S = R – E
Satisfaction Equals Reality Minus Expectations
– The Immodestly Named Schechter’s Equation for Life

It’s me again!

Bob Dylan had Highway 61 Revisited. For the past two weeks, Jackson Hole has had Highway 89 Repaved.

From 1901-1904, Picasso had his Blue Period of paintings. For the past two weeks, I’ve had my Asphalt Period of newsletters.

The most interesting thing about the Asphalt Period is that well over 100 people have written or stopped me to say how much they appreciate the updates. For me, this is an unbelievable amount of feedback. Ditto readership. This is my fourth missive in the Asphalt Period series (and I promise – no, really, I swear – it will be the last), and each has been opened by over 2,200 people, well over half my subscriber base.

Those reaching out fall into two camps. One is “grateful for the information; pissed off about the inconveniences.” The other is “Help me set my expectations. I can plan around the traffic hassles if I get the information ahead of time. That’s what you’ve given me, so thanks.”

Today’s final edition (no, really it is, I swear) is targeted at the latter group.

Here’s what to know about Highway 89 Repaved:

1. This week, crews will be paving the roughly one mile of Hwy. 89 between the Y intersection and the Flat Creek bridge (i.e., Broadway Avenue in the Town of Jackson from Albertson’s to Staples).
2. Yesterday (Monday, September 30) went really well, with crews paving the entire westbound righthand lane.
3. Assuming things continue to go well, here’s how things will play out the rest of the week:
   • Today (Tuesday, October 1) the westbound lefthand lane will be paved, as well as the northern half of the center turn lane.
     • This means one westbound lane will be closed between 8:00 am and 4:00 pm. As a result, traffic will be heavy during the afternoon rush hour.
   • Wednesday, the eastbound lefthand lane will be paved, as well as the southern half of the center turn lane.
     • This means one eastbound lane will be closed between 8:00 am and 4:00 pm. As a result, traffic will be heavy during the morning rush hour.
   • Thursday, the eastbound righthand lane will be paved, completing the job.
     • Ditto.
4. The last time Hwy. 89 was repaved was 25 years ago. Barring something unforeseen, the Wyoming Department of Transportation (WYDoT) anticipates the current paving will last a similar amount of time.
5. If you’re interested, you can view traffic on Broadway and Hwy. 22 in real time by accessing the WYDoT webcams mounted at the Y.
   • Go to https://map.wyoroad.info/wtimap/index.html
   • Zoom in on the Y intersection.
   • Click on the “Additional Layers” menu in the upper right of the screen
   • Click on “Web Cameras”
   • Click on the camera icon at the Y and you can see what’s happening in all four directions (the cameras are slow to automatically update, so you might want to refresh the screen yourself).

So that’s it. With luck, things will continue to go well the rest of the week, with traffic problems continuing to diminish each day. If they do, the project will be behind us by 4:00 pm on Thursday, October 3.

Two final notes.

First, for those of you living outside the Jackson Hole area, I realize how silly this Asphalt Period series has seemed. That reality was best captured in the comment I received from one urban-dwelling friend: “I’m reading about people stuck in traffic for 1/2 hour for one afternoon and I’m thinking ‘That’s my daily life.'” One of the embarrassments of life-in-the-Tetons riches is that big-city traffic is not something we’re used to. For those of you for whom it is commonplace, thanks for not judging us too harshly.

Second, this past week’s traffic congestion issues were striking because of their in-your-windshield quality. Most change doesn’t happen that fast, but over time Jackson Hole’s traffic has clearly become more onerous.

To that end, I did a quick bit of research into traffic and related growth. The results are below. Not an in-depth study by any means, but one I hope will offer you a bit of insight into how the Tetons region is growing and changing.

As always, thank you for your interest and support.

Jonathan Schechter
Executive Director

PS: As an audio treat for you, I tried to link the album cover below to the album. Alas, I failed: Neither Highway 61 Revisited nor any of its constituent songs are freely available on the internet.

Traffic Congestion in Jackson Hole

Is traffic congestion growing in Jackson Hole? And if so, what’s driving it (pun intended)? The obvious place to start is with counts.

WYDoT has automatic vehicle counters embedded in highways across the state. For this exercise I focused on average daily traffic counts for the three major entryways into the greater Jackson area: the Gros Ventre Junction north of town, the eastern base of Teton Pass, and the Snake River Canyon. To eliminate tourism variability, I used the figures from the slowest month of each year (usually January or February).

As Figure 1 shows, between 2018-2023 – i.e., from two years before the start of the COVID pandemic to two years after the vaccine tamped it down – there was a modest increase in traffic in the northern part of the Jackson Hole valley, and much sharper increases coming into the valley from neighboring communities.

Figure 2 makes two interesting points.

First, over the last five years Teton County, WY’s population hasn’t grown.

Second, over the last five years the increase in traffic from Star Valley and Teton County, ID was significantly greater than each county’s population growth.

So what’s going on?

Even though Teton County WY’s population has stagnated, our housing stock has grown nearly 10%. And helping contribute to the valley’s traffic woes, the number of vehicles registered in Teton County has grown faster still: Between 2018-2023, population grew a total of 0.4%; housing units grew 9.6%, and registered vehicles grew 11.0%. (Figure 3)

The biggest change, however, has come in Jackson Hole’s job growth. In 2018, Teton County had 1.45 jobs per capita; i.e., 1.45 jobs for every permanent resident, regardless of age, wealth, work status, or any other qualifier. In 2023, that figure was 1.85 jobs per capita, an increase of 27%.

To put those figures in context, Teton County’s 1.85 jobs/resident is roughly three times the national average, and its 27% growth during that period was roughly four times the national average. (Figure 4)

Who was filling those jobs? No doubt some of it was residents, particularly those working remotely. A great deal of it, however, was commuters. Who, for the most part, were driving themselves to work.

Ditto non-commuters, which we know from the fact that between 2018-2023, START bus ridership declined 10%. In particular, during the pandemic START ridership fell in half, and it has yet to return to pre-pandemic levels. (Figure 5)

While this quick-and-dirty exercise isn’t definitive, two points jump out.

First, over the last few years there has been an explosion of vehicles in Jackson Hole.

Some of those vehicles are owned by residents – our population hasn’t grown, but the number of vehicles we own sure has. Others of those vehicles are owned by the growing number of commuters working in the Jackson Hole valley, most of whom feel driving their own vehicle is the best way to get to work. And since there are far more jobs to be filled than new Jackson Hole residents to fill them, there has been a huge increase in the number of vehicles on the road.

Second, over the last few years there has not been a huge explosion in the capacity of Jackson Hole’s road system. True, a goodly stretch of Hwy. 89 south of town was widened to four lanes. But that’s it. And when you put a lot more vehicles on about the same amount of road, the result is – wait for it – increased traffic congestion.

So where does that leave us? In a bit of a dilemma.

In particular, we know what won’t work: Trying to grow our way out of the problem.

There are those, for example, who are arguing we need to build new roads or expand existing ones. Unfortunately, our geography makes that both difficult and expensive. Far worse, it would be a futile exercise. Why? Because in the same way Jackson Hole can’t build our way out of our housing problems, we can’t build our way out of our traffic problems. In both cases, supply will never catch up with demand (in transportation planning, this is referred to as “induced demand“).

Instead, what’s needed is an adaptation strategy. As I wrote about in the CoThrive that preceded the Asphalt Period newsletters, geography’s waning importance is dramatically changing the socio-economics of Jackson Hole. Rapid and profound changes in technology, the economy, transportation, values, and mores are radically affecting not just who lives here and what they do for a living, but pretty much every other factor of life in the Tetons, ranging from traffic to who can afford to visit the region.

And isn’t that a wonderful thing? As I write those words, I feel a surge of excitement, for this extraordinary time offers everyone who loves the Tetons an extraordinary opportunity – the chance to figure out how to harness the forces of change and direct them towards generational stewardship. The opportunity to take steps today to ensure a thriving community – both human and ecological – for generations to come.

In other words, the chance to figure out what it means to truly CoThrive. How great is that?

Hello, and happy September!

In 2012, I had the great good fortune to join a consulting team working in Namibia.

Our client was the World Wildlife Fund, whom we advised on their ecotourism-based conservation work. As a result, we spent a lot of time visiting off-the-grid ecolodges in remote areas of the country.

One day we drove for hours to the site of a proposed ecolodge. When we finally reached the campsite, the road had long-since disappeared and we were in a stunningly remote place. In fact, when I arose before dawn the next morning, a 360 degree sweep of the horizon revealed no lights or other signs of civilization. (See photo below.)

This was not true of our campsite, though. There, on top of a hill in the middle of nowhere, our hosts had erected lights, a large cooking tent, tables replete with china and high-end place settings, and a comfortable washroom. What really struck me, though, was not just the fully stocked bar, but the fact it was serving ice-cold Dom Perigon in a proper Champagne flute.

My cognitive dissonance was overwhelming. Long ago, a wine connoisseur drilled into me that Champagne is the acme of civilization, and Dom Perigon is the acme of Champagne. Yet there I was, in an incredibly isolated place, enjoying civilization at its most refined.

I share this story because, in a piece of foreshadowing I didn’t appreciate at the time, this “no place is too remote” moment set the stage for the essay below. The essay itself is a fleshing out of two talks I’ve recently given. More than that, though, it’s an exploration of an idea I’ve been mulling over for quite some time, namely how technological advances are rendering geographic isolation increasingly moot.

Introduction
Virtual Suburbanization
The 250 Year Precedent
Growth and Change in the Greater Yellowstone Ecosystem
Analysis and Discussion
21st Century Conservation
What To Do?
Chamber of Culture
Final Thought
Final Request

As always, thank you for your interest and support.

Jonathan Schechter
Executive Director

PS – As even a blind man can see, Jackson Hole offers residents and visitors alike an embarrassment of riches. For non-profit organizations such as my Charture Institute, one of the most important examples of this is the money raised through Old Bill’s Fun Run.

Put simply, the money Charture raises through Old Bill’s is vital to our operations. Among other things, it allow us to research and produce publications such as this CoThrive newsletter.

Will you please support CoThrive and our other efforts by donating to Charture through Old Bill’s? CLICK HERE to donate (donations are accepted through this Friday, September 13).

Thanks so very much.

Introduction

My professional life is shaped around two beliefs:

• Ultimately, a society can be no stronger than its institutions.
• Ultimately, a community can be no healthier than the ecosystem in which it lies.

I’m worried on both scores.

I worry about “no stronger than its institutions” because over the last several decades, we humans have demonstrated that institutions are far easier to tear down than they are to build and maintain. Thirty-plus years of Gallup polling drive home this point.

Each year, Gallup asks Americans how much confidence they have in 14 major US institutions. These range from Congress to Organized Religion; from Public Schools to Big Business. In 1993, 37% of Americans said they had “A Great Deal” or “Quite a Lot” of confidence in those 14 institutions. Today the figure is 28%.

Perhaps more disturbingly, at least one-third of Americans have a goodly amount of confidence in only three institutions: the Military (61% in 2024’s survey), Police (51%), and the Medical System (36%). Take out these three, and the overall percentage of Americans with confidence in the remaining 11 institutions drops to just 23%. (Figure 1)

I worry about “no healthier than its ecosystems” because along with tearing down institutions, we humans have also demonstrated we can be poor stewards of the ecosystems in which our communities lie.

In turn, these two beliefs inform the two concepts which frame much of my professional life:

• Virtual Suburbanization
• The 250 Year Precedent

Virtual Suburbanization

Virtual Suburbanization is the contemporary version of the Physical Suburbanization that hallmarked the United States following the Second World War.

In search of a better life, in the 1950s Americans began moving from major cities to the suburbs. This phenomenon was made possible by a combination of changes in the Big Five Forces driving suburbanization: technology, the economy, transportation, values, and mores.

In recent years, the same phenomenon has been occurring virtually.

In particular, over the past few decades changes in the same Big Five Forces – technology, the economy, transportation, values, and mores – have increasingly stretched, frayed, and severed the umbilical cord connecting where people live and work. As this process has occurred, the result has been a major and rapid redistribution of not just America’s population, but that of the world.

In short, abetted by the combined effects of the Big Five Forces, increasing numbers of people are cutting the umbilical cord, moving from less desirable places to those they find more attractive. For example, consider how America’s population has grown since the COVID pandemic struck in March, 2020.

In the same way COVID altered many aspects of life, the pandemic affected Virtual Suburbanization by greatly reducing the stigma associated with remote working.

As Figure 2 indicates, since the start of the pandemic the lightly-populated Rocky Mountain region – long known as a place people vacation rather than where they work – has experienced much faster population growth than the rest of the country. In increasing numbers, people seem to be saying “Why not live in the place I love spending time?” and then acting accordingly. Focus just on Colorado, Idaho, Montana, Utah, and Wyoming (i.e., remove the oddly slow-growing New Mexico from the mix), and it wasn’t just the Rocky Mountain states that saw the biggest population gains, but many of the least-populous, most-remote areas of those states.

Of the Five Big Forces driving Virtual Suburbanization, the most significant has been advances in technology.

If we use the number of patents issued by the US Patent Office as a proxy for the pace of technologic change, over half of all the patents ever issued have been issued since 1998; over one-quarter have been issued in just the past 10 years. (Figure 3)

The result of all these patents? Once-unimaginable changes in how we live our lives and conduct our business. (Table 1)

The 250 Year Precedent

Stated baldly, the “250 Year Precedent” is my belief that, in the 250+ years since the start of the Industrial Revolution, no place on Earth has developed a successful contemporary economy (i.e., a successful industrial or post-industrial economy) AND maintained a healthy, fully-intact ecosystem.

I say “stated baldly” because I also believe there is one exception to the 250 Year Precedent: the Greater Yellowstone Ecosystem in general, and the greater Tetons area in particular.

If I’m right, then 250+ years of precedent suggest that we in the GYE and Tetons region are at great risk of succumbing to larger economic forces and, however unintentionally, fundamentally compromising the health of the region’s ecosystem. On a global scale, it also suggests that, as the forces driving Virtual Suburbanization allow humans to develop previously inaccessible parts of the planet, Earth’s remaining fully functioning ecosystems face great peril.

In that context, it’s worthwhile to consider an argument advanced by, among others, the late biologist E.O. Wilson. Wilson posited that, to preserve the Earth’s fundamental ecological functions, 50% of the planet’s land and water needs to be protected from development. Yet what my experience in Namibia showed me is, that, thanks to modern technology, increasingly fewer places are immune to humans leaving their mark. In particular, as technology gets better and less expensive, the geographic barriers that once served as unbreachable bulwarks for conserving large ecosystems are being rendered increasingly moot.

To better understand what’s going on, let’s take a closer look at the Greater Yellowstone Ecosystem (GYE).

Growth and Change in the Greater Yellowstone Ecosystem

Founded in 1872, Yellowstone is the world’s oldest national park. One factor in its formation was the belief at the time that the proposed park’s 2.2 million acres lacked any economic value.

Over the years, scientists have come to realize that, biologically, Yellowstone’s ecosystem extends far beyond the park’s boundaries. Today, the Greater Yellowstone Ecosystem is defined as an area of around 22 million acres, ten times the size of the actual park. Centered around the park, the GYE includes all or part of 20 counties across three states. (Figure 4)

At the time of its founding, the Yellowstone area may not have had much economic value. Today, however, nearly five million people visit the park each year, producing over $800 million in regional economic activity.

And tourism’s economic value is only growing. In particular, between 1970-2024, Yellowstone’s annual visitation roughly doubled from 2.3 million people in 1970 to a projected 4.8 million in 2024. Over these 54 years, the average annual growth rate has been 1.4%. (Figure 5)

Growing even faster than park visitation has been the region’s population. In 1970, the 20 GYE counties had a combined population of around 231,000. In 2024, the population is estimated to be around 550,000, an average annual growth rate of 1.6% over those 54 years. (Figure 6)

Population growth in the GYE plateaued and dipped a bit in the 1980s, bottoming out in 1988, the year of the great Yellowstone fires. Since then, population has grown steadily, at a slightly faster rate than before the fires.

Perhaps not coincidentally, this period has also been hallmarked by the widespread adoption of cellphones, laptop computers, internet-based commerce, wi-fi, and other staples of current business practices. And again perhaps not coincidentally, during that time the GYE’s “Big Three” socio-economic indicators have all shown growth rates twice as fast as the nation as a whole. (Note: in this essay, I use constant dollar per capita income figures.) (Figure 7)

The GYE is not a monolith, however. Each of its 20 counties has its own distinct qualities and culture, including how much of it lies within the GYE. From this perspective, the counties can be grouped into three categories:

• Entirely within the GYE
  • Teton ID
  • Gallatin and Park MT
  • Teton WY
• Mostly within the GYE (over half of the county)
  • Bonneville, Clark, Fremont, and Madison ID
  • Madison MT
  • Lincoln, Park, and Sublette WY
• Partially within the GYE (less than half of the county)
  • Bear Lake and Caribou ID
  • Beaverhead, Carbon, Stillwater and Sweet Grass MT
  • Fremont and Hot Springs WY (Figure 8)

In the same way that the number of patents issued can serve as a crude proxy for the pace of technologic innovation, the amount of a county entirely within the GYE can serve as a crude proxy for how important the ecosystem is to the county’s economy, character, and attractiveness to residents and visitors. By this standard, the four “Entirely” counties are very closely tied to the ecosystem in which they lie, the eight “Mostlys” a bit less so, and the eight “Partiallys” a little less than that.

Using this filter, let’s revisit the three basic socioeconomic indicators noted above. (Please note that I’ve changed the starting date to 2001 to allow for the use of more granular data.)

As Figure 9 shows, between 2001-2022 the three different categories of GYE counties had very different population, income, and job growth characteristics. In each case, the Entirely counties enjoyed the most robust growth, with the Mostlys and Partiallys experiencing different growth profiles.

Why? What’s driving these difference?

As Figure 10 suggests, the forces of Virtual Suburbanization offer at least a partial answer. From the perspective of cutting the umbilical cord between where one works and lives, Investment Income is the most location-neutral type of income. Similarly, and by definition, Location-Neutral jobs such as those in finance, information, and professional services are the ones most easily done from anywhere.

Viewed through this lens, those people with the most ability to live wherever they want to live seem to favor the GYE’s “Entirely” counties; i.e., the places in the GYE whose characters and economies are most closely linked to the ecosystem in which they lie.

Even more striking is how these trends exploded during the COVID pandemic. Figure 11 looks at the same data as Figure 10, but focuses on the years 2018-2022; i.e., the four years surrounding the 2020 pandemic. While population growth rates during this stretch were about the same as over the previous two decades, the Entirely counties saw huge increases in Investment Income, and all three county types saw huge increases in Location-Neutral Jobs.4

Analysis and Discussion

I first moved to Jackson Hole in 1983. One of the first people I met told me she moved to the Tetons because it was the hardest-to-get-to place in the lower 48. A short while later, I learned that Teton County contained the most remote place in the continental United States: The Thorofare Valley is, as one person put it, around 30 miles away from the nearest lightbulb.

For over a century, this remoteness provided Jackson Hole and other wild places with an extraordinary buffer against outside economic and demographic forces. For most people, Jackson Hole was simply too far away – a magical vacation spot, but not a place where you wanted to live. Why? Because living there year-round required too many sacrifices: the climate was too harsh; the economy too small and narrow; friends and family too far away; and the combination of isolation and small population limited choices in everything from consumer goods to cultural opportunities.

Technology has changed much of that, requiring residents to make increasingly fewer sacrifices. Further, those changes are only accelerating. As a result, places such as Jackson Hole which used to rely on geographic isolation to insulate them from “the real world” are finding that isolation is being rendered increasingly moot. Indeed, in the same way an ebbing tide reveals that which was hidden underwater, technologic improvements are revealing the many positive qualities of living in places once considered the boondocks.

As that happens, people are flocking to places which, not too long ago, were considered too remote. Such is the nature of Virtual Suburbanization.

21st Century Conservation

Until I went there in 2012, I had no clue about Namibia’s astonishing success in restoring and conserving populations of endangered animals. You can find more details HERE (in writing) or HERE (videos).

For this essay, though, the important point is that when Namibia became a nation in 1990, it put wildlife conservation into the hands of its communities. Over the last 30+ years, those communities have developed culturally appropriate ways to combine ecosystem stewardship with economic health.

In contrast, while America’s conservation history also reflects local culture, that history goes back nearly two centuries: our nation’s first efforts to celebrate and conserve wild places can be traced back to New England in the first half of the 19th century (e.g., Thoreau lived at Walden Pond during the mid-1840s).

Like Namibia, America’s conservation efforts are grounded in our distinct values and culture. There, Namibia’s conservation is tightly integrated with the nation’s agricultural economy. Here, America’s conservation is grounded in property rights. America’s approach to land conservation also differs from Namibia’s in that the United States usually draws a clear distinction between the natural and human worlds (e.g., while Namibian land uses often combine agriculture and wildlife conservation, historically America has often removed indigenous peoples and long-time settlers from within the park when national parks have been established).

The fact that our thinking about conservation dates back two hundred years raises a question, though: For all its successes, how well-suited to the nation’s 21st century socio-economics is America’s 19th century approach to conservation?

The GYE hints at the problem. For its first 100 years or so, not much thought was given to the idea of an ecosystem beyond Yellowstone’s boundaries. A generation ago, the creation of the GYE concept was scientists’ way of formally recognizing that nature has no respect for political boundaries. In recent years, other scientists have strengthened the GYE concept in innumerable ways – for example, by identifying the tapestry of public and private lands animals use to migrate in and around the GYE.

As Virtual Suburbanization transforms the GYE, though, the development pressures on the region’s private lands are rapidly growing– particularly on those lands which are part of migration corridors. And if you share my belief that people rarely set out to destroy ecosystems, but instead slowly kill them through 1,000 nicks, the lesson of the 250 Year Precedent is that the great threat to ecosystem health is the slow-but-inexorable development of wildlife habitat, the blocking of migration corridors, and other stressors placed on an ecosystem’s key components. As that occurs and the ecosystem becomes compromised, so too do the economy and sense of community based on the ecosystem’s health.

What To Do?

If the great challenge facing this generation of GYE residents is to develop a 21st century approach to conservation, how should we approach the task? Arguably the necessary first step is to acknowledge the foundational realities affecting the effort, among which are:

• Powerful socio-economic forces are affecting the GYE and shaping its future.
  • The GYE’s future is being shaped by Virtual Suburbanization, which in turn makes ecosystems increasingly vulnerable to the 250 Year Precedent.
• Residents and visitors alike share an extraordinary passion for the GYE.
  • This does not, however, mean they share a vision of what the GYE is, can be, or should be.
• The region’s culture is shaped by a few key components including:
  • A belief in free markets and property rights.
  • A history of independence and self-reliance.
  • A tension between a deep conservation ethic and taking the region’s natural bounty for granted.
• Government has a role to play, but not a leadership role.
  • The federal government is too gridlocked and, as suggested by the Gallup data, too mistrusted.
  • State governments aren’t necessarily conservation-minded.
  • Local governments have few human, financial, and legal resources.

Added together, these realities suggest the need for a new entity. Since government isn’t the answer, and since the private sector’s incentives can be at odds with ecosystem stewardship, the default solution is a new non-profit organization.

For such an organization to succeed, though, it must have a scope, mandate, and perspective much broader and more integrative than those of a traditional non-profit. It can’t focus on just the well-being of commerce, or the community, or the environment. Instead, it must simultaneously focus on all three. On a community’s culture. A Chamber of Culture, if you will.

Chamber of Culture

“What will happen when California is filled by fifty millions of people, and its valuation is five times what it is now, and the wealth will be so great that you will find it difficult to know what to do with it? The day will, after all, have only twenty-four hours. Each man will have only one mouth, one pair of ears, and one pair of eyes. There will be more people – as many perhaps as the country can support – and the real question will not be about making more wealth or having more people, but whether the people will then be happier.”

Lord James Bryce, from a speech at U.C. Berkeley, 1909 (Bryce was a British diplomat and historian whose American Commonwealth (1888) is considered a classic study of government and politics.)

---

The term “Chamber of Culture” comes from my incredibly thoughtful friend Mike Geraci. Like a Chamber of Commerce, a Chamber of Culture would consist of entities advocating a shared goal. But in this case, the goal would be the simultaneous ecological, economic, and community health of a particular region.

To succeed, a Chamber of Culture will need to take two initial steps. These will form the foundation of all its future actions.

First, a successful Chamber of Culture will need tools to assess not just the health of each of its three facets – ecosystem, community, and economy – but the relationships between them.

Happily, in the GYE efforts are underway to develop ecosystem health indicators. No such efforts exist around community health, though, and the economic indicators we rely on – things like per capita income, taxable sales, and Gross Domestic Product – don’t really give us the insight we need to assess the interplay between the economy and the broader culture.

Second, a successful Chamber of Culture will need to figure out how to harness and work with, rather than fight against, the socio-economic trends sweeping over the region. Virtual Suburbanization is only going to gain in speed and intensity, and the 250 Year Precedent tells us what happens when we try to fight the forces of Virtual Suburbanization. If we can harness those forces towards a larger vision, though, great things can happen.

Final Thought

No one will ever care as much about the GYE as the people who live here. Yet today, more than twice as many people live in the region than lived here 50 years ago (in a half century, we’ve grown from around 250,000 to around 550,000 residents across the 20 GYE counties).

What’s striking, though, is that it took 31 years for the GYE to grow from 250,000 residents to 400,000; i.e., to add 150,000 people. Adding the next 150,000, though, has taken only 19 years. And there’s no reason to think that pace of growth is going to slow down.

Hence this generation’s great challenge and great opportunity. The great challenge is to harness the powers driving Virtual Suburbanization and use them, jujutsu-like, to counter the 250 Year Precedent. If that can happen, then we can embrace our great opportunity: figuring out how to have a 21st century community and economy that complement, rather than work against, a healthy ecosystem.

More than 21st century conservation, this would be 21st century stewardship. For those of us lucky enough to live in the GYE, it’s an opportunity afforded to no other place on Earth. Let’s embrace it!

Final Request

Among my skills is a knack for self-flagellation. And one thing I self-flagellate about a lot is that writing pieces like this always takes far longer than I think it should.

Turning lemons into lemonade, though, my delay in getting this newsletter out meant that, over the weekend, I could both attend Old Bill’s Fun Run and go biking in Grand Teton National Park.

If you ever despair about Jackson Hole’s future, I defy you to attend Old Bill’s and feel anything but the greatest joy and awe. Feel the joy at the boundless energy and enthusiasm of the participating non-profits’ staff and volunteers; awe at not just what they do, but the grace and excellence they bring to pursuing their missions.

Ditto spending time in the park. The only thing more uplifting than the delight on the faces and in the voices of visitors from around the world is the majesty of the scenery.

This is the spirit that animates this CoThrive newsletter and Charture’s other efforts. If you find value in it, please support us through Old Bill’s Fun Run. CLICK HERE to donate. Donations must be received by 5:00 pm MDT this Friday, September 13.

Hello, and happy start of summer!

For those of us in the Tetons area, summer has started with quite the bang.

On Monday, June 3, my colleagues and I on the Jackson Town Council passed a 120 day moratorium on applications for large new commercial buildings.

On Thursday, June 6, the Teton Pass road was temporarily closed by a crack in the asphalt about a mile west of the summit.

On Friday, June 7, Teton Pass was closed again when a mudslide covered the highway about a mile east of the Idaho state line.

On Saturday, June 8, the previously cracked portion of the Teton Pass road failed “catastrophically” when a large section of highway completely gave way. As a result, the Teton Pass road will be closed for at least another couple of weeks before a temporary detour can be built. When the road will be fully repaired is anyone’s guess,

Before the Teton Pass road began to crumble, I thought this newsletter would focus on the moratorium – it’s a big deal, especially for the larger questions it raises about the community’s trajectory.

I pivoted to the Pass collapse, though, because of its immediacy. The collapse also raises larger issues about the community’s trajectory, but those, too, will also have to wait for another day.

Instead, this edition of CoThrive will focus on what data can tell us about the effects of the Teton Pass closure. Broadly speaking, these fall into three buckets:

• Traffic;
• Taxable sales; and
• The effects on commuters.

What can’t be evaluated is how the road closure will affect the region’s overall economy. There are so many facets to the closure, so much uncertainty, and so little relevant data that it’s currently all-but-impossible to do anything more than speculate about the slide’s overall economic effect.

What can be done, though, is to talk about what matters most: How the slide will affect the thousands of Teton County, Idaho residents who work in Teton County, Wyoming.

(Note: As if the entire Teton Pass issue isn’t messy enough, things are made even more confusing by the fact that the road over the pass connects two different Teton counties. To make things a bit simpler, I will refer to Teton County, Wyoming as “Jackson Hole” and Teton County, Idaho as “Teton Valley.”)

My big take-away is that every day Teton Pass is closed, it’s costing the typical Teton Valley-to- Jackson Hole commuter $168: $88 in foregone wages and another $80 in additional driving costs. A total of $840/week for workers earning an average of $1,600/week.

Apply that $168 daily loss to the roughly 3,500 people commuting every day, and the aggregated daily cost of the slide to Teton Valley residents is around $600,000.

On top of that is the roughly $100,000/day it’s costing residents of Wyoming’s Star Valley. This is because their commute takes longer due to an extra 3,250 Teton Valley commuters driving the Star Valley-to-Jackson Hole road up the Snake River Canyon.

Things will get better when the temporary detour re-opens Teton Pass, but even then commuters will spend more time than usual getting from Teton Valley to Jackson Hole. If those taking the “detoured” route end up spending an extra 40 minutes/round trip, that extra time will cost Teton Valley commuters roughly $100,000 day.

On top of this, of course, is the yet-to-be-determined economic effects on not just Jackson Hole’s businesses, but those of the entire region. That figure will likely reach the millions, if not tens of millions. As I note, though, there’s currently no good way to estimate that final figure.

What is clear, though, is that because they depend on Teton Pass to link visitors staying in Idaho to Wyoming’s national parks, Teton Valley’s tourism businesses are far more vulnerable than those in Jackson Hole. As a result, they are likely to suffer the greatest economic harm from the slide.

All this is important. What really matters, though, is the human costs associated with the slide. In the blink of an eye, thousands of peoples’ lives have been disrupted, in many cases profoundly. Even after the temporary road is built, Teton Valley residents and the people they work for will have a more challenging life. Their time with family, their income, their ability to strike a work/life balance, and so much more will be compromised in ways we can only begin to imagine. All this is far more important than what will happen to the economy.

• Key Findings
• Traffic
• Taxable Sales
• Workers As Inputs
• Workers As Living, Breathing People
• The Costs
• Comment

As always, thank you for your interest and support.

Jonathan Schechter
Executive Director

PS – This is my first CoThrive newsletter in several months. Deepest thanks to those who’ve inquired about my well-being.

Happily, I’m healthy and doing well. Instead, I’ve gotten sidetracked by both other work priorities and the opportunity to do more traveling than I’ve enjoyed in years. The travel opportunities are going to continue through the end of summer, so please adjust your CoThrive-related expectations accordingly.

One other factor has also kept me from publishing this newsletter: my desire to say something meaningful.

By this I mean that over the past few months, I’ve taken several stabs at writing new CoThrives. Each time, though, I’ve been unhappy with the result. Why? Because I came to believe I wasn’t offering readers something truly meaningful.

Was I writing about something interesting? Arguably. But was it also insightful? Did it cast a new light on something that really mattered? Because I didn’t think so, I didn’t want to waste your time with it.

Put another way, in putting out these newsletters I try to focus on quality over quantity. I hope that resonates with you.

Key Findings

The table below summarizes my research into how the Teton Pass closure will affect the people living in Jackson Hole, Teton Valley, and Star Valley. It looks at three areas of interest: the overall economy, commuters, and traffic.

Traffic

Arguably, the Teton Pass road closure could have come at a worse time, but it’s hard to imagine how much worse. This is because two realities are equally true.

One reality is that, out of 3,118 counties in America, Teton County, WY ranks first in how much of its total income comes from investments. As a result, for residents as a whole, no county in America is less dependent on commerce.

The other reality is that the part of Jackson Hole’s economy that does rely on commerce is hyper-dependent on tourism. For example, in 2022, along with having the nation’s highest level of investment income Teton County WY also ranked in the top 1% of all counties in how many of its total jobs were related to tourism.

Because so many tourism-related jobs are hands-on, tourism businesses need to employ a lot of people. The industry’s economic model, though, often requires tourism businesses to pay relatively low wages.

Figure 1 captures this reality. Nation-wide, tourism-based jobs typically pay only around 40% as much as non-tourism jobs. In Teton County, tourism is a better-paying industry, but still only pays around half that of other professions. (Over the past few years, the COVID-driven influx of higher-paying remote-work jobs in finance, consulting, and tech has caused the pay gap between Teton County’s non-tourism and tourism jobs to increase. And even those working non-tourism jobs earn far less than those residents earning investment income.)

Until a few decades ago, Jackson Hole’s geographic isolation created close links between the local economy and housing prices. Over the course of this century, though, improvements in technology have rendered that isolation increasingly moot, greatly increasing the demand to live in Jackson Hole. As that has happened, housing prices have skyrocketed, forcing the lower- and middle-income people who once could afford to live in the Jackson Hole valley to move to Teton Valley or Star Valley. As that has occurred, the roads leaving Jackson Hole west over Teton Pass and south down the Snake River Canyon have become increasingly important conduits for the most vital of service industry assets: employees.

The two graphs below get at this.

Both graphs use data from automated Wyoming Department of Transportation (WYDoT) traffic counters. These track the number of vehicles using Teton County’s roads every day.

The graphs below look at the average number of vehicles entering and leaving the Jackson Hole valley each day during the slowest and busiest traffic months of the year: January and July respectively. They also look at two years: 2017, the year WYDoT installed a counter near Wilson, and 2023, the most recent full year. While the counters can’t distinguish between local, commuter, commercial, second home, and tourist traffic, the slowest month suggests the year-round baseline of commuter traffic, while the busiest month suggests the summer surge of tourist traffic.

Figure 2 compares the traffic in 2023’s slowest and busiest traffic months on the three roads funneling traffic into and out of the Jackson Hole valley:

• North: Highway 89/189/191 at the Gros Ventre Junction;
• South: Highway 89/189/191 south of the Town of Jackson;
• West: Highway 22 east of Wilson

Three points jump off of this graph.

First, summer traffic is about twice as busy as winter’s.

Second, if we use winter’s traffic as a baseline measurement of commuters plus some combination of local, commercial, and tourist traffic, then most of Jackson Hole’s commuters are coming from Teton Valley and Star Valley.

Third, if we assume tourism-related vehicles account for most of the difference between July’s peak traffic number and January’s nadir, then nearly half of all tourist traffic is coming into the Jackson Hole valley from the north; i.e., from Yellowstone and Togwottee Pass. In contrast, only about one-quarter of tourists are coming east over Teton Pass, and perhaps fewer.

This latter fact suggests that even if Teton Pass is closed to tourism-oriented vehicles this summer, the overall affect on the local economy may be lighter than feared. In particular, the airport and northern entrance to the Jackson Hole valley will remain open and unimpaired; ditto the southern entrance. Then factor in the fact that tourists who might have targeted driving over Teton Pass have the option of driving into Jackson Hole from the south, and the overall drop in Jackson Hole tourism may not be too bad.

The same will not be true for those Teton Valley tourism businesses marketing their proximity to Jackson Hole, Grand Teton National Park, and areas beyond.

Figure 3 looks at how traffic flows changed between 2017 and 2023.

The big surprise here is that the 2017-23 growth in the number of vehicles coming into and out of Jackson Hole during the winter exceeded the growth in the number of vehicles coming into and out of Jackson Hole during the summer.

In other words, WYDoT’s data strongly suggest that the growth in Jackson Hole’s traffic is being driven not by tourism, but instead by people commuting into Jackson Hole.

More specifically, other WYDoT data suggest the number of vehicles coming up the Snake River Canyon from Star Valley is increasing about 4%/year, and the number coming over Teton Pass from Teton Valley is growing around 5%/year. What’s not growing that fast is our road system, nor other tools to handle more vehicles…

Yet Jackson Hole’s businesses are increasingly dependent on these increasingly crowded roads to deliver the growing numbers of out-of-county workers in the workforce. If one of those roads suddenly and catastrophically fails, it’s potentially devastating to any Jackson Hole businesses reliant on such workers.

Taxable Sales

The other problem with the timing of the Teton Pass collapse is how it affects the revenue taken in by the tourism industry and, by extension, local government.

Because Wyoming has no state income tax and a relatively low property tax rate, local government’s revenue is highly dependent on sales taxes. Specifically, sales taxes account for around 80% of the Town of Jackson general fund revenue, and around 50% of Teton County’s.

Over the past quarter-century, Teton County’s taxable sales economy has performed very well. Even including three downturns – one related to 9/11, a second to the Great Recession, and a third due to the COVID pandemic – for the past 26+ years taxable sales have nearly quadrupled, growing at a compounded average annual rate of 5.2%. (Take inflation into account, and they’ve doubled, growing 2.6%/year – Figure 4)

Over the past couple of years, though, growth has slowed to a rate not seen for over a decade. As a result, local merchants were hoping for a strong summer. In this, their optimism was buoyed by the fact that advance lodging bookings for summer 2024 were up 11%, suggesting a season of strong growth. Add in the fact that since the pandemic, hoteliers have been able to substantially raise their rates, and pre-slide Jackson Hole seemed poised for a much busier, more lucrative summer than it’s had since the pandemic.

This optimism took on even greater importance because, for most in the local tourism industry, summer is THE season. In particular, during a typical year the four summer months of June-September account for roughly half of all taxable sales. They also account for more tourism-related sales than the other eight months combined. Do well in the summer, and you’ve got a buffer to get you through the year. Do poorly, and unless you’re in the ski business, you’ll have a rough time catching up. (Figure 5)

Overnight, the slide not only undermined the Teton Pass road, but also the tourism industry’s good feelings about the coming summer.

Given this context, let’s take a closer look at the folks commuting into Jackson Hole to work.

Workers As Inputs

In 2020, the COVID-19 pandemic gave us a vivid snapshot of how closely linked the world’s economy has become. As transportation networks were increasingly disrupted, supply chains fell apart. As they did, manufacturers who had become hyper-efficient by relying on just-in-time delivery of essential parts found it increasingly difficult to produce their goods.

Applying this perspective to the Teton Pass slide, consider two simple facts: Jackson Hole has a service economy; and a service economy relies on employees. Put another way, what parts are to manufacturers, labor is to Jackson Hole’s service economy, particularly its tourism industry.

The closure of Teton Pass drives home the point that Jackson Hole’s service economy is also a just-in-time enterprise, relying on a remarkably efficient road-plus-vehicles transportation network to deliver its key component – employees – to their jobs at the start of the work day. In other words, just in time.

From this perspective, Teton Pass is at the heart of a quite sophisticated supply delivery system, one based on a remarkable piece of transportation engineering. Further, given the weather, steep slopes, and other hazards constantly threatening to close the road, it’s equally impressive that the Teton Pass road remains open as much as it does.

Last week’s closure shows, though, as sophisticated as the Teton Pass highway may be, it’s vulnerable to catastrophic failure. The same is true for Jackson Hole’s other major just-in-time delivery route, the Snake River Canyon, which experienced its own weeks-long closure over a decade ago thanks to a massive rock and mudslide.

Service businesses need people to deliver services, and Teton County, WY ranks in the top 1% of all US counties in its percentage of service and construction jobs. As a result, just as the global manufacturing industry experienced wild and far-reaching disruptions when it could no longer count on a particular widget reaching a particular factory just-in-time, so too does Jackson Hole’s economy experience wild and far-reaching disruptions when its workers can’t reach their jobs just-in-time.

Thus is the economic interdependence that creates Greater Jackson Hole, the one community spanning two states and three counties. And thus its vulnerability to two winding roads, both of which work great until they don’t.

Workers As Living, Breathing People

From an economics perspective, workers may be inputs necessary for producing services, but what really matters is that they are people with families, lives, ambitions, needs, wants, and so much more. People who chose to move to Teton Valley or Star Valley did so recognizing they would need to make a commute, and they planned their lives around it. What they did not plan on was that the commute would take hours longer each day. Today, thousands of people are struggling to cope with the consequences of that reality.

Currently an estimated 3,550 Teton Valley residents work in Jackson Hole. This represents roughly 30% of all Teton Valley residents, regardless of age or employment status. It also represents roughly half of Teton Valley’s entire workforce.

While each person affected by the commute has a different story to tell, we do know the following:

• Per Google Maps, under normal conditions driving from Victor to Jackson via Teton Pass takes 35 minutes to go 25 miles. Driving via the only other practical route into Jackson Hole – over Pine Creek Pass and then up the Snake River Canyon – takes 100 minutes to go 85 miles. This adds 120 miles and over two hours to the usual commute.
  • For people with kids, pets, or responsibilities for other living things, this additional time and uncertainty can create an untenable situation.
  • For all those commuting, the additional 120 miles/day will cost an extra $80/day (using the IRS mileage allowance of $0.67.mile). That’s $400/work week, which is 30% of the community’s median weekly wage.
• Before the slide, almost everyone commuting from Teton Valley to Jackson Hole drove their own cars. Since the slide, this hasn’t changed, and in fact seems to have gotten more acute – if you need to get home to grab your kid from child care or school, or to let your pet out, or do whatever, the appeal of driving your own vehicle outweighs the extra costs of gas and the like.
• It’s not just Teton Valley residents who have been affected. Before the Teton Pass slide, driving from Alpine to Jackson through the Snake River Canyon took about 40 minutes. Now, with an estimated 3,200+ more vehicles/day making the drive – a 130% increase on the baseline amount of traffic – it can take Star Valley residents up to ½ hour longer – one way – to make the same drive.

Then, of course, there’s the added anxiety, stress, uncertainty, and the rest being experienced by all those involved: commuters, their employers, and those who are indirectly affected as work patterns and lifestyles shift to accommodate the closure.

The Costs

A week ago, those Idahoans working in Jackson Hole planned on spending about 1.5 hours/day driving to and from their jobs. Today, those commuters – and very few Teton Valley workers carpool or take public transportation – are looking at a 3.8 hour roundtrip commute. At best.

The table in Figure 7 takes a few basic inputs – added drive time and mileage, foregone wages, number of workers, and commute cost per mile – and estimates the dollar value on that added burden. Specifically, as I calculate it, the slide is costing the typical Teton Valley commuter about $168/day in a combination of extra driving costs ($80/day) and foregone wages ($86/day). Multiply that $168/day by five working days, and the total cost is $840/week – for someone whose average weekly wage is only around $1,600.

Apply this figure to Teton ID’s entire 3,500-strong Jackson Hole workforce, and you get a collective cost of around $600,000/day – $3 million for every work week.

Apply the same methodology to Wyoming’s Star Valley, and the people living there are collectively losing another $100,000/day. This is due to longer commute times as several thousand more cars work their way from the Teton Valley to the Snake River Canyon, the only practical way into Jackson Hole for Idaho-based workers.

The new detour road around the Teton Pass slide will open by month’s end. Once it does, the extra costs facing Star Valley commuters will go away. They will also be greatly reduced for Teton Valley residents. Because the detour will likely result in a slower drive than was possible on the now-damaged road, though, there will still be added costs to those commuting into Jackson Hole from Teton Valley, which I estimate to be $30/day, or a collective total of $107,000/day for Teton Valley’s 3,550 daily commuters.

Comment

As noted above, Greater Jackson Hole is one community spanning two states and at least three counties. From sources across the planet, money – especially investment income – pours into the Jackson Hole valley. Then, like the air, water, critters, and other phenomena which don’t pay attention to political boundaries, some of that money flows into our neighboring communities.

Extending from this are two realities.

The first is economic interdependence. Somewhere around 40% of Jackson Hole’s jobs are held by people living outside the county; most living in either Teton Valley or Star Valley. As the Teton Pass slide has shown, when Jackson Hole is cut off from its neighboring counties, everyone suffers.

But not equally. That is the second reality: Economic dependence. For the simple fact is that, because Teton County, WY leads the nation in per capita investment income, it is much better insulated than the surrounding communities from the kinds of economic problems – much less shocks – that can affect local businesses and workers. As a result, metaphorically, while the slide caused Jackson Hole to catch a cold, Teton Valley has contracted a pretty severe case of the flu. As further result, for many Jackson Hole residents the income keeps rolling in regardless of local road conditions, job disruptions, or other economic misfortunes.

Bigger picture, the Teton Pass slide illuminates a larger problem, namely the potential events like this create for taking “ready, fire, aim” actions.

Particularly during an election year, the temptation will be strong to offer hurried, knee-jerk “solutions” to the many problems the slide has revealed. Yet many of the problems are so intertwined and multifaceted that they perfectly embody the HL Mencken observation that “For every complex problem, there is an answer that is clear, simple, and wrong.”

For example, between 2010-2022, the most recent year for which there are comparable data, pretty much every one of Greater Jackson Hole’s major socio-economic indicators grew faster than tourism counts:

• the region’s population grew 3 times faster than did Grand Teton National Park’s visitation;
• The number of jobs grew 10 times faster;
• per capita income – even after adjusted for inflation – grew 19 times faster. (Figure 6)

This suggests there’s far more going on in the region – economically, socially, and otherwise – than a simple “the slide is threatening our tourism economy” analysis suggests. Yet there is going to be a strong tendency not just jump to such conclusions, but act on them.

What the Teton Pass slide does suggest is that we need to take a hard look at Greater Jackson Hole’s trajectory. Do we know where we’re going? Do we like where we’re going? If not, what is the future we actually want?

In my ideal world, in the short run we’ll help those folks most directly affected by the slide. In the long run we’ll use the slide as the catalyst for asking important questions about the region’s future. If we can accomplish those two goals, then the great Teton Pass Slide of 2024 it will prove to be anything but a disaster.

Hello and happy late-February!

Today’s newsletter is based on two recent occurrences.

The first was that my last two newsletters focused on Teton County’s rapidly-rising property taxes.

In Wyoming, property taxes reflect property values, which have exploded the past few years. In turn, that got me wondering how much of the boom might have been caused by well-to-do COVID migrants fleeing big cities for the Tetons region.

Pursuing this thought, I dug into a variety of socio-economic data, hoping to find something that would give me a better sense of how – if at all – the forces COVID unleashed might have affected Jackson Hole.

The second occurrence was three business-related events from earlier this month.

First, Apple introduced its new virtual reality headset. While I’ve not tried that device, several years ago I demoed a virtual reality headset that instantly transported me to the center of a large alpine lake. Floating contentedly, I was surrounded by mountains, the distant shoreline, a variety of birds, and other familiar sights. Then, out of nowhere, I was hit by a locomotive. No tracks, no warning. Just a steam engine running at full speed on top of the water. The experience was so vivid, so visceral, and so completely beyond comprehension that it seared itself into my memory.

Second, the world’s largest cruise ship had its maiden voyage. The Icon of the Seas holds 7,500 passengers and 2,500 crew, meaning its population is about the same as Jackson’s. The ship boasts the largest waterpark at sea, the world’s largest floating ice rink, a surf simulator, a casino, nightclubs, stage shows, gardens and a park, and a variety of other features. In other words, a whole bunch of attractions you could find on land – think Las Vegas – except they’re on a boat.

Third was Las Vegas itself, which hosted the Super Bowl. Sort of like the Icon of the Seas, Las Vegas amalgamates, commodifies, and Vegas-izes a hodgepodge of features from other places – Paris, New York, ancient Rome, where have you – and puts them into a setting basically disconnected from the natural world around it. In other words, Las Vegas creates its own type of virtual reality.

My thoughts about Apple, the Icon, and Las Vegas shaped my COVID-related analysis. To telegraph my punches, here’s what I found.

Between 2018-2022 – i.e., during the years straddling the heart of the COVID pandemic – eight of the ten counties in America that experienced the biggest surge in wealth – America’s leading “Wealth Attractor” counties – shared a common quality: They are distinguished not by virtual reality, but by the by-God actual reality that only the natural world can offer. The eight were:

• Eagle, Pitkin, Routt, and San Miguel counties in Colorado (the homes of Vail, Aspen, Steamboat, and Telluride respectively)
• Blaine County, Idaho (Sun Valley)
• Douglas County, Nevada (South Lake Tahoe)
• Summit County, Utah (Park City) and
• Teton County WY (Jackson Hole).

The only exceptions to the “money moved to places closely linked to the natural world” rule were Denver County, Colorado (Denver) and San Mateo County, California (Silicon Valley).

We can quibble about how “real” places like Aspen and Vail are, but the simple reality is that, during COVID, the places which attracted people who could live anywhere were those closely tied to the natural world. Not a virtual headset or trees-at-sea version of the natural world, but the real deal.

I think that’s profoundly important in what it says about our values. It’s arguably even more important in what it suggests about pressures Jackson Hole and similar communities will be facing going forward.

As always, thank you for your interest and support.

Jonathan Schechter
Executive Director

PS – Based on the feedback I received from my last newsletter, readers like puppy photos at least as much as socio-economic analysis. Pandering to that audience, please find below more cuteness and fierceness.

Introduction

Four years ago, COVID-19 upended seemingly every aspect of American life.

After a couple of years of upheaval, things have arguably settled into a “new normal,” a world in which many previous assumptions about work and home no longer seem to apply.

To better understand how we got here, I looked at some basic population, income, and jobs data about every county in the US. I focused on the years 2018 and 2022: the former because that was the last year before Teton County, WY’s recent, extraordinary growth in income; the latter because that is the most recent year’s data available. (Figure 1)

Findings

In 2022, there were 3,088 counties or, as the geographers say, “county equivalents” in the United States. Of these, 2,769 – roughly 90% – had more than 5,000 residents. In the analysis below I focused on these larger counties because smaller counties’ sizes make them susceptible to huge, often nonsensical variations in growth rates.

If you pose the question “Between 2018-2022, did counties’ per capita income growth correlate well with their population growth?” the answer is “Nope.” What does emerge from asking this question, though, is that during that particular four-year span, Teton County, Wyoming enjoyed the nation’s greatest per capita income growth: 89%. (Figure 2)

Since per capita income growth v. population growth got me nowhere, I decided to replace population growth with 2022 per capita income. While that proved mostly inconclusive, it did highlight two facts.

One was that, in 2022, Teton County led the nation in both 2018-2022 per capita income growth and 2022 per capita income (Teton County has had the nation’s highest per capita income every year since 2004). No county had led in both income and four-year growth rate since New York, NY in 1998.

The second fact was that, in contrast to Figure 2’s population-growth-versus-income-growth blob, there seemed to be a bit more going on when I compared annual income to four-year income growth. This phenomenon is captured by the oval surrounding the higher-income, higher-growth counties in Figure 3.

Building on this, I created Figure 4 by running Figure 3’s data through two filters: counties with per capita incomes of $100,000 or more, and counties with at least 40% growth in per capita income between 2018-2022. Ten counties met both criteria, suggesting that these were the places where, during COVID, people who could afford to live anywhere were choosing to live. My term for these counties is the “Wealth Attractors.” (Figure 4)

Figure 5 is the same as Figure 4, but with the ten counties identified and categorized. Doing this, what leaps off the page is that eight of the ten counties were ones whose characters and economies are directly linked to the natural world around them. In fact, the six with the biggest growth in per capita income were all “outdoors” counties, along with #s 8 and 10. Combined, I refer to these counties as the “Outdoors 8.” (Figure 5

This emphasis on locale had never occurred before. For example, between 2010-2014 the places with the greatest increase in wealth were, broadly speaking, places associated with hydrocarbons and the fracking boom; between 2014-2018, it was more about tech. Between 2018-2022, though, people with means sought out places closely tied to the natural world. (Table 1)

So what happened? Well, one thing that didn’t happen was a big population surge in the Outdoors 8. In fact, three of the Outdoors 8 lost population between 2018-2022, and only one saw its population grow more than 3% (during that period, the nation’s population grew 1.4%). This suggests that the Outdoors 8’s surge in incomes came not because of population growth, but because of population turnover; i.e., less well-to-do residents were displaced by new, well-to-do ones. (Figure 6)

Where did the newcomers’ wealth come from? In part, from a shift in the counties’ job mix. Between 2018-2022, five of the Outdoors 8 saw a decline in Tourism-related jobs (i.e., jobs in recreation, lodging, and restaurants), and no county saw more than a 4% increase in Tourism jobs.

At the other end of the spectrum, in five of the Outdoors 8 the biggest job growth occurred in the “Location-Neutral” industries of Information, Finance, and Professional Services. In the remaining three, Location-Neutral jobs were the second-fastest area of growth. (Figure 7)

This job mix matters because not only do Location-Neutral jobs pay far more than Tourism-related jobs, but Location-Neutral wages are going up far faster than in any other field.

The result is a weird anomaly: In 2022, the Outdoors 8 had 70% more jobs in Tourism than in Location-Neutral industries, but the Location-Neutral payroll was 40% higher.

Perhaps even more important is the fact that not only are wages in Location-Neutral jobs two-to-three times higher than those in Tourism, they are growing much faster.

The point? Between 2018-2022, job and wage growth in the Outdoors 8 were driven by Location-Neutral industries – folks who could work anywhere chose to work in places emphasizing nature and outdoor recreation.

Further, when Location-Neutral businesses pay, on average, over twice the wage paid by a Tourism-oriented job, it suggests that those running Tourism-oriented businesses are going to be facing an increasingly difficult time finding employees. (Figure 8)

For as well-paid and bountiful Location-Neutral jobs may be, though, they are NOT what drove the rapid increase in the Outdoors 8’s overall incomes. In particular, as Figure 9 shows, seven of the Outdoors 8 saw their overall incomes grow faster than their wage incomes (this is why they are to the right of Figure 9’s blue line, which indicates equal growth between wages and total income).

So what drove Outdoor 8 residents’ growth in personal income? In a word, investments, that most location-neutral of all income types. Figure 10’s X axis is the same as Figure 9’s; i.e., it shows 2018-2022 growth in Total Income. Figure 10’s Y axis is different, though, substituting Investment Income for Figure 9’s Wage Income. As Figure 10 shows, again with the exception of Telluride, between 2018-2022 every Outdoors 8 county saw its Investment Income grow faster than its Total Income. The two Tech/Finance counties experienced the opposite. (Figure 10)

The bottom line is that in 2022, even in the most wage-dependent of the Outdoors 8 counties, residents got at least 41% of their overall income from investments; in five of the eight, investments accounted for over half of residents’ total income. In the US as a whole, only 20% of Americans’ total income comes from investments.

Further, between 2018-2022, in six of the eight counties Investment Income was the fastest-growing type of income. Combine this with the huge surge in Location-Neutral wages, and a very clear picture emerges that during the COVID era, people with the economic freedom to move where they wanted to go chose mountain towns closely connected to the natural world around them.

The same was distinctly NOT true in previous cycles, where rapidly growing incomes were closely tied to a particular type of work. (Figure 11)

Comment

To me, Table 1 (above) captures the most important finding of this study, namely that the COVID years marked a distinct change in how we think about economic boom towns. In turn, I think that has clear implications for the future of Jackson Hole and other communities where the character, economy, and quality of life are closely tied to the natural world around them.

Specifically, my big takeaway from Table 1 is that before the COVID years, places experiencing rapid income growth – i.e., boom towns – were associated with a particular type of industrial growth. In the mid-2010s, the tech boom shot Silicon Valley’s incomes to new heights. Four years earlier, the boom was in hydrocarbons, particularly those extracted by fracking. Hence those counties’ surge in income.

This phenomenon is captured in Table 2, which takes Table 1 back four more years. During that 2006-2010 period, eight of the ten biggest Wealth Attractor counties were in western North Dakota, the epicenter of the fracking boom. (Table 2)

Things changed with COVID, however. All of a sudden, traditional economic drivers were no longer associated with counties’ growth in wealth. Instead, for those people who had the flexibility in their incomes, the attractor was nature, authenticity, and no doubt a sense that a relatively remote place would offer a sense of safety from COVID they could not find in major cities.

Put another way, before 2018-2022 America had never seen such an explosion of wealth associated with places prioritizing conservation of the natural world. Going forward, though, economists will have to consider the dynamics of not just boom towns associated with oil or gold or software, but those associated with conservation and lifestyle.

This raises two obvious questions: “Will this shift last?” and “Whether or not it does, what are its implications for the Outdoors 8?”

Regarding “Will this shift last?” that is an open question. Using the methodology underlying Tables 1 and 2, I looked at four-year cycles going back to 1970-1974. To generalize, for nearly 50 years, Wealth Attractor counties fell into one of three categories:

• Low population, agriculture-intensive economies during a period of high commodity prices;
• Low population, hydrocarbon-intensive economies during oil and gas booms; or
• Finance and/or tech hubs during financial and tech booms

During that time, the only real exception to this rule occurred between 1998-2002, when four outdoors-oriented counties ranked among America’s ten leading Wealth Attractors: the islands of Nantucket and Martha’s Vineyard, and the ski towns of Steamboat Springs and Telluride. Because this period straddled 9/11, the surge in wealth experienced by these communities suggests that folks who could afford to do so flocked to a place of perceived safety.

Arguably, the same thing happened between 2018-2022, when COVID led many Americans to search for a different type of safety.

Taking a longer-term view, however, here’s what hit me.

As the sea of pink in Table 2’s first two columns suggests, the primary wealth attractor between 2006-2014 was hydrocarbons, in particular the wealth that was available through fracking in North Dakota’s Bakkan Field. That boom faded, though, and between 2014-2018 was replaced by the huge surge in wealth created in Silicon Valley. In turn, as things in tech slowed down, that boom was replaced by a surge that was more about lifestyle than economic opportunity.

Will well-to-do Americans keep flocking to places like the Outdoor 8? Hard to say, because we’ve never seen a boom like it. We also don’t know the degree to which places like the Outdoors 8 will “deplete” the resource underlying their boom by failing to conserve the natural world around them.

Regardless, there’s a larger lesson here, namely how booms continue to affect communities long after they’ve slowed down.

For example, consider the eight North Dakota counties that form the heart of the Bakken region. From 1992 to 2006, their per capita income growth matched that of North Dakota’s other, non-Bakken counties, and their population growth was slower. In fact, in 2010 the Bakkan counties’ population was actually lower than it had been in 1992. (Figure 12)

Today, however, the Bakkan counties’ per capita income is significantly higher than the rest of the state’s, and since 2010 their population growth has been three times faster than the rest of North Dakota’s.

Why? Because the effects of the Bakken field boom that started nearly two decades ago continue to reverberate today. In particular, even though the huge boom in drilling petered out over a decade ago, North Dakota’s Bakken counties have not declined to their pre-fracking selves. Instead, they have settled into a post-boom “new normal,” one highlighted by faster population growth and a per capita income significantly higher than the rest of the state. (Figure 13)

A similar dynamic occurred in the Bay Area a decade earlier, when the dot-com boom separated the economic trajectory of the three Silicon Valley counties of Santa Clara, San Francisco, and San Mateo from that of the rest of the state. Despite the 1990s’ dot-com boom going bust, incomes in the Silicon Valley were boosted to a new floor, one upon which all future growth has been based. (Figure 14)

Conclusion

During COVID, Teton County and similar communities experienced a boom of their own, albeit one driven by a very different mechanism: setting and lifestyle rather than traditional economic drivers. Whether the Outdoors 8 and related places will continue to rank at the top of America’s Income Attractor list isn’t clear. What seems likely, though, is that as with the hydrocarbon- and tech-driven booms, the shifts that occurred during the COVID years will continue to reverberate going forward.

As I see it, the thing tying together Apple’s virtual reality headset, the Icon of the Seas, and Las Vegas is that they are all sugar highs, activities which create adrenaline rushes. While I am not a neuroscientist, the reading I’ve done suggests the problem with adrenaline rushes is habituation; i.e., over time, you need a bigger jolt to get the same feeling. Hence Las Vegas has to keep adding new attractions, cruise ships have to keep getting bigger and, oxymoronically, virtual reality has to keep getting more real.

Alternatively, by going out in nature you can experience actual by-God reality, things our species has evolved to appreciate over hundreds of thousands of years. This type of experience involves a different sort of neural reaction, one that is more profound and less sugar-high.

It’s for this reason that I think the migration to communities like the Outdoors 8 will continue. Maybe not at the same pace as during COVID, but continue nonetheless. Technology has made geographic barriers increasingly less meaningful, allowing those with economic freedom to live where they want to live rather than where work forces them to live. And while the trendiness associated with living in a community closely tied to nature will wax and wane, the deep neural connections won’t. In that way, the incentives pulling people to places like the Tetons are far less susceptible to booming and busting because, at the end of the day, they aren’t purely – or even primarily – economic. Instead, they’re about something more intrinsic to humans’ essence.

From a Maslow’s hierarchy perspective, America’s extraordinary economic success has made it increasingly easy for people to pursue their higher selves. One result is the kind of shift that occurred between 2018-2022, when for the first time in the nation’s history there wasn’t a simple economic explanation underlying America’s leading Wealth Attractor counties. To me, that suggests we need to consider anew many of the foundational assumptions underlying where we think Jackson Hole and related communities are heading, as well as how we deal with that future.

What will this mean for Jackson Hole? My best guess is that the pressures we were feeling before COVID, and which COVID only accelerated – pressures including affordable housing, governmental budget challenges, growing income inequality, and increasingly stressed infrastructure and ecosystem health – will become even greater.

Less clear to me is how we will handle those pressures.

Historically, our sense of community – that ineffable something that has bound residents together despite our disagreements – has allowed us to weather even the thorniest of challenges and still emerge with a sense that we are greater than the sum of our parts.

What concerns me, though, is whether another one of the things COVID has upended is our sense of community. Have the pressures become so great and the tensions so sharp that we’ve lost sight of that which binds us together, namely our shared sense that we are stewards of an extraordinary place, a place which never fails to produce awe in those who experience it?

Clearly social media and economic pressures have led to a coarsening of civil discourse. Sadly, COVID only made things worse. My fervent belief, though, is that we as a community can rise above that negativity; that we can recognize in each other the fact we’re all here for the same basic reason. As I see it, that foundation is far stronger than anything our discordant world can throw at us. Why? Because unlike the cheap sugar highs of virtual reality, it is intrinsically connected to the natural world around us.

That’s why people will continue to be attracted to places which have put a premium on conservation. It’s also why the entire Tetons region – along with every other place which emphasizes the natural world around it – can anticipate continued growth pressures, particularly from those with the economic freedom to live where they want to live. The key to addressing those pressures will be to not lose sight of why we’re here, to not let the noise associated with our community’s growth and change overwhelm the signal that is the conservation and stewardship legacy we inherited from our forebears, and which we in turn must protect for future generations.

Hello!

Happy 2024! I hope your year is off to a great start.

My most recent CoThrive newsletter focused on an alternative approach to local property taxes. The approach, which I labeled the MOTH, would affect the small share of property tax bills controlled by Jackson Hole’s local governments.

Judging by the emails I received, property taxes are a top-of-mind issue for a lot of folks. Particularly striking was the number of people who asked my opinion about a property tax-related petition currently being circulated. This newsletter is my response.

The petition asks people to support a measure entitled the “People’s Initiative to Limit Property Tax in Wyoming through a Homeowner’s Property Exemption.” If enacted, the “People’s Initiative…” will create a “Homeowner’s Exemption” that will exempt 50% of a home’s value from property taxes. For example, if you owned a home worth $1 million, you’d pay property tax on only $500,000 worth of that value.

The “People’s Initiative…” would apply just to dwellings, not the land on which they sit. It would also apply just to primary homes, not second homes, rental units, or any other type of property.

In my previous newsletter, I focused on the MOTH because it’s something Jackson Hole’s local governments can implement on their own. By extension, I didn’t discuss the “People’s Initiative…” because, like all the other property tax-related proposals currently kicking around, enacting it lies beyond local control.

Today’s newsletter takes the opposite tack. It has two parts: an explanation of the initiative (at least as I understand it), and my reasons for opposing it.

While conceptually I’m okay with the concept of a Homeowner’s Exemption, for two reasons I oppose this particular initiative:

1. It’s a one-off temporary fix, addressing the symptoms but leaving the underlying problem unaddressed.
2. While the proposed initiative kinda’ sorta’ solves one problem, it creates others. Worse still, it fails to acknowledge that it creates other problems, much less offers solutions to them.

To me, creating a problem without either acknowledging doing so or taking responsibility for addressing it is not just bad policymaking, it’s the antithesis of true leadership. We already have enough of that at all levels of politics and government, so I’m loath to encourage more.

• Introduction
• Taxable Property
• Residential Improvements & Property Taxes
• The 50% Solution: Mechanics
• Winners and Losers
• Comment
• Conclusion

As always, thank you for your interest and support.

Jonathan Schechter
Executive Director

PS – The photos below are of CoThrive’s latest team member. We’re upping our cuteness and fierceness games in 2024.

Introduction

What is the proper role of government? And once we’ve decided that, how do we pay for the services we want?

These are the essential questions of civic life. They also underlie how we might think about a petition aimed at reducing Wyoming’s property taxes.

Property taxes are Wyoming’s primary tool for funding public education. They also provide a significant amount of revenue to local governments, among them Teton County (unlike the county, the Town of Jackson collects very little property tax). (Figure 1)

If the petition receives enough signatures, in November voters will be asked whether they want to create a “Homeowner’s Exemption.” If enacted, the Homeowner’s Exemption would exempt from property taxes 50% of a primary residence’s assessed value.

Critically, with some exceptions, the Homeowner’s Exemption would NOT cut property taxes in half. This is because it would apply only to Residential Improvements; i.e., to a dwelling, and not the land on which it sits. It would also apply solely to primary residences, not second homes, non-residential properties, or the like. Finally, it would also be just a one-off remedy – taxes would go down once, but then climb again along with property values.

All that noted, for the 235,000 or so Wyoming residents who own primary residences, the measure would indeed cut their property taxes.

The proposal being circulated has the oh-so-clunky name of “People’s Initiative to Limit Property Tax in Wyoming through a Homeowner’s Property Exemption.” To simplify matters, I’ll refer to it as the “50% Solution.” Also in pursuit of simplicity, in this essay I’ll use the terms “Residential Improvements” and “dwellings” interchangeably (“Residential Improvement” is tax-speak for what mere mortals call a “dwelling” or “home”). Before taking a closer look at the 50% Solution, though, let’s first look at property taxes in Wyoming.

(Note: To do the analysis below, I made several assumptions ranging from home ownership levels to tax rates. As a result, while the numbers below offer reasonably accurate estimates of the 50% Solution’s effects, they aren’t precise.)

Taxable Property

Property taxes are based on assessed value. In Wyoming, the assessed value of most types of property is 9.5% of the market value. The taxes on a property are determined by applying a certain number of mills – the tax rate – to the assessed value. (A mill is one-thousandth of a cent.)

To oversimplify, from a property tax perspective Wyoming has three major categories of property: hydrocarbons, residential, and everything else.

Collectively, the three types of hydrocarbon properties – oil, coal, and natural gas – currently account for 49% of Wyoming’s entire property value; individually, none of the three hydrocarbon types is as big as residential property. Over the past three years, only natural gas-related properties have seen a bigger increase in value than residential properties. In contrast, coal property has seen the slowest growth in value. (Figure 2)

Residential Property

Wyoming breaks residential property into three categories: Improvements, Land, and Personal Property. Roughly 3/4 of the state’s entire residential property value lies in Residential Improvements, and essentially none in Residential Personal Property. (Figure 3)

In Teton County, where private land is so scarce, the figures are somewhat different: roughly 2/3 of the county’s total residential property value lies in Residential Improvements. (Figure 4)

Comparing statewide and Teton-specific data, two interesting facts emerge.

First, despite Teton County having just 4% of Wyoming’s population and 5% of its dwellings, Teton County’s dwellings account for 30% of the value of all of Wyoming’s Residential Improvements. Its Residential Land accounts for 47% of the value of all of the state’s Residential Land.

In addition, between 2020-2023, Teton County also led the state in growth in both categories. (Figure 5)

Second, the combined value of Teton County’s residential properties – its Improvements, Land, and Personal residential property – is worth 30% more than the value of all of Wyoming’s coal properties. (Figure 6)

Residential Improvements & Property Taxes

Currently, the assessed value of all of Wyoming’s Residential Improvements is $7.1 billion, which represents a market value of around $75 billion. The current assessed value of all of Teton County’s Residential Improvements is $2.2 billion, which represents a market value of around $23 billion – nearly one-third of the state’s total.

Between 2020 and 2023, the assessed value of all Wyoming’s Residential Improvements grew $2.8 billion, a remarkable 64% overall increase (18% annually). The assessed value of all of Teton County’s Residential Improvements grew $1.1 billion, an even more remarkable 106% increase (27% annually).

Hence the problem. When property taxes are growing 18% or 27% annually, people take notice. As a result, a number of proposals are seeking to do something – anything! – to, as one of my correspondents put it, “STOP THE MADNESS!” (Figure 7, which is graphed on a logarithmic scale to better illustrate rate of growth.)

Most of the property tax-related proposals are focused on steps Wyoming’s legislature might take. In contrast, the 50% Solution is an initiative that would bypass the legislature and go straight to the ballot.

To qualify for the November 2024 ballot, the initiative needs to be signed by around 30,000 registered voters by the time the legislature convenes in mid-February. Teton County will need to provide around 1,500 of those signatures.

The 50% Solution: Mechanics

The 50% Solution will apply only to dwellings used as a primary residence. Owners of such dwellings will receive a “Homeowner’s Exemption,” which will exempt from property tax one-half of the assessed value of their Residential Improvements. Here’s the key sentence from the proposed initiative:
“For property used as a primary residence, fifty percent (50%) of the assessed value of the primary property is exempt from property taxation as a homeowner’s exemption.”

If the 50% Solution becomes law, what will the consequences be for those who qualify?

The short answer is that the greater the amount of a property’s value tied up in the dwelling, the greater the overall property tax relief.

Using public records, I created Figure 8 to illustrate what the owners of 30 different Teton County properties would have experienced in 2023 had the 50% Solution been law. As it shows, people who own a dwelling but not the land underneath– e.g., folks who live in trailer homes or condominiums – will see their property tax bills halved. People whose property value is equally split between dwelling and land will see a 25% drop in their taxes, and people who have inexpensive homes on valuable land will see relatively little tax relief.

Table 1 gives details for seven of Figure 8’s properties.

Winners and Losers

The Money at Stake

As noted above, the assessed value of all Wyoming property is currently $34.1 billion. Of this, Residential Improvements are worth $7.1 billion (21%).

According to the Census Bureau, 72% of all Wyoming homes are owner-occupied, and therefore would be eligible for the 50% Solution.

Do the math, and the 50% Solution would exempt from taxation around $2.6 billion of Wyoming’s total Residential Improvements. This would lower the amount subject to taxation from the current $14.9 billion to $12.3 billion (17%).

Because Teton County has more second homes, income properties, and the like, fewer of its dwellings are eligible for the Homeowner Exemption. As a result, the decline would be a little less, around 15%.

Winners – Wyoming’s $710 average savings

Across Wyoming there are hundreds of taxing districts, each with the legal authority to levy a few mills of property tax. Most of these districts focus on infrastructure needs such as water, sewer, and roads. In addition, each of the major taxing entities – counties, towns, hospitals and the like – has different limits on how many mills they can levy.

Because of this variety, it’s essentially impossible to calculate exactly how much tax the 50% Solution would cut. It also seems likely that, should the 50% Solution become law, all sorts of current non-residents will figure out ways to claim their Wyoming home as their primary residence.

That noted, we can take a crack at estimating the amount of property tax homeowners would no longer pay/government would no longer receive.

In 2023, Teton County’s basic tax rate was 56.229 mills. Perhaps surprisingly, this is the lowest mill levy in the state. There are two reasons for this: local government enjoys a high amount of tourism-based sales tax revenue; and Teton County’s property values are so high that fewer mills can still produce a lot of revenue.

Doing an unscientific study of the rest of the state, other counties’ basic mill levy ranges between the low 60s and mid-70s. For argument’s sake, let’s say the statewide average is 65 mills:

• 65 mills applied to Wyoming’s current $14.9 billion in assessed property values produces tax revenues of $967 million.
• 65 mills applied to the $12.3 billion that would be subject to tax under the 50% Solution reduces the amount of property tax revenue to $800 million, a 17% decline.
• Divide that $167 million drop over Wyoming’s estimated 235,000 owner-occupied homes, and the 50% Solution will yield a Wyoming-wide average of around $710/dwelling in property tax reduction.

Winners – Jackson Hole’s $4,800 average savings

We can be more precise in Teton County.

As noted, in 2023 Teton County’s basic tax rate was 56.229 mills.

Given Teton County’s property values, this produced $222 million in property tax revenue. Had the 50% Solution been in effect, the property tax proceeds would have been $188 million, a 15% drop. Divide that $34 million drop by the county’s estimated 7,100 primary residences, and the mean reduction/home would have been around $4,800.

This reduction would not be divided equally, though. In particular, because the value of Teton County’s dwellings is concentrated at the high end, the owners of Teton County’s highest-value homes – the 25% of homes worth at least $2 million – would receive 63% of the total property tax reduction (because, of course, they are paying the most tax in the first place). The 1,700 or so homeowners in that group would enjoy a property tax reduction averaging ~$12,000 (Figure 9)

At the other end of the scale, people who own the least-valuable 50% of dwellings – homeowners with a dwelling worth no more than $1.1 million – would see property tax reductions in the $800 – $2,000 range. That’s not nothing, but it’s also not a panacea for those whose property values have left them land-rich and cash-poor. (Figure 10)

Losers – Wyoming

If Wyoming property owners end up paying $167 million fewer property tax dollars, where will that money NOT go?

Wyoming’s K-12 education system gets the lion’s share of the state’s property taxes – around three-quarters of Teton County’s payments, and about two-thirds of most other counties’. Because of this, should the 50% Solution be enacted, Wyoming’s public education system will lose around $105 million – roughly 6% of its annual $1.66 billion operating budget. Having no knowledge of school funding, I don’t know how much such a cut might hurt. Given how heavily Wyoming relies on coal for funding its schools’ capital needs, though, and given how much trouble coal is in, the prospect of such a cut has to be of great concern to public education officials.

Also statewide, many counties and municipalities are quite dependent on property tax revenues to fund core services (how dependent varies with the jurisdiction). If I were a leader in one of those communities, I’d be quite anxious about losing critical revenue. (Figure 11)

Losers – Jackson Hole

Locally, the 50% Solution’s two biggest losers would be Teton County’s government and St. John’s Health. Could they figure out how to deal with the losses? Almost certainly. Would it make things harder for the two institutions in this period of rapidly rising costs and, for St. John’s, increasing competition/threats to its other revenue sources? Absolutely. (Figure 12)

Comment

Thinking about the 50% Solution, two ideas keep bubbling up for me. I call one “The Individual v. the Collective,” and the other “Eating Broccoli, Not Just Dessert.”

The Individual v. the Collective

Over a decade ago, Smith’s grocery and liquor store opened in Jackson. When they did, their size allowed them to charge lower prices on beer, wine, and spirits than local liquor stores had been charging. Locally-owned stores responded by lowering their prices, so now most of the valley’s liquor stores charge a bit less than they once did.

I mention that because, as a non-profit executive director, I bore witness to an unintended consequence of Smith’s price-cutting: it hurt local non-profits.

This happened because before Smith’s opened, locally owned liquor stores had higher margins, offering them more freedom to donate beverages to non-profit fundraisers. The liquor stores could claim a donation, and the non-profits made a bit of money by not having to buy liquor for their events.

But no more. Now, for example, instead of receiving free beer and wine for my events, I usually have to buy it. At a discount, of course, for which I am always grateful. But in its own small way, the shift from free to discounted has affected the finances of my events.

Reflecting on how the coming of Smith’s changed the dynamics of the valley’s non-profit events, I concluded that the underlying issue boiled down to this: How is the community best served?

Suppose a liquor store has $1,000 of wiggle room in its bottom line. Those arguing for the “Individual” perspective feel the community is best served by, say, 2,000 customers each saving 50¢ on a six-pack of beer. Each of those consumers could then use that 50¢ as they choose, which advocates feel leads to the best possible outcome for the community.

The “Collective” supporter would argue that a bunch of people saving 50¢ each doesn’t add up to much of a community benefit. Instead, they would posit that the community is better served by the store donating $1,000 worth of merchandise to a non-profit, and then letting that organization apply the larger sum towards its mission.

Shifting gears for a moment, in 1978 California was heavily reliant on property tax to fund local government and public education. Like Wyoming today, because property values were shooting up, so too were Californian’s property taxes.

In response, an initiative was passed to limit property taxes. Known as Proposition 13, it saved individual property owners money both initially and going forward. It also, however, wreaked such havoc on public school and local government funding that, arguably, 45 years on the system still hasn’t recovered.

I mention this because it reflects how I’m coming to see the 50% Solution.

If the 50% Solution gets onto November’s ballot, voters’ choice will boil down to this: Is Wyoming best served by the state’s ~235,000 primary homeowners getting a property tax cut on their dwelling, or by continuing to fund public education and local government at its current levels? Put another way, is Wyoming best served by its homeowners benefitting, on average, around $710/year? Or by aggregating that money and keeping schools and counties well-funded?

That is a legitimate policy question, and I’d love for us to have that debate. Unfortunately, though, I doubt it will be framed that way by the proposal’s advocates. Which leads us into eating your broccoli.

Eating Broccoli, Not Just Dessert

Because they are proposing to alter the current system, advocates for the 50% Solution need to make the case why things should change. In particular, they need to clearly explain three things:

• their proposal;
• its consequences; and
• how its negative consequences might be addressed (if at all).

Anything short of directly and comprehensively addressing all three should set off the loudest of warning bells. And I, for one, hear those bells ringing.

I say this because pitching a tax cut is easy – it’s eating your dessert. It’s simple and clear and everyone loves it: who’s against paying lower taxes? But as HL Mencken once observed, “For every complex problem, there is an answer that is clear, simple, and wrong.”

The problem is that someone who advocates for tax cuts but doesn’t tell you both how those cuts will affect government AND how government should respond isn’t eating their broccoli – they’re not doing the hard work of public policy. Instead, they’re telling you what you want to hear – “Here’s more money in your pocket!” – without telling you about the costs associated with their scheme.

And if you cut taxes by over $100 million, there will be costs.

Then the question becomes: “What do you do about those costs?” By not answering the question, does it mean advocates are using the 50% Solution as a stealth way of trying to reduce the size of government? If not, then how do they propose making up for the lost revenue?

To go a step further, it’s imperative that these questions be answered with integrity. By this I mean that it’s completely unacceptable to answer fundamental questions with platitudes like “Eliminate waste, fraud, and abuse” or magical thinking like “Cutting taxes will pay for itself by stimulating growth.” To be generous, anyone making such baseless claims isn’t telling you the whole story; to be less generous, they’re trying to pull something over on you.

Which is arguably what happened 45 years ago in California. After successfully playing on voters’ anger, the folks behind Proposition 13 left it to others to clean up the problems the initiative created. Ducking responsibility isn’t leadership – it’s the most pathetic type of performance art.

Bottom line? If someone is arguing for cutting taxes but won’t tell you both what the consequences will be AND how they propose addressing them, then keep your hand very tightly on your wallet. Nationally, statewide, locally – this is not someone to be trusted.

Like life itself, government is a big messy organism, something easy to poke holes in. It has its purpose though, and voting, public hearings, and other facets of our civic life give us the opportunity to figure out just how big and comprehensive government’s role should be. But if the people involved in that debate don’t conduct it with integrity – if they don’t lay out the pros, the cons, the uncertainties, and the consequences – then all they’re offering is theater, not governance. We all deserve better than that.

Conclusion

For a growing number of Wyoming residents, and especially a growing number of long-time Teton County residents, quickly-rising property taxes are a quickly-rising problem.

In that context, a Homeowner’s Exemption is not a bad idea. It is a bad idea, though, if it’s implemented in the way advocates of the 50% Solution currently propose; i.e., as a standalone “solution,” without consideration of its broader consequences.

There are two reasons for this.

First, the 50% Solution is a one-off reset. It will shield 50% of the assessed value of a primary residence but do nothing to insulate property owners from the fundamental cause of the problem: rapidly rising property values.

Whether or not the 50% Solution is adopted, property taxes will continue to be tied to property values. As those continue to rise, the underlying problem will quickly reemerge. In that way, the 50% Solution won’t cure the underlying problem. Instead, it will simply put a Band-Aid on a symptom.

Second, advocates are not presenting the 50% Solution with integrity. Instead, they’re telling people what they want to hear without mentioning – much less addressing – the costs. Until the advocates prove themselves as willing to eat their broccoli as they are their dessert, their proposals are not to be trusted.

Addressing the problem

So what would I do? Four steps come to mind.

First, I’d pursue the MOTH idea I described in my last newsletter. It wouldn’t help much, but it would help some, particularly for those with lower incomes.

Second, I’d put a lot more money into the state’s property tax refund program. In 2022, 442 Teton County residents – roughly 6% of local homeowners – received an average of around $3,500 in property tax refunds from the state. Statewide, $8.3 million was refunded. As I see it, rather than adopt the 50% Solution or its ilk, Wyoming would be far better off to keep its funding system intact while dramatically boosting the refund program.

Third, I’d help fund the property tax refund program by implementing a real estate transfer tax.

Two simple realities inform this idea:

• Combined, Teton County’s residential properties are worth more than all of Wyoming’s coal properties; and
• Combined, Wyoming’s residential properties are worth more than either its oil or natural gas properties.

Yet real estate sales go untaxed. Which is weird in a number of ways, especially because taxing a property sale is in some ways far more equitable than levying an annual property tax. (Figure 13)

Steps 1-3 could be implemented fairly quickly. Step 4 is much harder and, if done with integrity, would take a lot of time and effort. With every passing year, though, it’s a step that becomes increasingly important to take: Align Wyoming’s taxing system with the state’s changing economy.

Here’s what I mean.

Sales taxes are the single biggest funding source for Teton County’s local government, accounting for about 50% of general fund revenues. Yet taxable sales account for no more than one-seventh of all local economic activity, and likely less.

Specifically, in 2022, the most recent year for which we have comprehensive data, Teton County’s economic activity broke down like this:

• Taxable sales = $2.31 billion
• Real estate sales = $2.25 billion
• Wages & salaries = $2.28 billion
• Professional services & recreation sales = $2.51 billion
• Investment & other income = $7.18 billion

Of these, only taxable sales helped fund state and local government. (Figure 14)

Because Teton County has no mineral/mining-based economy, its numbers differ from the state as a whole. That noted, the same basic phenomenon holds statewide: Wyoming’s taxation system is well-matched to its economy of 50-100 years ago, but is increasingly out of touch with the economies of today and tomorrow. Until that fundamental disconnect is addressed, the state’s very real property tax problem will become increasingly worse. And that’s a reality the 50% Solution doesn’t address.

Hello, and Happy almost-New Year!

It’s the time of year when the media feature pieces like “This Year’s Biggest Stories” and “The Best of 2023.”

Along these lines, in this newsletter I’d like to explore an issue I’ve not only heard a lot about, but which is inexorably shaping Jackson Hole’s future: property taxes.

My point of departure is an observation that may seem counter-intuitive: For a growing number of residents, Jackson Hole is a land-rich, cash-poor community.

This land/cash disconnect is manifesting itself most clearly in the challenges posed by skyrocketing property taxes. In particular, while rising property values have left all property owners much wealthier on paper, that wealth can’t be realized until the property is sold. In the meantime, property owners have to pay taxes out of their income, which for most people isn’t growing as fast as their taxes.

The result is a lot of people increasingly afraid that rising property taxes might force them to sell their homes.

And it’s not just Jackson Hole. Across Wyoming, property taxes are rising. Not as much as in the Tetons, where we “enjoy” the state’s highest property values. But the same taxes-growing-faster-than-wages phenomenon has begun affecting communities across the state.

What to do?

Proposals to cap or freeze property taxes abound. These conversations are similar to ones that occurred in California in 1978, when anger over rapidly rising property taxes led voters to pass Proposition 13. Prop. 13 did a bang-up job capping property tax growth for those who already owned property, but weirdly distorted things for future buyers. Far worse, it wreaked havoc on government finances, leading to major funding problems for education and local government services.

Forty five years later, I’d hate for Wyoming to repeat California’s mistakes. As a result, I’ve spent a lot of time thinking about different ways local government might levy property taxes. The idea described below, which I call the MOTH, would help address the land-rich/cash-poor dilemma by effectively eliminating town and county property taxes on the least valuable 50% of Teton County properties, and lowering them on the next 15%.

In the process, the MOTH would also produce more revenue for local government. In turn, those funds would help mitigate the difficult choices the community must soon make regarding what services local government can afford to provide.

If adopted, would the MOTH fully address Jackson Hole residents’ growing property tax burdens? Nope – not even close. This is because the MOTH would apply only to the property taxes levied by the county and town, which collectively account for just one-eighth of property owners’ tax bills (most property tax revenue goes to fund public education).

That noted, the MOTH would still benefit a lot of folks, especially those most in need of help. It would also help every year going forward, because by design it automatically shields the county’s lower-value properties.

More importantly, simply discussing the MOTH will help the community in two additional ways.

First, it will trigger a dialogue about who we are and where we’re going. Right now, rapidly rising property values and their attendant taxes are changing Jackson Hole into a very different place than it’s been. Is this new Jackson Hole what the community wants? If not, what might we do? To me, that’s a conversation worth having.

Second, I’m concerned that people are losing confidence in government’s ability to address our challenges. Worse still, they’re losing confidence that government is even listening to them. From that perspective, if the MOTH can offer folks a sense that someone in office is at least aware of their concerns, that would be great. Better still will be if we can collectively take steps to address those problems.

• Introduction
• Property Taxes – Mechanics of the Current System
• Property Taxes – Their Role in Government Funding
• Property Taxes – Why They Exploded
• Property Taxes – Why Folks Are Hurting
• Property Taxes – An Alternative Approach (Enter The MOTH)
• The MOTH – Effects on Taxpayers
• The MOTH – Effects on Local Government
• Comment

From my family to yours, may your 2024 be filled with abundant joy, great happiness, and deep contentment.

Jonathan Schechter
Executive Director

Introduction

This essay offers an alternative approach to levying local property taxes in Jackson Hole.

The alternative would make two fundamental changes to the current system:

1. Maximize the property tax rates charged by Teton County and the Town of Jackson.
2. Automatically reimburse taxpayers an amount based on the median value of their property type.

Because this new approach focuses on median property values, I call it the “Middle of the Hole,” or MOTH. If adopted, the MOTH would produce two significant outcomes:

1. 50% of all property owners would pay no property tax to the town and county, and another 15% would pay lower property taxes than they currently do.
2. Local government would receive more property tax revenue than it currently does.

This essay begins by describing the current situation: how property taxes are levied, why they’re important, and the problems they’re causing. Following a description of the MOTH’s mechanics and practical effects, the essay finishes with a few observations about the MOTH’s broader implications.

Property Taxes – Mechanics of the Current System

Property types

The State of Wyoming levies taxes on 12 types of property. Five types of property (the “Big 5″) account for 93% of the total number of properties and 99% of their total value:

• Residential Land (the land on which a home sits);
• Residential Improvements (the dwelling itself);
• Vacant Land (residential land which has no structures on it);
• Commercial Land; and
• Commercial Improvements.

Teton County currently has 26,411 total taxable properties. Drilling down, the three residential property types – Residential Land, Residential Improvements, and Vacant Land – account for 83% of Teton County’s total number of taxable properties, and 88% of their total value. In this way, residential property is to Jackson Hole what hydrocarbons are to the rest of Wyoming: our biggest source of wealth. Unlike minerals, though, residential property can be “mined” over and over and over again. (Figure 1)

Figure 1

Levying property taxes

Levying taxes on the Big 5 is a three-step process.

Step 1: Estimate Market Value

In each of Wyoming’s counties, the assessor estimates the Market Value of each taxable property. By law, a property’s estimated market value must be within 5% of its actual market value.

Step 2: Calculate Assessed Value

Also by law, once the Market Value is determined it is multiplied by 0.095 (9.5%) to determine the Assessed Value.

Step 3: Levy Property Taxes

Property taxes are based on Assessed Value and levied in mills (a mill is one-thousandth of a cent.). Because Teton County’s 2023 base tax rate was 56.229 mills, this year a property worth $1 million would owe $5,342 in taxes. (Figure 2)

Figure 2

In Teton County, 79% of a property’s base tax payment funds public education. Thirteen percent funds local government, and the remaining eight percent goes to a combination of St. John’s Health and the county’s two public conservation efforts: Teton County Weed & Pest and Teton Conservation District.

Two things are notable about the 79% that funds public education:

1. Essentially all of the education-related mill rate is set by the state; and
2. Most of the proceeds go into a pool that funds public schools statewide.

For decades, Teton County received more money back from the statewide pool than we paid in. Because of our rapidly-rising property values, though, today we pay in more than we receive.

Teton County’s government currently levies 7.379 mills out of the 12 it can legally charge. Of that, ½ mill is earmarked for Fire/EMS. For properties in town, this ½ mill goes to the Town of Jackson to fund its share of Fire/EMS. Currently this is the only property tax the town levies. (Figure 3)

Figure 3

Property Taxes – Their Role in Government Funding

Teton County and the Town of Jackson have three basic sources of general fund revenue: sales taxes, property taxes, and “all other.”

All Wyoming governmental entities have a July 1 fiscal year. In FY21 – i.e., the first full year of the COVID pandemic – Teton County and the Town of Jackson had combined general fund revenues of $87.4 million. This year, their budgeted general fund revenues total $107.6 million, a $20.2 million increase (23%) over FY21.

Of the $20.2 million increase, $14.6 million (72%) came from property taxes, with the rest coming from a variety of other sources. $200,000 of the $14.6 million went to the Town of Jackson, and the rest to Teton County’s government.

Sales taxes are the largest source of income for local government. In FY21 sales taxes accounted for 53% of local government’s combined general fund revenues, and property taxes accounted for 17%. This made for a 3.1 to 1 ratio of sales tax revenue to property tax revenue.

In FY24, sales taxes will account for a similar amount of local government’s total general fund revenues: 51%. Because of the sharp rise in property taxes, though, in FY24 property taxes will account for 27% of all local government general fund revenues. This makes FY24’s sales-tax-to-property tax ratio 1.9 to 1. (Figure 4)

Figure 4

Property Taxes – Why They Exploded

For two reasons, 2020 marked a turning point for Jackson Hole’s property tax situation.

First, as noted above, under Wyoming law the County Assessor’s estimated market value of a property must be within 5% of its actual market value. For a variety of reasons, though, through the mid-2010s Teton County’s estimated market values were well below actual market value. As a result, about 10 years ago the state said “Fix it.”

Bringing all of Teton County’s properties up to market value took a couple of years. That resulted in the double-digit property value increases that occurred between 2017- 2019.

Once the re-valuation process was finished, the growth rate returned to earlier levels. Just as that dust was settling, though, COVID hit, and the ensuing flood of pandemic in-migrants drove Jackson Hole’s property values to previously unimaginable heights. As a result, between 2021-2023 the total value of all Jackson Hole properties rose by 71%, twice as fast as 2017-2019’s then-record increase.

Because property taxes are based on property values, the COVID-induced demand for Jackson Hole homes resulted in the recent property tax explosion. (Figure 5)

Figure 5

Property Taxes – Why Folks Are Hurting

In 2013 the median value of all of Teton County’s residential properties (both land and dwellings) was $273,559. Today it’s $1,005,760 – an average annual growth rate of 14%.

In 2013, Teton County’s average annual wage was $38,012. Today it’s $74,412, an average annual growth rate of 7% – half that of property values.

Most of the growth in property values has occurred during the past couple of years. Between 2021-2023, property values grew 30%/year, while wages grew 11%/year. Because property values drive property taxes, over the past couple of years Teton County’s property taxes have risen three times faster than its wages.

Some people have been unable to afford this rapid increase in property taxes. Others have been able to afford it so far, but won’t be able to if property taxes continue to grow faster than wages. Still others may be able to afford the increases in property taxes but may not want to. These folks are asking themselves questions like: “Is living in Jackson Hole worth the extra money I’m paying each year in property taxes?”

For each of these groups, moving away from Jackson Hole has become something between a necessity and an increasingly plausible option. That’s a cruel fate for people who don’t want to move, especially long-time residents who have helped create a place the well-to-do are finding so desirable. Yes, many of these long-time residents will enjoy a huge financial windfall when they sell. But what if they don’t want to sell? Being forced to move for the sin of suddenly finding themselves land-rich and cash-poor is a cruel reward for their extraordinary stewardship of the community.

Property Taxes – An Alternative Approach (Enter The MOTH)

To state the obvious, when it comes to taxes it’s important to treat everyone equitably. Currently, Teton County and the Town of Jackson do that by levying the same number of mills on all property, regardless of value.

There is another way to approach the issue, though; one that also treats everyone equally but produces different outcomes for both taxpayers and local government.

The MOTH differs from the current approach to property taxes (the “Current System”) in two key ways:

1. The MOTH raises the property tax mill levy to the full amount allowed under Wyoming law. Specifically, Teton County’s levy would go from its current 7.379 mills to 12; the Town of Jackson’s would go from its current 0.5 to 8.
2. Upon paying their property taxes, each taxpayer would immediately be reimbursed the tax paid to the town and county, up to the amount levied on the median-value property of that type. (Figure 6)

If enacted, the MOTH would result in 50% of all property owners paying no property taxes to local government, another ~15% paying lower property taxes than they do now, and ~35% paying higher taxes.

(Note: Rather than have someone pay their taxes and then be reimbursed, it would be easier to simply not pay the reimbursed amount. Unfortunately, under Wyoming law the more straightforward approach isn’t legal, while the reimbursement approach is.)

Figure 6

For an example of how the MOTH would work, consider a Residential Improvement (i.e., a dwelling, but not the land it sits on) in the unincorporated county.

In 2023, the median value of all of Teton County’s Residential Improvements was $1,299,050. Currently, someone owning a Residential Improvement worth that amount pays Teton County’s government $911/year in property taxes.

Under the MOTH, the county’s mill levy would go from the current 7.379 to 12, resulting in a $1,481 property tax bill. Once the county received that payment, though, it would automatically reimburse the property owner the same $1,481. As a result, the property owner’s net tax payment would be $0.

Anyone owning a property worth less than the median value would be reimbursed the entire amount they paid the county in property taxes. Anyone owning a property worth more than the median would receive $1,481 back from the county. For about 15% of all taxpayers, that would result in them paying something, but less than what they would pay under the Current System. For the remaining 35%, their property tax bill would be higher than it currently is.

The MOTH – Effects on Taxpayers

The median is the number in the middle of a data set; i.e., half the values fall below the median and half above it.

Because the MOTH is based on the median, under the MOTH half of all property owners would no longer pay any property taxes to local government. Let’s call these folks the Category 1 taxpayers.

Category 2 taxpayers would pay some property tax, but not as much as they do under the Current System. Using the Residential Improvements example from above, Category 2 taxpayers would be those with a dwelling valued between the median value of $1,299,050 and the Tax-Neutral value of $2,098,000.

While the exact percentage would vary for each property type, around 15% of all taxpayers would fall into Category 2.

Category 3 taxpayers would be those owning the remaining, higher-end properties. Under the MOTH, these property owners would pay more in local property taxes than they currently do. Again using the Residential Improvement example from above, anyone owning a dwelling in the unincorporated county valued at more than $2,098,000 would pay higher property taxes under the MOTH than under the Current System.

(Note: Keep in mind that these examples include just the value of the dwelling, not the property on which it lies. There is a separate tax calculation made for Residential Land, which currently has a median value of $653,595. As a result, under the MOTH, a median-valued dwelling worth $1,299,050 sitting on a median-valued lot worth $653,595 – for example, a typical Rafter J house – would pay no local property tax. A Category 2 property owner (i.e., one paying no more than they do now) would be someone with a dwelling worth up to $2,098,000 on a lot worth up to $1,055,000 – think a home in Melody Ranch or the Aspens.

If you want to know the value of any particular property in Teton County, you can CLICK HERE to be connected to the endlessly interesting Teton County GIS server.)

The one-eighth we control

As noted above, the MOTH would apply only to the property taxes levied by Teton County and the Town of Jackson. Because those two entities combined levy only a fraction of all property taxes, if enacted the MOTH would not have a huge effect on any individual taxpayer.

For example, consider once again the median-value $1,299,050 Residential Improvement. Under the MOTH, the owner of that property would end up paying no net property tax to local government. They would, however, still have to pay all other property taxes. As a result, under the MOTH their overall property tax bill would be $911 less than under the Current System (13%). Not a huge amount, but for those on tight budgets every little bit helps.

At the most rarified end of the spectrum, the owners of the highest-valued dwelling in Jackson Hole (its Residential Improvements alone are valued at $30.5 million) would see their overall property tax bill rise 8%, from the Current System’s $162,868 to the MOTH’s $176,252. (Table 1)

The MOTH – Effects on Local Government

If adopted the MOTH would help local government in two ways: financially and politically.

Financial

Currently the highest-valued one-third of Teton County’s “Big 5″ properties account for three-quarters of the properties’ total value. Because of this, despite the fact that the MOTH eliminates or reduces local taxes on roughly two-thirds of all properties, its higher mill levies would result in more tax revenue for Teton County and the Town of Jackson. (Figure 7)

Figure 7

Putting specific numbers on this phenomenon, had the MOTH been in place this year Teton County and the Town of Jackson would have collectively received $2.1 million more in property taxes than under the Current System.

As Table 2 indicates, under the MOTH the town would take in more property tax money than it currently does, and the county would take in less. In the “Comment” section below, I address the obvious problem this creates.

Figure 7

Political

Over the past couple of decades, Teton County and the Town of Jackson have repeatedly tried to get the legislature to pass bills that would help Jackson Hole deal with its singular challenges. Some of these efforts have succeeded; most have not.

Particularly unsuccessful have been efforts to align Jackson Hole’s tax structure with its economy. For example, over the last five years real estate sales have exceeded taxable sales by $1.1 billion (12%). As a result, there’s a strong argument to be made for a real estate transfer tax. Yet like so many other efforts Jackson Hole has made, getting the legislature to approve such a tax has proven a non-starter. (Figure 8)

Figure 8

One reason the legislature gives for saying “No” is that Teton County and the Town of Jackson currently don’t utilize all the revenue-generating tools available to them, in particular property tax mills. If the MOTH were adopted, this objection would be neutralized.

Comment

The MOTH raises four issues that lend themselves to discussion: cost-shifting, revenue distribution, the nature of the community, and the role of local government.

Cost-Shifting

Like graduated income taxes, at its essence the MOTH is a cost-shifting mechanism: It decreases property taxes on less-expensive properties and increases them on more-expensive properties.

Underlying the cost shift is an assumption that, on balance, those who own lower-value properties have lower incomes and are therefore less able to afford sharp increases in property taxes. A related assumption is that those who own higher-value properties make more money, and are therefore better able to afford higher property taxes.

Since assumptions are never 100% correct, under the MOTH those still needing property tax relief could seek it from income-based property tax relief programs. In fact, the MOTH would make such programs more effective because fewer people would turn to them, leaving more money for those truly in need.

One other thing worth noting is that because the MOTH is based on median property values, its reimbursement levels will change along with property values. As a result, it will always benefit those owning less-expensive properties regardless of how property values fluctuate.

While all this describes the MOTH’s mechanics, it begs the larger question: Why change the current system? Any thoughtful debate will ultimately focus on two core issues: the nature of the community, and the role of government. Before discussing those, though, a quick word on distributing MOTH revenues between the town and county governments.

Revenue Distribution

As noted above, while the MOTH would increase local government’s overall property tax revenues by ~$2 million, it would do so unequally: had the MOTH been in effect this year, the town would have taken in $7.8 million more in property tax revenue than under the Current System, and the county $5.8 million less.

While it obviously makes no sense for the county to take such a hit, there are at least two ways to address the distribution imbalance.

The simplest way is reallocation. This could be done by writing a check, altering how much the town and county pay for joint departments (e.g., START and Parks & Rec), or through a variety of other mechanisms.

Another approach is to reduce the amount of money reimbursed to taxpayers. For example, if the MOTH were structured so that taxpayers were reimbursed only 50% of a property type’s median value, the county would take in as much revenue as it currently does.

The problem with the “reduce the reimbursement” approach is that it undercuts the primary reason for implementing the MOTH. For example, by cutting the reimbursement rate from 100% of median to 50%, the number of property owners paying no-or-lower taxes would drop from 65% to 41%. That’s still a lot of people, but it makes the MOTH’s rationale less compelling.

Ultimately, allocation questions aren’t what matters. What matters is this: If the community feels the MOTH is a good idea, it would be folly to let a debate over how to distribute funds scuttle the overall concept.

Indeed, the only question that really matters is whether pursuing the MOTH is in the community’s best interests. To answer that, we first need to develop a better understanding of who we are and where we’re heading.

The Nature of the Community

What kind of community do we want?

Historically, Jackson Hole’s character has been defined by the valley’s geographic isolation. Moving here required residents to make sacrifices ranging from limiting their earning power to enjoying fewer cultural and consumer opportunities. However subliminally, that sense of shared sacrifice forged a community of folks who prioritized “place” over “big city amenities.”

Today, living in Jackson Hole requires far fewer sacrifices. Changes in the economy and improvements in technology and transportation have rendered the valley’s geographic isolation increasingly moot, allowing residents to enjoy an ever-widening range of culture, consumer goods, and other opportunities. These changes have also made it easier to connect to the world beyond the Tetons.

The reduction in challenges has produced a surge in the number of people wanting to live and invest in Jackson Hole. As that has occurred, the price of Jackson Hole’s scarcest commodity – real estate – has skyrocketed, making it harder for all but the wealthiest to afford to live here.

Which raises a fundamental question: Is this the kind of community we want? If not, then we also need to explore a second fundamental question: What is the proper role of government?

The Role of Local Government

Like any other service provider, local government’s biggest expense is its employees. And as with any employee, the biggest expense facing government employees is housing.

Add in the fact that Jackson Hole’s housing prices are rising much faster than local government’s revenues, and the result is this: Within the next few years Jackson Hole will face a reckoning. Like it or not, the community will have to choose between two options: Put substantially more money into local government coffers, or see a reduction in governmental services.

As with so many of the trends currently shaping Jackson Hole, this “Champagne tastes on a beer budget” phenomenon was occurring before the COVID pandemic. Paradoxically, even though COVID amplified a lot of the pressures on the community, for two reasons it also produced short-term budget benefits for local government:

1. When COVID hit, both the town and county greatly tightened their budgets by implementing hiring freezes and cutting costs wherever possible; and
2. Federal money poured in to help local governments cope with the pandemic’s challenges.

Neither of these gains were sustainable, though, so today local government finds its expenses growing faster than its revenues. More ominously, looking down the road a few years expenses will likely grow faster still.

This imbalance can’t last. So what can we do?

One option is to reduce staff. But because the pandemic taught us that asking government employees to constantly work extra hours produces burnout, reducing staff ultimately means cutting services and/or reducing service levels (e.g., plowing streets less frequently or putting fewer cops on the street).

The other option is to raise taxes. This would allow government to maintain its current breadth and depth of services, and perhaps even raise them. Critically, as staff turns over, it would also allow government to promise new employees that they, too, might live in the community they’re being hired to serve.

So we face a lousy choice: fewer services or higher taxes. Making matters more complicated still is the Jackson Hole Conundrum: As the community becomes more economically stratified, an increasing number of residents and businesses will need an increasing amount of help from a government increasingly unable to provide it.

We also can’t ignore the likelihood that, as housing prices continue to rise, people buying high-end homes will expect ever-higher levels of service from local government.

If we choose to maintain or even increase services, how will we pay for them? Until Jackson Hole can figure out a more effective way to work with the legislature, we don’t have many options.

The Essential Question

Wyoming’s tax and trust laws apply in all of the state’s 23 counties. Yet overwhelmingly, newly arrived well-to-do Wyoming residents have chosen to move to Jackson Hole. In 2020, Teton County had 4% of Wyoming’s total population, 18% of its high-end households, and 51% of its high-end income. Today, the population percentage is likely unchanged, but the high-end household and income percentages are almost certainly higher.

So why do the well-to-do want to come here? That’s a question worth exploring. And once we answer that, here’s another: Would those attracted to this place be willing to give back some of the money they’re saving in taxes to help Jackson Hole maintain its essential qualities and, more broadly, its sense of community?

For that, at its essence, is what the MOTH would do – reduce the financial stress on Jackson Hole’s land-rich, cash-poor residents by asking owners of higher-end properties to pay a larger share of government expenses.

Viewed this way, the MOTH is more than a public policy proposal. It can also serve as the catalyst for asking ourselves what we value and what we’re willing to do in support of those values. It won’t be an easy conversation, but this place and this community are well worth it.

Hello, and Happy Thanksgiving!

If, hypothetically, one were a data geek, this time of year would bring anticipation for not just the holidays, but also the release of two indispensable economic data sets. Both look at every American county, allowing for comparisons between Teton County and the rest of the country.

In a few weeks, the Internal Revenue Service (IRS) will release information based on 2021’s tax returns. Last week, the Bureau of Economic Analysis (BEA) released its own set of income- and jobs-related data. These data reflect actual information from 2021, and the BEA’s estimates for 2022.

Here’s the punchline.

According to November 16’s BEA data:

• In 2017, Teton County, WY became the first county in the nation’s history to record a per capita income of more than $200,000 – to be precise, $220,415
  • That year, the US figure was $51,004, 23% of Teton’s
• In 2020, Teton County, WY became the first county in the nation’s history to record a per capita income of more than $300,000 – $300,665
  • The US figure was $59,153, 20% of Teton’s
• In 2022, the BEA estimates that Teton County WY became the first county in the nation’s history to record a per capita income of more than $400,000 – $406,054
  • The US figure was $65,470, 16% of Teton’s

Ponder that for a moment. Last year, every one of Teton County’s 23,287 residents had a mean income of $406,054, more than six times that of the typical American. To an even greater degree than has been true in the past, on a per capita basis Teton County, Wyoming is the wealthiest county in the wealthiest country in the history of the world.

Making things even more surreal is the pace at which change has occurred. In 2016, Teton County’s population was 23,157 and its residents’ total income was $4.53 billion. Six years later, the population was essentially the same – 23,287 – but residents’ total income had doubled, to $9.46 billion. In comparison, for the nation as a whole, income increased by one-third.

To say such growth and change is whiplash-inducing dramatically understates the case. Especially because it’s almost certain the growth has not been equally distributed. Equally likely is that while the overall population hasn’t changed much during that time, its composition has, with new, higher-income residents displacing longer-term lower-income folks.

The fact that COVID occurred in the middle of this transformation hints at how the forces unleashed by the pandemic are shaping Teton County’s present and future. What really interests me, though, is that the same forces changing Jackson Hole are also unmooring every desirable place to live worldwide. The same phenomena are occurring all over the place; they’re just easier to see in the Tetons.

• Income: The Mind Boggles
• Jobs: The Rise of Finance & Professional Services
• Growth and Change
• Conclusion

The essay below dissects the BEA’s numbers. I’ll do another, similar analysis when the IRS figures are released, for they will allow me to examine how widely distributed Teton County’s income growth has been.

To further telegraph my punches, I’ve also been looking into Teton County’s dramatic rise in property taxes. Look for a newsletter on that subject post-Thanksgiving.

During this season of gratitude, please accept my deepest thanks for your interest and support. May you and all those you love enjoy the most wonderful and bountiful Thanksgiving and transition into winter.

Cheers!

Jonathan Schechter
Executive Director

Income: The Mind Boggles

It’s hard to write a compelling narrative about a treasure-trove of data. Rather than subject either you or me to such a fraught exercise, below I offer a smorgasbord of figures I found compelling. Following this homage to Harper’s Index are some thoughts about the data’s implications.

Income

• For 2022, the US Bureau of Economic Analysis estimated Teton County residents’ total personal income was $9.456 billion. With a population of 23,287, this meant that Teton County’s per capita income – the average income for every resident, regardless of age, work status, or any other consideration – was $406,054.
• Teton County’s per capita income of $406,054 led the nation, and marked the 19th consecutive year in which Teton County had the nation’s highest per capita income.

• There are 3,114 counties in America. Teton County’s per capita income is ridiculously higher than any other county’s.
  • In 2022, Teton County’s per capita income of $406,054 was $340,584 higher – 6.2 times higher – than the nation’s overall per capita income of $65,470.
  • In 2022, Teton County’s per capita income of $406,054 was $180,058 higher – 80% higher – than that of second-place Summit County, Utah’s $225,996 (Summit County is the location of Park City).
    • The gap of $180,058 between nation-leading Teton WY and second-place Summit UT was essentially the same as the gap between second-place Summit UT and 2,189th place Perry County, Ohio (per capita income of $45,943).

• The gap between Teton County and the rest of the nation is growing.
  • In 2004, when Teton County first led the nation in per capita income, the gap between Teton County and second place New York County (the island of Manhattan) was 20%. In 2022, the gap between Teton County and second place Summit County was 80%.
  • In 2004, Teton County’s per capita income figure was 3.0 times greater than the nation’s overall per capita income. In 2022, it was 6.2 times greater.

• Investments account for the vast majority of Teton County’s income.
  • In 2022, 74% of Teton County’s income came from investments, 24% from wages, and 2% from pensions and government assistance programs.
  • In 2022, Teton WY’s per capita investment income of $299,811 was 32% higher than Summit UT’s total per capita income.
  • Even though it accounted for “only” 24% of Teton County’s total income, Teton County’s 2022 per capita wage income of $97,712 was, on its own, higher than the total per capita income of all but 64 US counties.

• Teton County has 4% of Wyoming’s population and 22% of its total personal income. Teton County also accounts for 49% of Wyoming residents’ total investment income.
  • In 2022, Wyoming’s overall per capita income was $73,248, just 18% of Teton County’s figure
  • Had Teton County not been part of Wyoming in 2022, the state’s per capita total income would have been $58,361, 19% lower than its actual figure.
  • Had Teton County not been part of Wyoming in 2022, the state’s per capita investment income would have been $13,269. 46% lower than Wyoming’s actual figure of $22,450. (Figure 5)

Jobs: The Rise of Finance & Professional Services

• In 2022, Teton County had 39,800 total jobs – 1.71 jobs per capita. This ranked Teton County 9th in the nation in per capita jobs.
  • In 2022, America’s overall per capita job figure was 0.64, roughly 1/3 of Teton County’s figure.
• In 2022, only 39 of America’s 3,114 counties had more than one job per resident. Of these, just 14 had populations of 20,000 or more (smaller population sizes can skew calculations).
  • Among America’s counties with 20,000 or more residents, Teton County’s 1.71 jobs per capita ranked it second, trailing only New York County’s 1.94 (New York County is the island of Manhattan).

• Over the past decade, among counties with 20,000 or more residents, Teton County’s per capita job figure has consistently been #2 to New York’s #1. During that time, the gap between New York and Teton County has been closing. In 2012, New York City had 33% more jobs per capita than did Teton County. In 2019, the last pre-pandemic year, the figure was 27%. In 2022, it was 13%. (Figure 7)

• The BEA classifies all jobs as either wage-based or self-employed jobs (the latter category includes jobs ranging from real estate agents to remote workers). In 2022, 58% of Teton County’s 39,800 jobs were wage-based jobs. The other 42% were self-employed. In the US, the figures were 74% and 26% respectively.
  • Over time, as the number of remote workers has risen, Teton County’s mix between wage and self-employed jobs has shifted towards self-employment:
    • 2008 was the last year at least 70% of Teton County’s jobs were wage-based
    • 2019 was the last year at least 65% of Teton County’s jobs were wage-based
    • In 2022, 58% of Teton County’s jobs were wage-based. (Figure 8)

• In 2022, Tourism-related jobs (Recreation and Lodging & Restaurants) accounted for 23% of Teton County’s total jobs and 19% of residents’ total wages.
• Also in 2022, Location-Neutral jobs (Finance & Professional Services) were the other largest employment area, accounting for a virtually-identical 22% of the county’s total jobs. In contrast, these better-paying jobs accounted for 26% of residents’ total wages.

• In 2022, Lodging & Restaurants were the biggest employer in the Tourism sector, accounting for 19% of all of Teton County’s jobs.
  • This proportion ranked Teton WY 23rd in the nation, ahead of such well-known tourism destinations as Clark County, Nevada (the location of Las Vegas) and Orange County, Florida (the location of Orlando). It also ranked Teton WY higher than every other major ski county in the US except Summit Colorado (Breckenridge).
• In 2022, Finance was the biggest employer in the Finance/Professional Services sector, accounting for 14% of all of Teton County’s job.
  • This proportion ranked Teton WY 7th in the nation, ahead of such well-known financial centers as Fairfield County, Connecticut (the location of Greenwich) and Suffolk County, Massachusetts (the location of Boston).

Growth and Change

The COVID pandemic didn’t fundamentally change Jackson Hole or other desirable places to live. What it did do, however, was pour gasoline on an already-burning fire of growth and change.

COVID and Remote Working

Arguably COVID’s greatest long-term effect will be that it legitimized remote working. For huge numbers of people, the already stretched-and-frayed umbilical cord connecting work and home was suddenly completely severed, freeing them to live where they wanted to, rather than where work forced them to be. For better or worse, the “beneficiaries” of that liberation were places like Jackson Hole and other Greater Tetons area communities.

The folks best able to take advantage of this fundamental shift are those with Location-Neutral incomes. The most Location-Neutral income of all is, of course, investment income, which continues to pay regardless of where someone lives. For those reliant on wage and salary incomes, jobs in Professional Services and Finance are often Location-Neutral.

From that perspective, Teton County, Wyoming leads the nation in its percentage of Location-Neutral income, as well as its per capita Location-Neutral income amount.

At the other end of the jobs spectrum – i.e., jobs which are Location-Dependent – are those in Tourism, for no one has yet figured out how to remotely load lifts, clean hotel rooms, or serve and cook restaurant meals. This makes it illuminating to compare Jackson Hole’s Location-Neutral and Location-Dependent economic indicators before and after the pandemic hit in 2020.

The table below summarizes how big a pivot the pandemic proved for Teton County. In the three years before the pandemic, Teton County enjoyed good economic growth; in the three years from 2020-2022, it experienced extraordinary growth.

The COVID Pivot

Between 2020-2022, Teton County also experienced an extraordinary – and extraordinarily rapid – shift in the composition of its economy.

Not in its population – Teton County’s population has remained essentially flat since 2016. What has changed, however, is the composition of that population.

Specifically, in the three years between 2016-2019, Teton County’s overall income grew 33%; in the three years between 2019-2022, it grew 56%.

More strikingly, in the three years between 2019-2022, while the mix of residents’ total income didn’t change much – 73% came from investments in 2019, while the figure was 74% in 2022 – what changed dramatically was the composition of its jobs.

• In 2019, 28% of Teton County’s jobs were in Tourism (Recreation, Lodging, and Restaurants). In 2022, only 23% were.
• In 2019, 16% of Teton County’s jobs were Location-Neutral (Finance or Professional Services). In 2022, 22% were.

This was after essentially no change in the job mix between 2016-2019.

Wages Followed Jobs

• In 2019, 25% of Teton County’s wages were in earned in Tourism. In 2022, only 23% were.
• In 2019, 23% of Teton County’s wages were earned in Finance or Professional Services. In 2022, 31% were.

The Biggest Shift in History

What does it all mean? Just this.

Big picture, between 2019-2022, Jackson Hole’s economy changed more than at any other time since 2001, and arguably in its history. As a result, from a socio-economic perspective, today’s Jackson Hole is in an awkward adolescent phase, evolving from taking care of visitors to providing financial and professional services to a worldwide clientele.

Put another way, to see the future of Jackson Hole’s workforce and culture, look more to New York City or San Francisco than other national park gateway communities or tourist Meccas such as Orlando.

Part of this has to do with Wyoming’s wealth-friendly tax and trust laws. But as noted above, while Teton County is home to just 4% of Wyoming’s population, it accounts for 22% of the state’s total personal income and 49% of its investment income. If the well-to-do aren’t living in other parts of Wyoming, other factors must be at work.

What might those other factors be? One is clearly the region’s ecosystem. Respondents to my recently-completed public opinion survey ranked the area’s ecosystem as the thing they most valued about the region – more so than the community and far more so than the economy. But here again, the ecosystem has always been an attractor, so what’s changed?

Geographic Isolation Matters Less

As I’m coming to see things, the biggest drivers of change in Jackson Hole are the technologic and market forces combining to obliterate the importance of Jackson Hole’s geographic isolation.

Throughout history, the Tetons region’s rugged, remote qualities have served to shape not just its culture but its economy. No more. The same global forces that are upending the Earth’s climate, economy, and institutions may not be affecting Jackson Hole’s geologic features, but they are rapidly and profoundly changing pretty much everything else about the region: ecologically, economically, and from a community perspective.

For example, global warming is clearly affecting Jackson Hole’s flora and fauna, terrestrially and aquatically. Similarly, outside forces are affecting the valley’s cultural make-up, as COVID migrants and other newcomers replace others who choose to leave (or perhaps are getting priced out…).

Turnover is nothing new in Jackson Hole, of course – historically, there’s a 10%-15% turnover as one year’s residents are replaced by a similar number of newcomers. What makes the past few years different is the amount of wealth recent newcomers have brought to the community.

Who Are We?

And then there is a really interesting question, one almost existential in capturing just how profound our upheaval is proving to be: Who are we?

More precisely, here’s the question suggested by the BEA data: Are we a Tourism community, or are we a Location-Neutral community? In a Zen Koan-esque fashion, for Jackson Hole the answer is “yes.” In fact, it’s more “yes” than for any other county in America.

The graph below looks at every county in America. The X axis measures the percentage of a county’s Location-Neutral jobs; the Y axis measures the same thing for Tourism jobs (Figure 10)

In 2022, Teton County had an essentially identical percentage of both Tourism jobs (23%) and Location-Neutral jobs (22%). Just three years earlier, the percentages were 28% and 16% respectively.

A Balance Like No Other

That is a wild and rapid swing in the community’s jobs base. Even more striking, though, is that in 2022, Teton County reached a point of equipoise, balanced like no other American county in its large percentage of Location-Neutral jobs and its large percentage of Tourism jobs. As a result, we were in the top 1% of all counties in both categories, a claim no other county could make.

Which is crazy. Why? Because Tourism and Location-Neutral industries have fundamentally different business models.

Different Business Models

As a rule of thumb, Tourism businesses hire a lot of people and pay them relatively low wages. Location-Neutral businesses can also be big employers (think about how many people you see in a bank lobby), but their business model allows them to pay a lot more.

The result is a huge pay gap between the two industries. And even if the pay gap continues to narrow as it has in the last few years, over time Tourism will find it increasingly difficult to compete for employees, making things increasingly difficult for an industry which has long-defined Jackson Hole.

So who are we?

Ultimately, the only way lower-wage industries like Tourism can succeed is to have access to low-cost housing, which in turn requires low-cost land. Arguably, that once was possible in Jackson Hole, for our geographic isolation allowed for housing prices to be more closely tied to the local economy. No longer though – the technology-driven demand to live in our increasingly-connected region has fundamentally shifted the region’s supply/demand balance. And as demand increases, it’s not just Tourism being affected, but any location-dependent industry (e.g., health care, education, and government).

In short, barring fundamental changes to the nation’s economy, any person or industry without a direct link to investment income and other sources of wealth is going to find it increasingly hard to live in Jackson Hole and, ultimately, the greater Tetons region. What we should do about that – if anything – is the fundamental policy question facing not just local government, but the community as a whole.

Conclusion

There is no particular significance to Teton County exceeding $400,000 in per capita income. Any more than there was in us hitting the $300,00 mark two years earlier. Or $200,000 three years before that.

Each level has huge symbolic meaning, though, for each represents – in increasingly stark terms – the forces of growth and change washing over Jackson Hole. Each also represents the kind of community those forces are creating.

America relies on market forces to allocate resources. And while government policy tweaks things a bit here or there, our underlying belief is that the combination of market forces and economic self-maximization produces the best possible outcome for society as a whole.

No state embraces this philosophy as actively as Wyoming, where we consciously limit government powers and have created the nation’s most wealth-friendly tax and trust laws. All this has reached its apotheosis in Teton County where, as noted above, we have 4% of the state’s population and 49% of its investment income.

Does Wealth = Happiness?

So why is there a sense of despair?

My recent survey of the region’s residents not only showed we prioritize the environment over community, and community over the economy, but that we were pessimistic about where things are heading. We’re also not happy about how things are today versus how they were before.

Again, why? We have become rich beyond the dreams of avarice, yet something seems amiss.

Perhaps a clue lies in the obituary of my late friend, the beloved author and Kelly School teacher Ken Thomasma. Mr. Ken loved telling the story of how, in the 1980s, he camped out for several days on the roof of Fred’s Market. He did so to help raise around $150,000 in community donations for supplies the school district simply couldn’t afford.

When Ken climbed onto Fred’s roof, Teton County’s per capita income was around $17,000. As a result, during his “camp-a-thon” Ken was trying raise 10 times what the “average” Jackson Hole resident earned. In today’s dollars, his $150,000 target would be around $450,000. Which is, of course, just a little more than what one “average” Jackson Hole resident earns today.

The idea of someone doing today what Ken did 40 years ago is almost inconceivable. In part that’s because we have so much more money, which of course is a great thing. In part, though, it’s because the equation for how we give back to the community seems to have switched from giving time to giving money.

For me, this reality calls to mind a quote which seems as relevant today as when it was first uttered in 1909, in a speech at UC Berkeley by Lord James Bryce, a British diplomat and historian:

“What will happen when California is filled by fifty millions of people, and its valuation is five times what it is now, and the wealth will be so great that you will find it difficult to know what to do with it? The day will, after all, have only twenty-four hours. Each man will have only one mouth, one pair of ears, and one pair of eyes. There will be more people – as many perhaps as the country can support – and the real question will not be about making more wealth or having more people, but whether the people will then be happier.”

Two Points

From Lord Bryce’s vantage point, the survey results and BEA data seem to make two points.

First, the BEA data affirm what we know in our guts: Jackson Hole is changing, both rapidly and profoundly. The forces washing over the Tetons are the same ones that, across the planet, are producing massive upheaval in not just the world’s economies, but also how we interact and coexist with each other.

Second, despite being the wealthiest county in the wealthiest country in the history of the world, we’re still beset by a number of challenges. Some are inherent to the human condition; others the result of how we allocate our resources and what we choose to prioritize. Collectively, those challenges seem to be creating a community that many folks feel isn’t working well; a once-special place slipping away at an increasingly rapid rate.

Three Questions

Given this, I think we’ve reached a point where we need to ask ourselves three simple questions. Simple to ask; hard to answer.

The first is the one noted above: “Who are we?” What do we care about? What do we want for ourselves?

Historically, we’ve taken who we are for granted. We haven’t had to ask because we haven’t had to think about it. Combined, economic forces and our geographic isolation not only answered the question for us, but gave us an answer we very much liked. As we have become both more connected and more similar to the outside world, however, it’s fair to wonder whether this approach will continue to work.

Second: “Do we like where we’re going? ” The BEA data paint a picture of a rapidly-changing community, one hallmarked not just by increasing wealth, but an increasing concentration of wealth. Perhaps even more important, our economy is becoming increasingly disconnected from the natural world around us.

Throw in a set of governmental tools perfectly suited for the mid-20th century but increasingly feeble today, and it’s pretty clear where, barring significant change, the community and region will be in 10, 20, 50 years. Is that what we want?

Finally, if we don’t like where we’re going, we need to ask ourselves a third, equally important question: “Do we care enough to make meaningful changes?” For absent that passion, any effort will likely be for naught.

Why? Because the forces at play are extremely powerful, and there’s no clear blueprint for addressing them. Part of the answer lies in aligning incentives, in somehow developing a jujitsu-like approach to guide those forces towards where we want to go. But because we’ve never done anything like that, the process will likely be a hard slog.

Many hard slogs end up with a great result. Because there are no guarantees, though, to have a chance of success will require vision, grit, and a profound sense that the community’s future is worth it.

Which, of course, it is. The opportunity is at hand – together, let’s seize it.

Hello, and happy near-Equinox!

When I write these newsletters, my goal is always to come up with some big “AHA!” moment for both myself and my readers. Something that will cause all of us to see ourselves – whether the Tetons region or, with luck, the broader world – through a new lens. To gain an appreciation for not just some new fact, but a new way of viewing what’s going on around us.

That’s my rationale for publishing sporadically – I want to emphasize quality over quantity.

I’m not sure if I hit my AHA goal with this missive, but I sure gave it a try.

The motivations underlying this particular edition are three-fold. One is esoteric; the other two completely pragmatic.

Starting with the latter, pragmatic reason #1 is that the donation window for Old Bill’s Fun Run closes today – Friday, September 15 – at 5:00 pm MDT. Please click HERE to support this newsletter and the other work Charture does to help make ours a better community.

Pragmatic reason #2: Speaking of work Charture does to make ours a better community, please click HERE to take the public opinion survey we’re running. It’s purpose is to gauge residents’ feelings about our region’s present and future. The survey will remain open for another week – until 11:59 pm on Friday, September 22 – and I hope to get as many responses as possible.

Esoteric reason: For months now, the region’s tourism industry has been super-anxious about having a “soft” summer. In the last few days, visitation and sales tax data have been released suggesting it’s been just the opposite.

I created the public opinion survey because I’ve been wondering a lot about whether there’s a disconnect between residents’ perceptions and the realities of where the community is and where we’re heading. The recently-released data only amplified that curiosity, because the “soft summer” fear v. the “good summer” reality seems to reflect an on-going gap between how we view the world and what is actually going on.

Add the three together, and you get today’s newsletter. My hope is that it provides you with a tangible example of why we’re worthy of your support in both filling out the survey and supporting us through Old Bill’s Fun Run.

As always, deepest thanks for your interest and support.

Cheers!

Jonathan Schechter
Executive Director

PS – Please be sure to take our public opinion survey by clicking HERE or scanning the QR code below. Please also encourage everyone you know to do the same.

PPS – Please donate to Charture through Old Bill’s Fun Run by clicking HERE.

Scan this code to link to our survey. Let us know how you feel about the Greater Tetons Area and its future

The Changing Nature of Our Extraordinary Growth Machine

Over the past 25 years, Teton County’s total taxable sales grew 250% – from $659.3 million in the fiscal year ending in July, 1998 to $2.30 billion in the FY ending in July, 2023. Annualized, this is a compounded annual growth rate of 5.1%

During that time, Teton County’s taxable sales have been hallmarked by four periods of steady growth, and three shorter stretches of sharp decline. Over the past year, things have markedly slowed down: between July 2021-July 2022, total taxable sales grew 13.6%; since then, they’ve grown just 2%. In fact, taxable sales have actually declined since their peak in the FY ending December 2022.

Inflation

Because of inflation, though, these numbers tell an incomplete story. Over the last 25 years, as measured by the Consumer Price Index, the US rate of inflation has ranged from 9% to -2%. Correcting for inflation, Teton County’s total taxable sales have grown from a constant dollar figure of $404.0 million in the FY ending in July 1998 to $753.8 million in the FY ending in July 2023, an increase of 87%. Annualized, inflation takes this down to a 2.5% annual growth rate.

It’s as if COVID never happened

Teton County began its climb back from its Great Recession slump in the summer of 2013. Before COVID struck, Teton County’s total taxable sales peaked in February 2020. Between July 2013 and February 2020, in constant dollars taxable sales grew at a very healthy 6.4% annually – 2.5 times greater than our 25 year average.

What I find interesting is that if you extend the pre-COVID growth rate, today we’re basically at the same place we would have been had COVID not struck. A little lower, actually, but not far off the pre-COVID rate of growth. Which, in turn, was essentially the same inflation-adjusted rate of growth as during the previous growth cycles.

Two conclusions

Add it together, and two conclusions emerge.

First, when it’s growing, Teton County’s inflation-adjusted taxable sales growth rate averages between 5% and 6%. That’s a remarkably high and remarkably consistent pace of growth over the past two-and-one-half decades.

Second, from a taxable sales perspective, it’s almost as though the pandemic never struck.

Almost.

One thing that has changed since the pandemic is the mix of sales. Before COVID, businesses oriented towards tourists – lodging, restaurants, bricks-and-mortar retail (“B&M Retail” on the graphs below), and other tourism-oriented businesses – regularly accounted for around 58% of all taxable sales. During the pandemic, that figure dropped as low as 49%. Today, it is around 54%.

COVID’s toll + the Phoenix arises

As the graphs below suggest, our tourism industry got whacked during the first six-to-eight months of COVID, then rebounded sharply as both tourists came (especially during the summer) and prices shot up (especially during the winter).

Local spending saves the day

What saved our taxable sales bacon during the tourism slump was spending by locals, especially on constructing, remodeling, and equipping homes. That was greatly augmented by the rise of on-line shopping: In the summer of 2017, on-line sales accounted for 1% of Teton County’s total retail sales; today they account for around 20%.

Over the last year or so, there has been a noticeable drop in construction, car sales, and retail – both on-line and in locals-oriented bricks and mortar. While tourism numbers have shot up this summer – and with them tourism-related taxable sales – this growth has not been sufficient to boost overall sales. As a result, the local taxable sales economy is in a period of stagnation (in current dollars), if not decline (in constant dollars).

Particularly striking is the decline in construction-related sales, which in constant dollars are 6.4% lower today than they were a year ago. Unfortunately, the data aren’t available to figure out whether this is due to lower prices, a slowing pace of local construction, or some combination.

Nothing compares to property values

All of this pales in comparison, though, to the real elephant in the living room: property values. As robust as our various types of growth have been over the past decade, nothing compares to the growth in property values and, with them, property taxes. This is not only causing tremendous anxiety, disruption, and upheaval today, but for a variety of reasons will continue to do so in the future. Prominent among those reasons is that local government funding is tremendously reliant on sales taxes.

21st century community with a 20th century operating system

Why is this a problem? Because folks paying increasingly high prices for real estate are going to expect increasingly higher levels of service from their local government. To provide those services takes staff. To hire that staff takes revenue. And when the primary source of that revenue is growing slower than housing prices, it becomes increasingly difficult to hire the people needed to provide those services.

That fundamental structural imbalance – the dilemma I’ve labeled “a 21st century community with a 20th century operating system” is a topic for another day. For now, the first step in addressing the dilemma is to align our perceptions with reality – thanks for joining me on the journey.

Hello, and happy September!

Diving right in, this newsletter involves an Ask and an Essay. Thank you in advance for considering the former and reading the latter.

The Ask

The Ask, part 1:

If you live in the Greater Tetons Region – whether full- or part-time – please follow this link to fill out the public opinion survey I am conducting. (Alternatively, you can also access the survey by scanning the QR code below.)
https://research-polls.com/sIwr

The Ask, part 2:

Please share the link with others. My goal is to get as many responses as possible before the survey closes on September 22.

The Why

Over the past year or so, I’ve heard a lot of concerns about where Jackson Hole and, more broadly, the Greater Tetons Region is headed.

How widespread are such perceptions? Rather than speculate, I developed and commissioned a survey to gauge residents’ views about the area and its future.

Gathering responses involves two phases.

Phase 1 just wrapped up. It was a random, statistically valid telephone survey of the region’s residents. (For the survey, I defined the Greater Tetons Region as Jackson Hole, Star Valley, and Teton County, ID.)

To get the broadest possible sense of residents’ attitudes, I’m launching Phase 2 – an all-are-welcome on-line version of the same survey. To take it, please click HERE.

As noted, my goal is to get as many residents as possible to complete the survey (it’s available in both English and Spanish). Hence the Ask.

The on-line survey runs from September 5-22, and I’ll present the initial findings at the September 23 kickoff conference for the Teton Leadership Center. It promises to be a great event, and you can register by clicking HERE.

I’ll also write about the survey’s findings in a future CoThive newsletter.

The Essay

Last month’s Republican presidential debate reminded me anew of how much I dislike election debates.

Local, state, or national, it’s all the same – in my view, debates offer little of value for anyone involved except, perhaps, the media and political professionals.

Why? Because debates reward behaviors and qualities which, at best, are unrelated to good governance. At worst, debates reward behaviors and qualities which are antithetical to good governance.

In this, debates distill the huge and growing disconnect between the qualities needed to be a successful candidate and the qualities needed to successfully govern. The result? Governing bodies filled with people who are great at getting elected, but awful at performing the job they were elected to do.

Why is this so and what might we do differently? I explore these questions in the essay below.

One Other Ask

Much of the funding for the work Charture does – this newsletter for example, or the public opinion survey I hope you’ll fill out – comes from charitable donations.

In Jackson Hole, it’s currently charitable giving season; specifically, it’s Old Bill’s Fun Run season.

For those of you not familiar with Old Bill’s, in 1997 a wealthy Jackson Hole couple partnered with the Community Foundation of Jackson Hole to create one of the nation’s most innovative non-profit fundraisers. Since then, it has raised over $228 million to support local non-profits, an average of over $8.8 million/year to help make Jackson Hole a better place for everyone.

Every Jackson Hole non-profit is eligible to participate in Old Bill’s Fun Run, and every dollar they raise up to $30,000 is matched by Old Bill’s donors (the match is usually around 50%).

Old Bill’s funding is vital to Charture’s operations. If you value this newsletter and our other work, please donate to Charture through this year’s Old Bill’s Fun Run by clicking HERE.

As always, deepest thanks for your interest and support.

Cheers!

Jonathan Schechter
Executive Director

PS – Please be sure to take our public opinion survey by clicking HERE or scanning the QR code below. Please also encourage everyone you know to do the same.

PPS – Please donate to Charture through Old Bill’s Fun Run by clicking HERE.

Scan this code to link to our survey. Let us know how you feel about the Greater Tetons Area and its future

The Great Campaign/Governance Paradox

“As the playoff race heats up heading into September, major league baseball has done the impossible: It has rescued itself from irrelevance — not through luck, but by identifying what was wrong about the way it was operating and having the guts to make fundamental changes.

“… If 147-year-old major league baseball can rewrite its rules to address its existential challenges, then maybe there’s hope that this even older and even more rule-bound country can do the same for issues with far bigger stakes.”
– Bryan Walsh; What America can learn from baseball (yes, baseball); Vox Magazine; September 1, 2023

Here’s my dream: We can have better government.

I say this as someone who has spent nearly half of the last three decades serving as a local elected official: 8+ years on the board of St. John’s Health; 4+ years on the Jackson Town Council.

From this perch, I’ve come to believe a fundamental problem – perhaps the fundamental problem – with government at all levels is not who we elect, but how we elect them. In other words, our governance system is a mess because our hiring process is a mess – particularly at the state and federal levels.

In a nutshell, here’s the problem.

• The skills discrepancy
  • Being an effective candidate for office requires a certain set of skills.
  • Being an effective elected official requires a different set of skills.
  • Unfortunately, the skills you need to be an effective candidate arguably harm your ability to be an effective elected official, and vice-versa.
• The consequences
  • Our elections identify and reward people who are good at running for office. What they do not do is identify and reward people who can actually govern.
  • As a result, we end up with governing bodies stocked with people who can’t or won’t govern, creating governing bodies that don’t work well.
• Bonus observation: all of this is made dramatically worse by the current media environment – especially social media.

Context

I hold two firm beliefs about our community, nation, and planet.

First, we as a species can be no healthier than our ecosystems.

Second, we as a society can be no healthier than our institutions.

These two beliefs frame my professional and political careers. In both, my ultimate goals are to help us preserve and protect our area’s ecosystem, and to ensure well-functioning institutions.

In this context, it’s been disheartening to see – heck, it’s been disheartening to live through – the steady erosion of faith in our institutions. And not just government. Every year, Gallup asks Americans about their confidence in institutions ranging from the federal government to organized religion; from big business to public schools. Since peaking in the early 2000s (around the time of 9/11), Americans’ confidence has declined in every institution in Gallup’s survey.

Most strikingly, between 2002-2023 the four institutions experiencing the biggest drops in confidence were:

• Newspapers (a 49% drop during that time, down to 18%)
• the Presidency (a 55% drop, down to 26%);
• TV news (a 60% drop, down to 14%); and
• Congress (a 72% drop, down to 8%)

To me, the four are inextricably linked through the process of how we elect people to office.

Running v. serving

Running for office and being in office are very different worlds. For example, how does each define success?

In elections, that’s clear: Success equals winning. It’s an easy metric. It’s also a metric which – like that of a baseball game – can be easily understood and endlessly evaluated both before and after the event. And just like sports, campaigns are perfect fodder for all flavors of media – conventional and social.

Also like any sport, running for office is a zero-sum game: Either I win or you do. Therefore, my job is to get a whole bunch of people – few of whom actually know me – to either vote for me or, as importantly, to vote against you.

How do I do that? By drawing attention to myself through soundbites. Controversy. Hot-button assertions. Attacks on my opponent. Focusing on bright shiny objects. Emphasizing noise over signal. A host of stuff perfectly aligned with social media.

Some people are very good at these things. In politics, we increasingly reward them by electing them to office.

What about when you win? What is success for those in office? Defining that is much murkier. If it’s passing legislation, that requires a very different set of skills than winning an election.

In particular, while the goal in both elections and passing legislation is to get 50%+1 of the votes, the two different goals require two very different paths. For example, to succeed in elections many candidates opt to attack their foes. Try that when you’re in office, though, and all you’ll do is alienate someone whose vote you need.

Similarly, elections place a premium on playing a short-term, tactical game. In contrast, success in governance requires long-term thinking, for the legislative process is anything but quick. Further, as that long-term process plays out, you need to keep your eye on the prize, even if that means not drawing attention to yourself.

The list goes on and on, and it results in the great paradox of our system of governance: If I act in a campaign as I must act to succeed as an elected official, I probably won’t get elected in the first place.

The problem

The great campaign/governance paradox is perfectly distilled in our political debates.

For example, consider last month’s shout-fest between eight Republican presidential candidates. The event rewarded those candidates who preened for the cameras and studio audience, talked over the other participants, threw out zingers and soundbites, and generally did whatever they could to attract attention to themselves and/or make their opponents look bad.

What spoils did the victors enjoy? Media attention. The media lapped it up because, as with sporting events, dissecting debates and campaigns is an easy way to fill up space and generate buzz. The political class likes it too, because their job is to provide succor to candidates who, during campaigns, are among the most profoundly insecure people in the world.

Where debates fail – and fail hugely – is in serving democracy. In serving the governance process. In serving you and me. What those two hours of debate did not do is give us any sense of whether the candidates could actually govern. Could actually make government work. Could do anything to make society work.

On a larger level, the same is true of campaigns in general. In that vein, what really worries me is the growing body of evidence suggesting that, at all levels of government, we are electing people who are tremendous at running – tremendous at drawing attention to themselves by saying outlandish things, hurling scurrilous charges, and otherwise ginning up controversy – but have no interest in actually governing.

Hence, if they win, what do they do? Keep campaigning. And what do they not do? Govern.

This is governance as Kabuki, a stylized performance whose purpose is not actual governance, but getting re-elected. Our political system rewards not the abstractness of governance, but the concrete reality of elections. As a result, for that growing number of folks whose primary goal is getting re-elected, they find that the best use of their time in office is not to govern, but to basically keep the campaign going. It’s less work, less risk, draws more attention, and has a much bigger pay-off.

Unfortunately, as more elected officials take a transactional approach to office and prioritize their interests over those of the governing body, society pays the price of an increasingly dysfunctional government. The net result? A steady decline in the confidence people have in their government. Which, of course, only makes it that much easier to run against the system. And so the downwards spiral builds upon itself.

A partial solution

So what to do?

The essence of my suggested change is to do all we can to make campaigns focus on the job we actually elect officials to do: govern.

It’s pretty simple, actually. Let’s do all we can to highlight candidates’ governance-oriented skills while working equally hard to reject things that don’t matter to the governance process.

Sadly, on a national level, we can’t do much. Locally, though, we have two levers for making change.

Lever 1: Candidate Debates

Debates are one of the rituals of local campaigns. Candidates face a panel of reporters and are asked questions about things the media think are important. While such questions tell us a lot about local media’s priorities, for two reasons they rarely shine any light on candidates’ ability to govern.

Reason one is the nature of issues. For the most part the issues raised in debates are either essentially unsolvable – think housing or traffic – or ephemeral: e.g., last fall’s non-issue of “Save the Fairgrounds.” As a result, during debates candidates tend to end up sounding pretty much the same.

Reason two is that, because they come and go, issues are not really what matters. Instead, over the course of a term in office, what really matters is an official’s ability to effectively address the issues that arise.

To that end, we should be asking candidates not what they care about, but whether they understand how government works. Not how they would address a particular issue, but how they would get their colleagues to support their proposed solution. Because if they can’t get a majority of their colleagues to vote with them, nothing will get done.

As an alternative to the current system, my suggestion is to conduct what I call the “Free Market Debates.” By this I mean that organizers should devote most of a debate’s time to letting candidates talk about whatever they think is important. Don’t ask candidates about issues. Instead, ask them what they feel is important for voters to know and let them rip. Or blather. Or whatever they might do.

What the candidates say and, critically, what they don’t say will give voters far more insight into the candidates than anodyne responses to questions about intractable issues.

In the same way that all markets need some structure, though, Free Market Debates should not be entirely free form. Instead, specific questions should be asked about candidates’ understanding of the governance process, their governance experience, and their ability to get things done within the system.

We should also tell the candidates well in advance what the agenda will be. Why? Because the kinds of surprise questions that make debates feel like game shows have zero connection to governance.

The game show-cum-sporting event approach to debates emphasizes surprise questions because they add drama and intrigue to the spectacle. But do you know what governance rarely involves? Surprise. Drama. Intrigue. Instead, for the most part governance involves studying lengthy reports well in advance of a meeting, asking detailed questions, and being willing to wait if it’s too soon to make a decision.

Dull stuff, but this slow, plodding process is the warp-and-woof of governance. And what’s not required to succeed in this dull environment – in fact, what works against succeeding in this slow, plodding process – is the ability to quickly come up with sound bites, zingers, and glib responses.

So why structure debates in ways completely unrelated to governance? Elected officials know well in advance what issues they’ll be hearing. Let’s have our debates reflect that reality.

Lever 2: Candidate profiles

The second lever is basically a print version of the first.

Currently, during debates reporters ask candidates about issues the media think are important. Newspaper and web-based candidate profiles do the same. Because issues are usually complex, and because space is usually limited, the almost-inevitable result is that candidates provide answers which make them all sound pretty much the same. Worse, the questions posed never ask about a candidate’s understanding of the job, nor their ability to govern.

Instead, let’s structure candidate profiles so that candidates use the space to identify their priorities. Let’s also ask the candidates what they know about governance and the realities of the job. This will allow voters to focus on who will make a good elected official and not just a good candidate.

Conclusion

We can’t change human nature. As a result, candidates will continue to attack each other, raise phony issues, and otherwise continue to do all the other things that make campaigns so painful for candidates and voters alike.

We also can’t change the national political system. As a result of that, we will continue to suffer through our current– and thoroughly dreadful – politics as game show/sporting event approach to elections.

Locally, though, I believe we can do better. Know we must do better. Just like baseball, we know the problems. And just like baseball, we can find the guts to change. For the same basic reason – it’s the right thing to do to save an institution we so desperately need.

Hello, and happy mid-summer!

Over the past couple of months, I’ve enjoyed a lot of off-the-grid outdoors time. Re-entry’s been a slog, though, especially digging out from the seemingly bottomless pile of daily life stuff.

One of the many emails that fell between the cracks was from a long-time friend who raised an interesting question: Is there any way to track the effects of all the new money flooding into Jackson Hole over the past few years? Today’s newsletter is both an effort to answer that question and, more personally, to atone for not responding more promptly to my friend.

The essay below focuses on Jackson Hole’s charitable giving patterns. I chose the topic for four reasons:

• It’s the only readily-available metric I know for gauging wealthy residents’ actions and priorities.
• There is a deep and on-going debate whether the wealthy folks coming into Jackson Hole “get” the community. Are they as philanthropically minded as earlier generations of well-to-do Teton County residents? If so, are their donations a way of supporting Jackson Hole’s ethos and character? Or is their giving more akin to a modern-day papal indulgence?
• There is a large and growing chasm between Jackson Hole’s economy and how we fund government. As a result, there is a large and growing chasm between what local government can afford to do and what the community wants it to do. Unless and until Wyoming alters how local government is funded, the level of services enjoyed by the community will increasingly be a function of philanthropic giving.
• Locally, ‘tis the charitable giving season: Teton Valley’s annual Tin Cup race was two weeks ago, and Jackson Hole’s annual Old Bill’s Fun Run is coming up in six weeks (click HERE for more information; click HERE to go to the Donations page – donations can be made from August 11 – September 15).

The essay below is structured around my three major findings:

• Teton County’s income and giving patterns are completely dominated by the well-to-do, particularly their non-wage income.
• Over the past few years, as Teton County’s wealth has increased, so have its charitable giving metrics. Less clear is whether the growing metrics reflect an actual increase in giving or are simply statistical anomalies.
• While Teton County leads the nation in some key charitable giving metrics, others suggest residents have the capacity to donate several hundred million additional dollars each year.
• Teton County’s income and giving patterns are completely dominated by the well-to-do
• Coincident with Teton County’s influx of wealth has been an increase in charitable giving
• Teton County appears to have the capacity for far greater charitable giving than current levels

One final thought

One final note. Although my research focuses on Teton County, WY, my strong hunch is that the same basic trends are playing out in every other desirable place to live. For readers living outside Jackson Hole, are you seeing similar patterns in your communities?

As always, deepest thanks for your interest and support.

Cheers!

Jonathan Schechter
Executive Director

Teton County’s income and giving patterns are completely dominated by the well-to-do

Since 2010, for every county in America, the IRS has reported a wide variety of income tax data (the most recent year is 2020). Not just the number of returns filed and total income, but other tidbits such as how that income is earned, charitable deductions, and total tax liability.

The IRS also breaks tax returns into income categories, the highest of which is households reporting an Adjusted Gross Income (AGI) of $200,000 or more. To make the nomenclature easier, I’ll refer to these as “high-income households,” and those earning under $200,000/year as “lower-income households.”

Before getting into the analysis, two caveats:

• While the IRS data show total itemized deductions claimed for charitable giving, they do not show where that money went; i.e., how much was donated to Teton County non-profits, and how much was donated outside Teton County. (The data also exclude donations not claimed as a deduction, which history suggests is a small percentage of the overall total).
• Federal tax reform legislation passed in 2017 significantly lowered the tax benefits of charitable donations for everyone except the ultra-wealthy. The consequences became evident in 2018’s tax return data, and have remained that way since.

2010

In 2010, 12,833 Teton County, Wyoming households filed an income tax return. Their total AGI was $2.76 billion, yielding a mean per-household income of $215,305. This was the nation’s second-highest per-household income, trailing only Billings County, North Dakota (which enjoyed a one year income spike thanks to being located at the heart of the Bakken fracking boom).

That same year, 944 of Teton County’s households – 7% of the county’s total – were high-income households. Collectively, those households earned $2.22 billion, which accounted for 80% of residents’ total AGI. Their mean household AGI was $2.35 million.

Also in 2010, Teton County had 11,889 lower-income households, 93% of the total. Collectively, they earned $541 million, or 20% of the county’s total. Their mean household AGI was $45,521.

2020

In 2020, 14,700 Teton County households filed an income tax return, a 15% increase from 2010. The county’s total AGI was $6.70 billion, 142% more than ten years earlier. Teton County’s mean per-return income was a nation-leading $455,855, 112% higher than in 2010.

That same year, 2,440 Teton County’s households – 17% of the county’s total, or one out of every six households – were high-income. Those households earned a combined $5.99 billion, 89% of residents’ total AGI. Their mean AGI was $2.46 million, 4% higher than in 2010.

Also in 2020, Teton County had 12,260 lower-income households: 83% of the total, or five out of every six households. Collectively, these households earned $708 million. Although this was 31% more than in 2010, the lower-income households’ share of the county’s total income fell from 20% to 11%. In 2020, the mean AGI of lower-income households was $57,746, 27% more than in 2010.

2010-2020

Between 2010 and 2020, essentially all the growth in Teton County’s households and income occurred among the well-to-do – high-income households accounted for 80% of the county’s household growth and 96% of its income growth.

In both 2010 and 2020, the mean income of Teton County’s high-income households was about 50 times greater than the mean income of its lower-income households. In both years, that disparity led the nation.

To put Teton County’s wealth disparity into context, in 2020 Teton County had 2,440 high-income households. Collectively, they earned $5.99 billion.

In contrast, between 2012 and 2020 a total of 111,570 Teton County households earned under $200,000. Collectively, those lower-income households reported a total AGI of $5.83 billion.

Compare the two, and in 2020 – in just one year – Teton County’s 2,440 high-income households made more money than over 111,000 Teton County lower-income households combined made during the nine years spanning 2012-2020. To grossly understate the case, that is an impressive amount of wealth concentration.

Why the great disparity? In part it’s because Teton County’s high-income households not only earned much more income than the rest of the community, but a different kind of income.

In particular, as the graph below shows, the bulk of all the income earned by Teton County lower-income households comes from wages and salaries. Further, for those households “non-wage income” is primarily pensions.

It’s just the opposite for high-income households, who make the vast majority of their income from non-wage investments.

Coincident with Teton County’s influx of wealth has been an increase in charitable giving

Because tax law incentivizes the well-to-do to make charitable contributions, tax return data on charitable donations is dominated by high-income households. For example, for the US as a whole in 2020, high-income households were responsible for $136 billion of the $193 billion Americans claimed in charitable donations: 71%. In Teton County, the figures were $416 million of the $422 million total: 99%.

Ten years earlier, the situation was much different. In 2010, high-income homes accounted for just 40% Americans’ total itemized charitable deductions: $68 billion out of $169 billion. In Teton County the figure was 97%: $248 million out of $257 million.

The cause of the change was 2017’s “Tax Cuts and Jobs Act” which, in the words of the Tax Policy Center, discouraged charitable giving by reducing “the value and incentive effect of all tax deductions… raising the after-tax cost of donating by about 7 percent. Unless taxpayers increase their net sacrifice – that is, charitable gifts less tax subsidies – charities and those who benefit from their charitable works, not the taxpayers, will bear the brunt of these changes.”

The law certainly had an effect on Teton County.

As the graph below shows, from 2010-2017, each year an average of 86% of Teton County’s high-income households claimed deductions for charitable giving. From 2018-2020, the average dropped to 60%.

Interestingly, the law did not seem to affect total itemized donations, which were flat between 2017 and 2018, then spiked in 2019.

Put the two together, and for the past 11 years, annual mean donation figures have bounced all over the place. This is because any one year’s charitable deduction claims can be wildly influenced by the actions of just a few tremendously wealthy households.

Sadly, this variability makes it hard to draw any firm conclusions about how either the 2017 tax law or the 2020 COVID in-migration affected Teton County’s giving patterns. To try to work around this problem, I combined the data into two larger time periods: the three years before the act took effect (2015-2017) and the three years following (2018-2020).

2015-2017

Between 2015-2017, Teton County’s high-income households had the nation’s second-highest mean per-return household AGI: $1,788,883. (We would have been first had a few residents of the lightly-populated Dixie County, FL not enjoyed a one-time, one-year income surge.)

During that same period, our $128,040 mean per-return donation figure was also second in the nation, trailing only Benton County, Arkansas’s $135,989. (Benton County is the location of Walmart’s headquarters.)

Where we lagged was in donations as a percent of total AGI. During those three years, our high-income mean donation rate 7.2% of AGI ranked us 54th in the nation. In contrast, Benton County’s well-to-do citizens gave 13.2% of their income to charitable causes, ranking them 3rd nationally.

2018-2020

Things were different for the period 2018-2020.

During those three years, Teton County led the nation in high-end income, with a mean AGI of $1,983,033. This was 11% more than in 2015-2017

What’s striking is that during the three years following the “Tax Cut and Jobs Act,” Teton County’s high-income households actually claimed a higher level of charitable deductions than they had in the three previous years.

In particular, during 2018-2020, Teton County’s mean charitable deduction rose to a nation-leading $167,659, 31% more than in 2015-2017. Further, those donations represented 8.5% of Teton County’s total high-end income, 10th highest nationally and an 18% increase over the earlier period’s 7.2%.

As a result, while we can’t say anything specifically about COVID’s effects on charitable giving, at first blush it seems that over the past few years, local charitable giving has surged. While I hope that’s the case, the underlying explanation may be far more prosaic – a function of basic math rather than a more charitable mindset.

A huge mathematical caveat

Between 2015-2017, an average of 86% of America’s high-end households claimed a deduction for charitable donations. Between 2018-2020, that figure fell to 46%.

For Teton County, the figures were 82% and 60% respectively.

The basic reason for these declines was that, for all but the very wealthiest Americans, the “Tax Cut and Jobs Act” reduced the incentive to take charitable deductions. As a result, the people who continued to claim charitable deductions tended to be those making the most money. Which was, of course, a large and growing element of Teton County’s population.

This change in incentives discouraged a lot of lower-income folks from making – or at least itemizing – charitable donations: In 2017, 18% of Teton County’s lower-income households itemized their charitable donations; in 2020 that figure was 6%. Even among the well-to-do, the changes hit hard: in 2017, 82% of Teton County’s high-income households itemized their charitable donations; in 2020 that figure was 57%.

As a result, starting in 2018 the pool of people claiming charitable donation tax deductions became much more concentrated at the higher end than it had been before. Do the math, and the inevitable result is a higher overall average.

Here’s an example. Imagine that, in 2017, five households each itemized their charitable donations. The biggest donation was $34; the rest were $26, $18, $12, and $10. The total amount donated was $100, an average of $20/donation.

Now skip ahead a year. Keeping everything else the same except the tax law changes, there was no longer any incentive for 2017’s smaller donors to itemize their donations (and perhaps not donate at all). Eliminate those bottom two donations, and the total amount given falls to $78. The mean donation, however, rises to $26.

It seems likely something similar happened in response to the “Tax Cut and Jobs Act”: those well-to-do Teton County residents who continue to claim charitable donation deductions were those who made more money and larger donations. It also helps explain why the number of high-income households rose more sharply from 2018-2020 – 16% – than did the number of high-income households claiming charitable deductions: 6%

What this argument doesn’t explain why overall donations rose, but there again annual donation figures are subject to pretty big swings.

Teton County appears to have the capacity for far greater charitable giving than current levels

As noted above, in the years 2018-2020, Teton County’s high-income households led the nation in mean annual giving, with a per-return figure of $167,659. In a distant second place was Benton County, Arkansas, at $127,584.

Where Benton County’s high-income households had a leg up on Teton County was in the proportion of total income they donated to charities: a nation-leading 13.5%, versus Teton County’s 10th place 8.5%.

Benton County’s high-income households also led the nation in their proportion of non-wage income donated to charities: 19.4%, essentially double Teton County’s 60th-place 9.8%.

Viewed through this lens, it suggests that while Teton County has a strong culture of charitable giving, it also has the capacity to give more. A lot more.

Specifically, if in the three years between 2018-2020, Teton County’s high-income households had donated the same percentage of their total AGI as did Benton County’s, Teton County residents would have donated an average of an additional $226 million each year to charitable causes – 59% more than they actually gave.

Similarly, had Teton County high-income residents matched Benton County’s percentage of non-wage AGI, they would have donated an average of an additional $369 million per year, an increase of 97%.

Before going any further, two observations.

First, it’s easy for me to say “they could have donated a lot more” because it’s not my money.

Second, as noted earlier, even if Teton County’s well-to-do donated more, there’s no guarantee the money would be donated to Teton County non-profits.

Still, while it’s clear that Teton County has historically cultivated a culture of giving, due to the annual vagaries of giving patterns and the timing of the “Tax Cuts and Jobs Act,” it’s not clear whether that giving culture has been embraced by the influx of residents who’ve arrived in the past few years. We can hope it has, but unfortunately the data won’t settle the debate.

Donations as a percentage of income

So what might give clarity? What might be a clear indicator that new arrivals have embraced Teton County’s culture of giving?

Again, it ain’t my money, but I can think of no better measurement of our charitable giving culture than “Donations as a Percentage of Income.” In particular, the goal would be for Teton County to lead the nation in the proportion of income its high-income households donate to charitable causes.

Is this possible? Arguing for it is the fact that between 2010-2020, Teton County’s high-income households led the nation in mean per-return giving five times, ranked 2nd three times, and ranked either 3rd or 4th the other three years.

When it comes to “Donations as a Percentage of Income,” though, we’ve not done nearly as well. Specifically, between 2010-2020, the best we ever did is rank 3rd one year. In three other years we placed in the Top 25; in the remaining seven we didn’t even crack the Top 50.

Which is baffling, especially when you consider that Wyoming is America’s most wealth-friendly state. Given that, how is it that counties in less wealth-friendly states can donate so much more than we do? Especially when Teton County is the wealthiest county in the wealthiest country in the history of the world?

So which counties rank highest in average giving percentage? As a rule of thumb, they fall into one of two camps. One is lightly-populated counties in southern states, where large numbers of residents belong to evangelical churches. The other is counties in Utah and Idaho with high concentrations of members of the LDS church.

Teton County falls into neither category. Nor does Benton County, which makes it such a good place to compare ourselves to.

One final thought

Looking at the list of counties which rank highest in “Donations as a Percentage of Income,” it’s striking how living in an intensely religious environment can correlate with great generosity.

Without meaning to blaspheme the sacred, I’m also struck by how many people wax spiritual when they speak of the Tetons region. In that light, I can’t help but wonder whether the non-religious spirituality Jackson Hole evokes might lead Jackson Hole’s well-to-do residents to donate even more of their wealth to causes of their choosing – even in this community of abundance, the need is certainly there.

Many of our well-to-do residents have already made a mark on the world. How wonderful would it be if this extraordinary place can inspire people – especially those new to the region – to use their wealth to have an even greater effect on their community, region, nation, and world.