CHEYENNE -- Two major property tax relief bills are prefiled for the 2008 legislative session that opens this week.

But legislators say both big-ticket bills face a tough slog because of reduced state revenue estimates.

Sens. Grant Larson, R-Jackson, and Eli Bebout, R-Riverton, are co-sponsors of Senate File 55, which would reduce the assessment rate by one-half of 1 percent on all property, residential and industrial.

The broad-based property tax relief would cost $50 million for two years beginning Jan. 1, 2010, according to the Legislative Service Office fiscal note.

Larson, who has worked on property tax relief for years, said he had hoped this year the Legislature would finally be able to do something meaningful.

"Yeah, it's expensive. Frankly, it's about one of the only thing that the Legislature still has the ability to do to address the property tax problem," Larson said.

"The only way to readdress the problem is to get a constitutional amendment to change the method of assessments," he said.

"I still feel that way, but in the meantime we have to do what we can do for the taxpayers of Wyoming," he added.

The problem has been prevalent in western Wyoming for years, but now it is becoming apparent in other parts of the state.

"I just want to see us try and get something done when we supposedly had a little money, but now I'm not sure we do," Larson said. "With this budget crunch we're going to have and the reduction in the estimates, it's going to be very, very difficult to get anything done."

New Senate Majority Leader Jim Anderson, R-Glenrock, agreed.

"The revenue situation has changed dramatically since August," Anderson said. "I would say there is much less chance of these bills passing now than there was when they were created."

"In this climate of uncertainty, about all we can do is be very cautious," he added.

The current property tax system, added to the constitution in 1988, Larson said, works well in a declining real estate market but not in a market that is escalating.

"It penalizes people who have been here a long time and want to stay in their houses. Their taxes go up several hundred percent just because of where they live, not because of anything they have done to their homes," Larson said in a telephone interview.

Larson said he is a co-sponsor of about seven property tax relief bills that are being drafted. Some are duplicates and others may not be introduced, he said.

New House Speaker Colin Simpson, R-Cody, is sponsoring a bill similar to Senate File 55.

House Bill 68, sponsored by the Joint Interim Revenue Committee, would allow nearly 157,000 homeowners an average property tax cut of $256 per year. The cost is an estimated $40 million per year.

Property owners who have lived in their homes for three years would receive a $4,400 exemption on their assessed valuation regardless of the value of their homes.

The original bill, supported by Gov. Dave Freudenthal, provided for a $5,000 exemption on residences with a total market value of $237,000 or less. It would cost an estimated $38 million for an average tax exemption of $278.

Simpson said he still expects his bill to have a good chance of passing. Tax cuts are especially appropriate now that the economy has soured, he said.

"I think it’s still appropriate to give some tax relief when people are hurting the way we are," Simpson said.

Sen. Kit Jennings, R-Casper, is sponsoring Senate File 53 to expand the current deferred property tax program. Because it doesn't cost the state anything, it probably will get a better reception than the bills with multimillion-dollar appropriations.

The current program is woefully underused. The county commissioners in Teton, Sheridan and Sublette counties adopted the tax deferral program. But only five homeowners, all of them from Teton County, have taken advantage of the program, said Marvin Applequist, administrator of the property tax division of the Department of Revenue.

The county issues a lien against the property of participants who take advantage of the program. People don't want to pass on the tax liability to their heirs and so have found other ways to pay their taxes, such as reverse mortgages, Applequist said.

Jennings' bill would change the poverty level for applicants from 150 to 250 percent of poverty. Currently a homeowner must meet the income level and be 62 years old or disabled, or lived in their home for eight years.

The bill opens it up for people who can't meet the income guidelines but are otherwise qualified by age, disability or residency.

"It's another option out there," Jennings said.

Star-Tribune reporter Jared Miller contributed to this report.

Contact Joan Barron at joan.barron@trib.com or by phone at 307-632-1244.