What is the Sheridan County Capital Facilities Sales Tax?
The Sheridan County One Percent Specific Purpose Capital Facilities Tax (Capital Facilities Tax or Cap Tax) is an optional one-penny sales tax approved by Sheridan County voters. The Capital Facilities Tax is approved for a specific amount, for specific capital improvements to community infrastructure. Once the specified amount is raised, the tax automatically expires unless voters choose to renew the tax for additional infrastructure projects. Since 1989, Sheridan County voters have consistently voted to renew this tax. In that time, the tax has generated over $102 million for community infrastructure.
The Capital Facilities Tax renewal proposition on the November ballot is for a maximum of $40 million to be raised over an estimated 8 years.
Who pays the Capital Facilities Sales Tax?
Unlike property taxes, all purchasers of products and services in Sheridan County pay the Capital Facilities sales tax. Temporary employees in our communities, including those working in the construction and mineral development industries, are subject to the Capital Facilities Tax.
The Capital Facilities Tax applies only to items that are subject to sales and use tax. The Capital Facilities Tax does NOT apply to sales of most foods for domestic home consumption, rental payments, home purchases or gasoline purchases.
Out-of-county visitors and tourists also pay this tax on qualifying purchases.
How are Capital Facilities Tax revenues used?
Revenue from the Capital Facilities Tax is used exclusively to fund capital projects throughout Sheridan County. Often, this funding is also used to match grants to leverage additional infrastructure funding. Tax revenues cannot be used to fund operational expenses such as salaries, wages, administration or other items.
The Capital Facilities Tax:
- Maintains and improves county roads
- Replaces aging utilities and infrastructure
- Pays for pedestrian-safety improvements
- Builds bridges
- Re-paves degraded streets
- Leverages funding by matching other state and federal grants and loans
For a more detailed look at how these funds have been used in the past, please see the map on the Cap Tax In Your Neighborhood page.
How much of the revenue collected under the Capital Facilities Tax returns to Sheridan County?
While only 31% of the base sales tax of 4 cents per dollar returns to Sheridan County, 100% of the optional Capital Facilities Tax revenue goes directly to the county and municipalities.
How has the Capital Facilities Tax been used to leverage other funding?
Between FY2006 and FY 2013, Sheridan County used Capital Facilities Tax funds to leverage an additional $10.7 million in grants for infrastructure projects. This means that for every dollar of Capital Facilities Tax funds used for infrastructure projects, the County was able to get an additional $0.62. Put another way, by using the Capital Facilities Tax funds on grant projects, the County multiplied funding on those projects by an additional 62%.
Between FY2006 and FY2012, the City of Sheridan leveraged Capital Facilities Tax funds to secure an additional $13.9 million in grants and other funding. This translates to an extra $0.70 for every Capital Facilities Tax dollar used — a multiplier on Capital Facilities Tax Revenue of 70% on City of Sheridan projects.
Based on previous years’ history, grants and agency matches for county-wide infrastructure projects proposed for funding under the 2014 Capital Facilities Tax are projected at $23.5 million.
How is the total Capital Facilities Tax proposal determined?
The Capital Facilities Tax renewal amount has varied over the years (e.g., $25 million in 2009 and $35 million in 2003) and is determined based on needed infrastructure projects identified in the long-term capital improvement plans of the County and municipalities.
The 2013 renewal was proposed at $40 million to facilitate long-range planning. With smaller amounts, the total is reached sooner (in the past it has typically been 4-5 years), which does not provide much of a timeframe for long-range planning without assuming the tax will pass again. With this in mind, the County and municipalities have identified infrastructure projects both in the near-term and longer-term (out through about 8 years) that are eligible for Capital Facilities Tax funds, and then used the estimated cost of these projects in developing the $40 million total. Long-range planning also allows the entities more time to identify other funding sources and grant matches for specific projects to better leverage Capital Facilities Tax funding.
What happens if the Capital Facilities Sales Tax is not renewed?
Capital Facilities Tax funding helps to keep our key infrastructure (water, sewer, roads, etc.) in good condition to ensure that our roads are safe, that our waste is properly disposed of, and that our drinking water and our streams are clean and safe. This could include replacing aging water mains that keep breaking due to age, upgrading sewer mains to accommodate growth, or simply keeping county roads in passable and safe condition given the toll taken by Wyoming’s weather.
If the Capital Facilities Tax is not renewed, our water and sewer lines, roads, bridges and streets will continue to deteriorate. Without the Capital Facilities Tax, many of these projects would still need to be completed, but would have to be paid through other means by Sheridan County residents (e.g., increases in rates for water, sewer, waste disposal, etc.). Since it is a sales tax, the Capital Facilities Tax reduces our financial burden of maintaining and improving our infrastructure by sharing that burden with tourists, visitors and other non-residents who purchase goods and services in Sheridan County. Other means of funding, such as property taxes or increased utility rates, would fall more directly on Sheridan County residents and could potentially result in residents paying more per person towards infrastructure than they would through the Capital Facilities Tax.
Does Sheridan County have the highest sales tax rate in the state?
Sheridan County voters, like those in 10 other Wyoming counties, have opted to implement both a 1% general purpose and a 1% specific purpose (Capital Facilities) sales tax, and Washakie County carries the 1% specific purpose tax but not the 1% general purpose tax. Voters in Converse and Sweetwater counties approved an increase of their tax rate to 6% within the past year. In addition to the general purpose and specific purpose taxes, counties also have the option of implementing another tax for economic development; however, only Goshen County currently utilizes this tax.
Why have sales tax revenues declined so much in the last several years?
A 2011 report issued by the Wyoming Department of Revenue indicates that the large reduction in Sheridan County’s sales tax was due to significant contractions in the mining, construction and manufacturing industries. The mining industry alone represents roughly 60% of the drop in sales tax revenue since 2008.
Does Sheridan County’s reduced sales tax revenue indicate we are driving away sales through tax?
Nearly 2/3 of the drop in tax revenues since 2008 was in the mining industry, not consumer spending. Sheridan County, like Wyoming and the United States as a whole, was hard hit by the recession in 2008; however, like Wyoming and the United States, we are coming back. Many of the industries which were hardest hit in 2008 are slowing their decline, and others are showing signs of improvement. Consumer spending sectors actually showed an increase in revenue for the last year of data.