Tax break for Big Coal on table in House Revenue Committee

With falling natural gas prices and their deleterious effects on state revenue projections dominating budget discussions in Cheyenne, one would think the state would protect its other revenue sources. But that’s not what the Wyoming Legislature is doing. Instead, the House Revenue Committee will consider a proposal to change the method for valuing coal extracted in Wyoming that will result in a projected drop in coal severance and ad valorem tax revenues of about $12 million. The proposal, House Bill 38 – Coal severance tax industry factor, was proposed to the committee last fall by the Wyoming Mining Association. Industry claims the measure will put the mines on more equal footing. The ESPC submitted testimony opposing the bill but the Joint Revenue Interim Committee agreed to sponsor it. With all the worry lately over the drop in natural gas prices and the resulting fall in severance tax revenues to the state, now is not the time to throw money away. The House voted to introduce the bill Monday. The House Revenue Committee will consider HB38 Wednesday (Feb. 15) at 8 a.m. The value of coal is set using a valuation method called “proportionate profits.” (See our Coal Valuation Fact Sheet.) Proportionate profits sorts out the direct costs of mining (which, as part of the value of the final product, are taxable) versus the direct costs of processing and transportation, which are not taxable. After decades of intensive mining in the Powder River Basin, mining costs generally are rising as the pits move further from the rail loadouts and the coal seams run deeper. This is hardly a surprise, since the producers had to file mining plans when they first got their permits many years ago. The producers want the Legislature to “fix” the direct cost ratio – that is, put a specific number in statute instead of allowing it to vary for each producer depending on each producer’s actual costs. Fixing the direct cost ratio will effectively hold down coal valuation and consequently the taxes levied on coal production. This comes on top of the following:
  • $22 million loss for the three years following adoption of the proportionate profits method in 1990 (compared to earlier collections);
  • expiration of 2% coal impact tax in 1987;
  • expiration of 1.5% capital facilities tax in 1993;
  • taxes limited on “high-cost” coal from 1987 forward; and
  • loss from reclassification of coal lease costs in 2002, initially estimated at about $4 million/year (severance and property) but now estimated at more than $10 million/year due to high amounts coal companies are bidding for leases.
It’s worth noting that production costs in Wyoming, even with the state taxes, are low compared to other coal fields in the nation. The coal industry competed successfully under a severance tax rate of 10.5% compared to the current 7%. The bill requires the Department of Revenue to compile data comparing the tax that would have been paid under the existing system to the tax paid under the formula mandated by HB38. Inexplicably, the department is not required to report the data to the Revenue Committee until Nov. 1, 2015.
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Gov. Mead opens Legislature’s budget session

The 61st Wyoming Legislature opened Monday with Gov. Matt Mead declaring, “The state of the State is strong.” Wyoming must plan for lower revenues from natural gas extraction, he said. But he said the state remains strong financially and still has many options to explore thanks in large part to extraction of minerals worth more than $15.5 billion and a thriving tourism industry. The governor touched briefly on worker safety, a top priority of the Equality State Policy Center in the 2012 budget session. Mead asked the legislature to support his proposal, which includes a request that the legislature create five new positions for courtesy inspectors for OSHA. On courtesy inspections, those inspectors would assess work sites and identify potential hazards and violations of safety law but assess no penalties. The companies involved would be alerted and allowed a defined period to correct any violations. In his very positive State of the State message, the governor spoke of the need to concentrate more on technology to diversify the economy by building on the presence of the NCAR super-computer in Wyoming and expanding the availability of broadband across the state. He also urged careful examination of “value-added technologies” such as coal-to-liquids – a reference to the big DKRW coal-to-liquids plant proposed near Medicine Bow – and gas-to-liquids. Economic development will be improved, he said, through further investment in community infrastructure via the business-ready communities program. But the state’s ultimate economic prosperity depends on a high-quality public education system. He supported efforts to improve the system through a stronger core curriculum that is a state creation, rather than a federally mandated program. “We need more rigorous standards,” he said and more accountability in the schools and more accountability for parents. “Mediocrity is not acceptable,” he said. “Wyoming should strive to have a K-12 system that is second to none.” Conservation and funding of the Wildlife Trust Fund also featured prominently in the governor’s speech. He noted the fund helps keep ranchers on their land and pointed to a University of Wyoming study that said the fund creates about 500 jobs annually. The governor also said there is a legitimate case for pay raises for judges and custodians. Chief Justice of the Wyoming Supreme Court Marilyn Kite followed the governor’s speech with a reminder to legislators that judicial branch employees were not included in pay hikes recently approved for the executive branch. She noted that starting pay for new attorneys joining the Attorney General’s Office is considerably higher that the salary paid new attorneys hired at the Supreme Court. He also urged support of his effort to deal with water supply problems in Pavillion, highway funding, local government support, and Medicaid.

Introductions begin

Tax break for Big Coal

In a budget session, non-budget bills – other than redistricting measures that will be consider this year – require a two-thirds majority vote to be introduced for consideration. The ESPC opposes House Bill 38 – Coal Severance Tax Industry Factor. It was successfully introduced Monday and will go to the House Revenue Committee. The measure changes how coal is valued and will mean a loss of revenues exceeding $6.5 million in 2015, according to the bill’s fiscal note.

School finance hammered

House Bill 47 School Finance failed on introduction on a 30-30 vote. The bill included a regional cost adjustment that would have cost some local districts substantial amounts of state support. The Teton County school district would have lost millions that had been used to adjust teacher pay to compensate for the high cost of housing in that beautiful county. The measure is likely to be re-drafted and considered again but without the regional cost adjustment language, according to Wyoming Education Association observers.

So the session is launched

The ESPC will track many issues this year including worker safety, redistricting of the Legislature, an effort to eliminate public employee bargaining, proposals aimed at changing the state’s public pension system, health care, and public records and public meetings proposals. Please track this work here and watch for opportunities to support efforts to improve job safety, sustain retirees, build a better healthcare system, and keep government accountable to the people it serves.
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Welcome to our new website!

Ah, if you’re reading this it means our new website is live on the World Wide Web, also known to some of my friends as “the Internets.” We believe the new site will enable us to disseminate information about Wyoming policy matters more quickly than in the past and to assist our friends as they join the debate.

Some highlights:

  1. We’ve added a Take Action section. It provides information about the issues and suggests ideas for influencing the policy makers who will make the decisions. We’ll develop issue fact sheets and make these available to help people analyze an issue and put together thoughtful comments that they can deliver to directly to the decision-makers or offer to the public-at-large through letters to the editor or in other public forums.
  2. The new site will help us develop our alert list. You can easily sign up for the alerts. Having an accurate alert list will allow us to quickly contact interested people to let them know when an important issue is nearing a decision point and when public action is most effective. This will be particularly important during the legislative session.
  3. You’ll be able to track at least some of the news stories about the Equality State Policy Center and the issues we’re involved with. With communities scattered so widely, there are some stories that get play in one region of Wyoming but nowhere else.
It will still be possible to access archived materials via the Internets. There are parts of the first ESPC website that no long have active links. We’re sorry about that but we just don’t have the resources to keep everything running. That’s one of the things we decided we could sacrifice. We hope you’ll find the site easy to use. If you have suggestions for improvements, please let us know. We will continue to make improvements to the site and to add more materials in the weeks and months ahead. Please help us spread the word about the Equality State Policy Center and its work. Ask friends to take a look. We still run into people who don’t know about us but who like our goals and approaches to reach them. If we want the political climate to shift more towards the philosophical middle, we’re all going to have to join the debate and add our voices. The ESPC can help and will remain an independent voice for the people of Wyoming.
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What consumers want in an insurance exchange

Consumers want purchasing power

A Reality Check from Consumer Advocates: Project Healthcare

Our friends at Consumer Advocates: Project Healthcare offer the following guidelines and resources for consumers tracking the state’s development of the insurance exchange required under the Affordable Care Act. The Governor’s Office has scheduled a series of townhall meetings across the state to take comment on the exchange concept and on healthcare issues generally. Meetings are set in three towns this week, including Gillette, Evansville, and Cheyenne. All meetings start at 6 p.m. and end at 8 p.m.
  • Jan. 23 in Gillette at the Gillette College Presidential Hall.
  • Jan. 24 in Evansville at the Community Center.
  • Jan. 25 in Cheyenne at Laramie County Community College’s Centennial Room 130

CAPH’s assessment on insurance exchanges:

Every dollar in the healthcare system comes from consumers’ pockets whether through premiums, direct payments to providers or income taxes that fund Medicare and Medicaid. But we consumers rarely have enough information to actively influence this sector of the economy. The new federal healthcare law begins to change that.  While some insurance reforms have already been implemented a major change will begin on Jan. 1, 2014, when every state must have a new health insurance marketplace where individuals and small businesses can buy insurance.  A well-designed insurance exchange will give us access to the information we need to make discerning choices and that should motivate insurance companies to begin to actively compete for our business and loyalty. Wyoming must decide whether to build its own exchange, partner with other states or partner with the federal government to operate our exchange, CAPH urges decision-makers to focus on consumers and maximize this opportunity to strengthen benefits and provide important protections for all Wyoming citizens. Should the state establish its own exchange? CAPH believes the state should avoid putting into place a system designed by insurance companies. Let’s explore a federal /state partnership designed to deliver benefits of the exchange to citizens in a timely way with the ultimate goal of moving operations from the federal to the state level over time. We support the ‘no wrong door’ approach.  This allows people (individuals, families and small businesses) to find insurance no matter their income or where they start their search.  A single application will determine eligibility for public programs, calculate subsidies for those making less than 400% of federal poverty level or determine if an individual is exempt from the mandate to buy coverage. Exchanges should create a seamless interface with Medicaid and plan for continuity of care for those individuals moving between private and public insurance as income fluctuates. Essential benefits should be as robust as possible to protect individuals from being under-insured. Consumers just want insurance to work—to pay for the care we need when we need it and it should protect our assets, so we don’t lose our homes or savings if we get sick or injured.  No tricks. No surprises. No gotchas.  All insurance products sold in the exchange will provide a standard benefit package that provides comprehensive coverage.  Deductibles and co-pays will vary but will be clearly labeled so consumers know exactly what part of healthcare costs are their responsibility.   This standardization will make plans easier to compare and provide the security insurance was meant to provide. Insurance rules must ensure transparency and accountability.  Consumers should have access to all information that enables them to weigh the value of their plans such as how much of premiums are actually spent on medical claims vs. overhead, how often rate increases are requested, timeliness of claims payments and how often claims are denied and why. Consumer reviews and experiences should be easily accessible to all purchasers at the point of sale much like consumer reviews at internet travel sites. Create and enforce strong private insurance rules and guard against adverse selection. The state can make sure the same quality standards apply to all insurance plans, whether in the exchange or not. This guards against the possibility that cheap, low- value plans will draw healthy people outside the exchange. An exchange with only sick people will cause prices to soar and undermine the success of the exchange. Reserve the right for the exchange to serve as an active purchaser and not just accept all products offered for sale in the exchange.   Exchange administrators in Wyoming should be able – if they choose – to negotiate prices on plans that meet quality and value standards. This may be challenging in such a small state, but we should make sure it’s an option. This will help maximize market clout for consumers. Provide strong consumer advocates and ensure pro-consumer leadership. Many customers will need help navigating the exchange and understanding all the decisions to be made in buying insurance. People designing and operating the Wyoming exchange should continually evaluate consumer satisfaction and use consumer concerns to guide ongoing improvement of the system.  Consumers want expert, pro-consumer leadership that can go toe-to-toe with insurers and industry representatives. Exchanges should help to make healthcare in Wyoming more effective and efficient. Consumers expect to share in the overall goals of health reform: cost savings and improved quality of care. For more information on health reform and exchanges, check out these websites and articles:  Wyoprojecthealthcare.com  – Consumers can share their own healthcare stories here Community Catalyst – Exchanges: Top Ten Priorities for Consumer Advocates http://www.communitycatalyst.org/doc_store/publications/Exchanges_Top_Ten.pdf Kaiser Family Foundation –Explaining Healthcare Reform: what are insurance exchanges? http://www.kff.org/healthreform/upload/7908.pdf Families USA—Benefits of Exchanges http://familiesusa2.org/assets/pdfs/health-reform/Benefits-of-Exchanges.pdf National Academy for State Health Policy—Health Insurance Exchange Basics http://www.nashp.org/sites/default/files/health.insurance.exchange.basics.pdf Center on Budget and Policy Priorities—An analysis of state exchange legislation http://www.cbpp.org/files/CBPP-Analysis-of-Exchange-Legislation-Establishment-and-Governance.pdf
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Wyoming celebrates MLK/Equality Day

Rez Action sets march, speeches in Riverton

Other events planned in Casper, Cheyenne, and Laramie

State residents will celebrate Martin Luther King Day with in communities across Wyoming including in Riverton where Rez Action, a group working with the Equality State Policy Center, plans a march and speeches by three leaders of the Wind River tribes. “We invite all those who want to celebrate equality to march with us to honor the work of Dr. Martin Luther King, Jr.,” a news release from the organizers says. “We march in celebration of equality and Dr. King’s vision of ‘that all of us will be able to sit down together at the table of brotherhood.’” Other events are planned in Laramie and Casper. Tribal members Micah Lott and Molly Holt are two of the Rez Action members staging Monday’s “Embrace Equality Celebrate Diversity” event in Riverton. Participants will rendezvous at 1 p.m. at City Park for the march to City Hall. State Rep. Patrick Goggles, the House minority leader who represents HD33, will speak as well as former state representative Scott Ratliff, now an special assistant on Native American issues to U.S. Sen. Mike Enzi, Northern Arapaho tribal liaison Gary Collins, and Riverton activist Cody Green. For information, please contact Micah Lott at 307-851-1344 or micah.lott93 [at] gmail [dot] com. Rez Action members describe the group as an organization of “dedicated activists who fight social injustice, discrimination, and advocate for a healthy environment.” The Casper NAACP will host the annual Martin Luther King Jr. Day March and Rally starting at 11 a.m. at Casper’s City Park at Center and 7th streets. Marchers will walk to the United Methodist Church downtown. Eastern Shoshone Tribal elder Ivan Posey will speak. Members of the Wind River Unity Youth Council will participate as dancers with the Scout River Drum Group. Following a soup lunch at the church, the Unity group will conduct a workshop at 1 p.m. In Casper, contact Nurieh Glasgow at 234-3428 or Janet de Vries at 268-2446 for more information. A third march is planned on Jan. 16 in Laramie. Marchers will walk from the Albany County Courthouse to the University of Wyoming Student Union starting at 4 p.m. followed by a supper in the union ballroom. As part of its Martin Luther King Jr./Days of Dialogue, actor Hill Harper will speak at 1 pm. Jan 18 at the Wyoming College of Arts and Sciences auditorium. A full schedule of events is available here. In Cheyenne, a march is planned at Noon from the old Union Pacific Railroad Depot up Capitol Avenue to the state Capitol. Gov. Matt Mead and Mayor Rick Kaysen will speak along with State Auditor Cynthia Cloud, and State Supt. of Public Instruction Cindy Hill. The march is being organized by the Love and Charity Club. Contact moderator Rita Watson at 307-632-2338 for more information.

Adrenne Vetter, Molly Holt, and L’Dawn Olsen prepare banners for the “Embrace Equality” march in Riverton

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