Across Wyoming, many local governments are dissatisfied with the steep property tax cuts passed by the Legislature earlier this year, claiming they are struggling to keep services running.
At the same time, supporters of tax cuts argue that they force governments to be frugal, live within their means, and trim the fat from their budgets.
Khale Lenhart, former Laramie County GOP Chair, has been one of the voices advocating for local governments to make up the shortfall.
In March, Gov. Mark Gordon signed Senate File 69, which establishes a permanent 25% property tax exemption for the first $1 million in value of a single-family home.
The final bill did not include a provision to compensate local governments for lost revenue, which was a source of heated debate during the legislative session.
As a result, Lenhart contends that small Wyoming counties and towns are being forced to choose between critical government services as they scramble to fill the gaps.
He is now fighting to raise awareness about the issue as legislators consider raising the tax cut to as much as 50%.
Small towns, big cuts.
Public schools receive 70% of property taxes, with the remainder going to local governments.
According to Lenhart, Wyoming’s smallest jurisdictions bear the brunt of the Legislature’s cuts as their small budgets tighten. Lenhart stated that this could force local governments to make difficult decisions about which services to provide.
“These small communities are going to have problems providing the same level of government function that you had before,” Lenhart told Cowboy State Daily.
Guernsey, for example, relies solely on residential property taxes to generate revenue. While the town is likely in need of a new water and sewer system, Lenhart believes the tax cuts make this impossible.
“I don’t see any way Guernsey continues to be a habitable place without going to the state Legislature for other funding,” he told me.
To cover the property tax shortfall, Lenhart said the state could consider raising the sales tax, but the amount would be “astronomical.”
Lenhart also suggested that restoring a state income tax could be another way to address revenue shortfalls.
“If you’re saying, ‘We’re cutting property taxes and you need to raise money elsewhere,’ there’s only so many options, and that’s one of them,” he told me. “That’s one of the reasons I don’t think it makes sense to say, ‘Let’s save everyone a few hundred bucks on property taxes but then be forced to impose a state income tax later.'”
“I believe that is a step backwards. “Using an axe rather than a scalpel here has the potential to cause far more harm than good.”
Delayed Impact
When Gordon signed SF 69, he indicated that he did so on behalf of tax-weary residents. It was a tax break the people of Wyoming wanted.
However, he also mentioned that it would be up to local governments to make up the difference.
“I have always supported tax accountability, and this bill provides tax relief without transferring the burden to our core energy industry,” Gordon told reporters. “This act, along with the bills I signed last year, addresses the need for property tax relief.
“Now the practical impacts of this legislation will need to be navigated by our cities, counties, special districts and citizens.”
Former state House Speaker Tom Lubnau told Cowboy State Daily that the full extent of the property tax impacts would not be known until it was far too late.
“There is a time lag in the revenue, because most communities are operating off of last year’s tax schedules,” he told me in an email. “Because the new tax cuts did not go into effect until this summer, the full impact will not be felt until the following year. We’re only seeing the beginning.”
Lubnau also mentioned a potential state income tax, but warned that such a solution would be extremely unpopular.
“While I find that suggesting an income tax (is) disgusting, the approach to curry favor with the voters is ultimately going to end up creating a state income tax,” said the legislator.
“Despite what the proponents of the tax cuts claim as political slogans, Wyoming government has generally operated frugally for many years,” the governor said. “No significant fat can be cut from the budget to pay for the tax cuts.”
County Impacts
Laramie County Commissioner Gunner Malm told Cowboy State Daily that he is seeing the effects of the tax cut in other counties around the state.
“You see Big Horn County had to cut a bunch of stuff from various departments from their emergency management to their library,” according to him. “You saw Hot Springs County have to reduce their commitment to 4-H education, which is a huge part of Wyoming’s culture and legacy.”
Malm also noted that Wyoming’s population is increasing but its revenue is not keeping up. This, he said, could contribute to areas of the state that are not adequately policed due to a lack of law enforcement officers.
Other emergency services, such as ambulances, are also affected by the revenue reduction, according to Malm. This forces small-town emergency services to expand their service areas, potentially leading to longer wait times.
Malm also addressed concerns that high property taxes may cause homeowners to lose their homes. He claimed that Laramie County has never evicted anyone for failing to pay their property taxes.
“I don’t think the vast majority of Wyomingites that I speak to are unhappy with their property taxes and what they get for them,” Malm told me. “They understand that the taxes they pay in, in comparison to the services they receive, are greatly weighted in favor of services received.”
Where’s the Fat?
While state legislators supporting the cuts argue that Wyoming’s local and county governments have become overburdened with tax dollars, Malm says he has repeatedly offered them the opportunity to audit Laramie County’s budget.
“We said, ‘Come and sit down with us and show us in our budget what you think is bloat and what you think we could,’ and not a single one of them was interested in doing that,” said the politician.
Weston County Assessor Kara Lenardson told Cowboy State Daily that her county has also experienced an impact.
“The certified 2025 county assessed valuation is $172,438,668,” she stated via email. “It is down approximately 11.4% from last year’s $194,517,316.”
This evaluation, she explained, consists of both local and state components.
“From last year to this year, our local assessed was down approximately 14.1% and our state assessed was down approximately 8.3%.”
Lenardson estimated that Weston County lost $1,362,300 after implementing the state’s tax exemptions.
Local Impacts
Nate Martin, executive director of advocacy group Better Wyoming, expressed concern with the local impacts of property tax cuts.
“You’re taking already tight budgets and just squeezing them even further,” Martin told Cowboy State Daily.
Lawmakers may be forced to institute other painful taxes, such as a grocery tax, to make up for the shortfall, he said.
“These things aren’t free, you know,” he said of critical government services like emergency medical. “We have to have a tax base, so if you start cutting property taxes, or even abolishing property taxes, you’re going to have to see some of these other things.
“I don’t think the people of Wyoming want a grocery tax.”
Cheyenne City Councilman Mark Rinne told Cowboy State Daily even the capital city is feeling the impacts of the lost tax revenue.
He estimated the city took a $1.5 million hit to its budget after implementing the tax exemption, which could rise as high as $1.8 million.
He said a potential 50% cut that will be on the 2026 ballot would make matters much worse.
“We’ve managed to absorb those somewhat this year,” he said. “If the amendment to the Constitution that reduces it by 50% passes, it’ll probably double that impact, somewhere between $3 million to $3.6 million impact on our budget.”
If this were to happen, Rinne said, Cheyenne would continue to prioritize emergency services such as fire and medical. Residents would begin to feel the cuts in places like public parks and other city property.
“The city is growing in land size, not just population size,” Rinne said. “The $3.5 million dollars would probably allow us to hire either 15 firefighters or 15 police officers. As we expand in area and size we gotta add coverage for fire and police.”
Lubnau also noted the severe impact a 50% cut could pose to small towns, telling Cowboy State Daily critical services would become unreachable.
“If the Legislature does not figure out funding mechanisms, or reallocate funds from other sources, you will see hospital closures, termination of services like parks, libraries, limited police and fire responses, reduced snow plowing and deferred maintenance of streets and roads,” Lubnau said.
To implement a deeper cut, even one as large as 33%, would require substantial work from state leaders, Lubnau added.
“To do so, they would need to cut $2 billion dollars of government expenditures, which would mean huge cuts in education, health care, highways, prisons, law enforcement, fire and other essential government services,” he wrote.
“The ripple effect throughout the state would be traumatic to say the least.”
Busting Budget Bloat
State Sen. Troy McKeown, R- Gillette, who co-chairs the Legislature’s interim Joint Revenue Committee, told Cowboy State Daily he was a key supporter of the bill to cut property taxes and is continuing to search for ways to eliminate residential property tax altogether.
McKeown stated that such a step is necessary because many of the state’s larger jurisdictions would see budget adjustments of 1% or less while returning money to Wyoming taxpayers.
“It’s such a minute cut, it’s not even funny,” explained the actor.
The tax cuts came at a time when many cities are seeing increased revenue from other sources, he said.
Wyoming property taxes, he added, had risen significantly over the last five years, despite being influenced by national inflation.
Even smaller towns, the senator argued, “aren’t upset” with the property tax cuts, and that opposition from figures like Lenhart is being exaggerated.
In “some to most cases,” McKeown continued, much of the lost money comes from severely bloated budget areas that have long needed to be reduced. Wyoming’s government had grown to an unsustainable size before the cuts.
While he did not use the word “wasteful,” the senator did describe Wyoming’s government as “extravagant.”
“It means older people aren’t losing their houses,” McKeown said of the effects of his tax cuts. “There were people who were worried about paying their taxes. “They chose food over property taxes.”
When asked about the possibility of implementing a state income tax, the chairman said the chances of that happening in Wyoming are slim to none.
“That won’t get out of my committee,” said the senator. “It really comes down to a question: are my constituents more important than government?”
He said the answer is “a resounding ‘hell yes.'”
During the state Senate floor debate on the cuts earlier this year, some lawmakers expressed concern that if they did not enact the reduction, Wyomingites would draft and pass a ballot measure to do so themselves – and more drastically.
That was after the proposed ballot measures were circulated.
In addition, voters approved a ballot measure in 2024 to amend the Wyoming Constitution to include a separate category for residential property taxes. The legislature had put that on the ballot through a 2023 resolution.
Sen. Charlie Scott, R-Casper, expressed concern on the Senate floor in January. He stated that his constituents, particularly the elderly and young families, had been clamoring for the reduction.
“I’m afraid if we don’t do this, come the 2026 election, we’ll see it imposed on us from the outside without the limitation on the large expensive homes, so it would reach the large expensive homes that are owned by people who don’t need this kind of exemption,” according to Scott. “This makes this a real alternative to that, that would satisfy the needs, satisfy it early; reach the people that would be helped by it.”
