Passage of Constitutional Amendment A by Wyoming voters in the Nov. 8 general election doesn’t put cities, towns and counties — and other political subdivisions of the state — on an overnight route to money in the bank.
It does provide investment possibilities to local governments that haven’t existed before. That, in itself, is a big step forward.
In fact, the heretofore limited earnings opportunities have been a vexing problem to local governments. The City of Powell’s experience with an endowment to provide for ongoing operation and maintenance funds for its aquatic center is a good example.
Almost 15 years ago, Park County voters passed a capital facilities tax issue that included $9.3 million for the new aquatic center project in Powell. The city’s “Pennies for a Pool” campaign in support of the $9.3 million cap tax wisely provided that $2 million of the total be set aside in endowed funds for future O&M.
Sadly, it has not proven adequate. Under the city’s limited investment authority, the $2 million endowment didn’t equal the needs at literally Certificate of Deposit rates. The city’s general fund budget has been called on for hundreds of thousands of dollars to subsidize pool operations.
That may not turn around overnight, but passage of Amendment A does provide new options, including the authorization to invest in the capital stock of public companies, i.e. the stock market. Of course, the stock market has its ups and downs. But it also has a track record of positive returns over three years, five years, 10 years and longer.
It’s important to understand that the Legislature is still in charge of creating the framework for how local governments can invest their funds. In the language of Amendment A, the Legislature “may “prescribe different investment conditions.”
Don’t look for the Legislature to get carried away. There may be a bill in the hopper for the next 2023 session, or it may be just “studied” for a year to have some kind of bill ready for the budget session of 2024. And anything the Legislature proposes as authority must be approved by two-thirds vote of both the House and the Senate.
This is a big moment for cities, towns and counties. It’s better to go slow to get it right.