Members of the Appropriations Committee heard testimony Thursday on proposals that would change how sales tax receipts are distributed to cities, towns and counties, commonly referred to as direct distribution.

"Local governments deliver where it matters," said Steve Shockley, chairman of the Platte County Board of Commissioners, describing the services counties provide and the budget pressures they face. Shockley said Platte County's budget this year was about $14,800,000, of which roughly $3,000,000 was earmarked by the Legislature for specific purposes; the remainder — about $11,800,000 — supports everyday services such as a 27‑deputy sheriff's force, 10 road-and-bridge employees who maintain roughly 650 miles of county road and six 911 dispatchers.

Shockley told the committee that any further reductions in direct distribution funding "will result in reductions to our workforce and our services," and he estimated that a reduction in the local-government share discussed in committee — from 8% to about 5.76% in one scenario cited — would cost Platte County approximately $214,500. He said program cuts he was considering would total about $322,000 if positions or services were eliminated.

Ashley Harp Street, executive director of the Wyoming Association of Municipalities, representing 99 cities and towns, told the committee municipalities rely on predictable revenue streams and have already absorbed losses from several sources, including the 2007 grocery‑tax exemption, declines in severance tax and federal mineral royalty receipts, and the loss of consensus block funding for some infrastructure projects.

Senators and representatives asked witnesses how local governments would respond if the economy declined sharply and distributions dropped. Witnesses said predictability helps municipal planning but that extraordinary downturns — for example, the COVID‑era revenue collapse — previously led to requests for state assistance. "We're going to have to turn with it just like you will at the state level," Ashley Harp Street said.

Committee members also questioned how an allocation mechanism known as the Madden formula affects county distributions. A witness identified Bighorn, Crook, Goshen, Hot Springs, Niobrara, Platte, Washakie and Weston as counties that qualify as "hardship" counties under the formula because they cannot raise $300,000 per mill. The witness said the county portion of the Madden calculation has been stable in recent years and that counties generally oppose changes to that portion of the methodology.

Brett Fanning, director of the Wyoming Department of Revenue, told the committee the department does not run the Madden model; Office of State Lands and Investments (OSLI) holds the formal model and finalizes the numbers. He said payments are made in two installments — roughly Aug. 15 and Jan. 15 — after OSLI completes its calculations using the latest sales‑tax and property‑tax data and the decennial census when applicable.

Fanning and committee members also discussed whether the Legislature should commission a dynamic economic study to model behavioral responses to changes in sales tax rates (for example, proposals to replace some property tax with sales tax). Fanning said deep, dynamic modeling is often done by outside economic consultants but the Department of Revenue can help assemble historical examples and partner with legislative staff; he cited recent local examples where municipal-option rates changed (City of Casper from 5% to 6%, Fremont County moving an economic-development tax from 5.5% to 5%, and Teton County from 6% to 7%) and said short-term data did not show large, immediate revenue losses in those cases.

The committee did not take action; the chair said staff would "huddle" and take up directives the next day after gathering additional data, including county property‑value information and the estimates for backfilling the grocery tax exemption, which a committee member estimated at roughly $33.4 million per year under current inflation-adjusted calculations.