Midway through the fiscal year 2016-17 budget, the City of Cody’s sales and use tax revenue continues to head south as officials have predicted and feared.
The state government keeps 70 percent of all 4 percent sales and use tax revenues collected statewide. Towns, cities and counties share the remaining 30 percent.
“The biggest drop was the use tax,” Barry Cook, city administrator, said.
Use tax is assessed on items bought outside of Wyoming and brought into the state for use.
Finance officer Leslie Brumage reported a 39 percent decline in use taxes for the past six months. She compared the July-December 2016 total to the same time span in 2015.
Even though sales taxes have increased slightly, Brumage said when both taxes are combined, Cody’s tax receipts are 6.24 percent lower than a year ago.
That translates into a $105,241 revenue shortage to date, with the bulk ($103,996) coming from the use tax category. Every month from July-December has produced less revenue than the previous year, except September.
Cook attributed the “dramatic” use tax downturn to the energy industry’s current slump.
A Jan. 24 USA Today report lists Wyoming among six of eight top oil-pumping states hit by recession last year.
Cook said companies in the
mineral industry pay use tax when buying materials and supplies outside of Wyoming. When they scale back, less use tax is collected.
The negative effect is more substantial for energy dependent counties such as Campbell and Sublette. But the industry’s presence in Park County is reflected in the “huge drop” in use tax.
“It’s not people buying stuff in Wyoming,” he said. “What you’re seeing is [less] stuff purchased outside of the state and brought into Wyoming for use.”
Likewise, subsidiary companies working for the mineral industry have cut back on out-of-state purchases, resulting in what Cook described as a “trickle down effect,” further translating into less revenue for Cody and other Park County government entities.
It appears the downward trend is continuing into the new year. Cody received $26,706 less revenue this January compared to January 2016.
(Rhonda Schulte can be reached at email@example.com.)