to existing state
revenues. We can use them, together, to fund the protection
of public health, the improvement of Wyoming schools, the
development of Wyoming businesses and the enhancement of Wyoming's
quality of life.
We can correctly answer the question posed by the late Mike
Leon of Sheridan, "Why make Wyoming like everyplace else
when everyplace else wants to be like Wyoming?"
First appeared in the Casper Star-Tribune May 23, 2002
Tom Stroock is a monthly columnist for the Star-Tribune
and can be replied to by fax: (307) 234-6924.
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Authorized by William C. Sniffin
Contributions or gifts to Bill Sniffin for Governor 2002 are
not tax-deductible.
Bill Sniffin for Governor - P.O. Box 900 Lander, WY 82520
(307) 332-3111, ext. 17
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