{"id":17040,"date":"2017-04-09T22:09:06","date_gmt":"2017-04-10T04:09:06","guid":{"rendered":"http:\/\/lastbestnews.com\/site\/?p=17040"},"modified":"2017-04-09T22:29:50","modified_gmt":"2017-04-10T04:29:50","slug":"making-sense-of-legislatures-surviving-tax-proposals","status":"publish","type":"post","link":"https:\/\/montana-mint.com\/lastbestnews\/2017\/04\/making-sense-of-legislatures-surviving-tax-proposals\/","title":{"rendered":"Making sense of Legislature’s surviving tax proposals"},"content":{"rendered":"
\"em\"<\/a>

Freddy Monares\/UM Community News Service<\/p>

Montana House Speaker Pro Tempore Rep. Greg Hertz, R-Polson, said Republicans don’t see any sense in addressing short-term revenue problems with new or increased taxes.<\/p><\/div>\n

HELENA \u2014 When it comes to balancing the state budget, there are two schools of thought\u2014raise taxes and generate revenue, or cut spending and save money.<\/p>\n

With the state facing a budget shortfall, that ideological difference has become all the more prominent throughout Montana\u2019s 65th legislative session. Often, it defines party lines.<\/p>\n

In Gov. Steve Bullock\u2019s original budget proposal, he suggested increasing a variety of taxes, including taxes on cigarettes and medical marijuana. Perhaps most significantly, he also proposed a tax increase on Montana\u2019s top earners.<\/p>\n

But with Republicans holding majorities in both the House and Senate, not many of these ideas are likely to become public policy.<\/p>\n

\u201cOur existing governor and the candidate for governor both campaigned on no tax increases,\u201d said Speaker Pro Tempore Rep. Greg Hertz, R-Polson. \u201cYet as soon as he\u2019s off the election, our existing governor comes to us and proposes several tax increases.\u201d<\/p>\n

Hertz said the idea of tax increases generally does not sit well with Montana Republicans.<\/p>\n

\u201cWe have a short-term revenue problem, and you don\u2019t fix short-term revenue problems with tax increases,\u201d Hertz said. \u201cThat\u2019s generally the Republican philosophy going forward here.\u201d<\/p>\n

Democrats disagree.<\/p>\n

\u201cNo new taxes is such a reductive, easy way to avoid a conversation about the real needs in our communities,\u201d said Rep. Kim Abbott, D-Helena. She said Montanans recognize the need for \u201csmart investments\u201d in their communities, and that taxes are a big part of meeting their needs.<\/p>\n

With the session in its final weeks, dozens of tax bills are still alive and being debated by lawmakers. With so many proposals, it can be difficult to understand how exactly the Legislature might affect Montanans\u2019 taxes. Here, then, is a guide to all the ways taxes could change over the next two years because of the 2017 Legislature.<\/p>\n

Consumptive taxes <\/b><\/h5>\n

Most of the this session\u2019s surviving taxes fall under the category of consumptive taxes, or use taxes. These apply to goods and services. Think gas taxes, bed taxes and cigarette taxes, for instance. These are some of the most controversial proposals of the entire legislative session.<\/p>\n

\u201cWe don\u2019t think it\u2019s fair on the citizens of Montana,\u201d Hertz said. \u201cWe need to look at efficiency in government before we need to raise any taxes.\u201d<\/p>\n

\"CapreAir_Variable\"<\/a><\/div><\/div>Abbott, however, said many of the proposed taxes could help reduce harmful behaviors. A proposed tax on tobacco would have raised the price of a pack of cigarettes by $1.50, which supporters argued would help prevent young Montanans from smoking in the first place. That bill was effectively killed in the House Taxation Committee last week.<\/p>\n

Surviving consumptive taxes include:<\/p>\n

\u2666\u00a0House Bill 473<\/a>, introduced by Rep. Frank Garner, R-Kalispell, would increase the state fuel tax by 8 cents a gallon. The bill is perhaps the most notable consumptive tax of the session, and would provide roughly $58.5 million in state special revenue for highway construction projects in 2018. The bill passed the House on a vote of 54-26, and will now move to the Senate for more debate.<\/p>\n

\u2666 Senate Bill 333<\/a>, introduced by Sen. Mary Caferro, D-Helena, which would tax medical marijuana sales and providers at a rate of 4 percent until June 2018, and 2 percent thereafter. The bill was roundly criticized by Republicans. Hertz called it a \u201ctax on the sick and disabled.\u201d It passed the Senate 32-18 and is now in the House.<\/p>\n

\u2666\u00a0Senate Bill 251<\/a>, introduced by Sen. Tom Facey, D-Missoula, would revise the lodging tax to include \u201cshort term rentals\u201d like Airbnbs, which are operated by property owners and rented for less than 30\u00a0days to visitors. It passed the Senate 31-19.<\/p>\n

\u2666\u00a0Senate Bill 376<\/a>, introduced by Sen. Jill Cohenour, D-Helena, would increase the tax on lodging to 3.5 percent from its original 3 percent. Revenue from this increase would fund the construction of the Montana Heritage Center, a museum of Montana history originally requested as part of a broad infrastructure package proposed by Gov. Bullock. House Bill 660<\/a>, introduced by Rep. Jenny Eck, D-Helena, essentially makes the same change for the same purpose. SB 376 passed the Senate 28-22, while HB 660 passed the House 54-46.<\/p>\n

\u2666\u00a0House Bill 205<\/a>, introduced by Rep. Alan Redfield, R-Livingston, would institute a tax on electric vehicles, as they don\u2019t pay gas taxes like drivers of traditional vehicles. The funds generated from this fee, collected annually, would go toward funding Montana highway projects. It passed the House 58-42.<\/b><\/p>\n

Income and property taxes <\/b><\/h5>\n

The most recent significant change to Montana\u2019s income taxes was in 2003, when the Legislature reduced the number of tax brackets. Abbott said lawmakers at the time reduced the top tax rate from 11.9 percent to 6.9 percent, effectively putting Montanans who earn roughly $17,000 per year in the same bracket as those who earn $500,000.<\/p>\n

Several bills proposed this session would have increased the tax rate for top earners. All of those failed.<\/p>\n

\u201cIt made sense to have the folks that benefited most from that last change to the income tax system pay a little bit more,\u201d Abbott said.<\/p>\n

Top Republicans have repeatedly disagreed with that stance throughout the session. In January, House Appropriations Chair Nancy Ballance, R-Hamilton, said she opposed the idea that high-income Montanans should have to pay higher taxes.<\/p>\n

\u201cIf we start taxing the job creators \u2026 how will we get the high-wage jobs that we need to get to bring people up from a wage level they are now, to where we think they need to be?\u201d Ballance said.<\/p>\n

Several bills dealt with Bullock\u2019s proposal to increase the tax rate for higher-income Montanans. The most substantial\u00a0increase would have been House Bill 330, introduced by Abbott. HB 330 missed the deadline for transmittal after having been tabled by the House Taxation Committee. It would have increased the income tax rate to 8.9 percent for Montanans who earn $400,000 or more each year.<\/p>\n

While property taxes were a big\u00a0talking point in the 2015 session, this time around, the discussion of that subject has been relatively quiet. One remaining bill, however, would exempt some properties from certain property taxes. Senate Bill 94<\/a>, introduced by Sen. Keith Regier, R-Kalispell, would allow properties whose value is substantially\u00a0lower than the land they sit on to avoid paying property taxes. In order to be eligible, the land would have to be valued at 150 percent of the property\u2019s value. The bill passed the Senate 33-17, and was approved by the House Taxation Committee last week.<\/p>\n

Tax credits<\/b><\/h5>\n

Tax credits are essentially tax reimbursements. They are often given to individuals or businesses who engage in a certain kind of behavior, like investing in an industry or hiring a certain kind of employee. As with\u00a0all things deal with taxation, lawmakers have differing opinions on their effectiveness.<\/p>\n

\u201cTax credits are meant to change behavior, and incentivize certain behavior,\u201d Abbott said. \u201cI think it has been hard to prove the effectiveness of that kind of tax policy, generally.\u201d<\/p>\n

Hertz disagreed, saying, \u201cA lot of these credits that are still alive are targeted credits, where they\u2019re encouraging expansion of business. As business expands, the credit will offset, and we won\u2019t see a loss in reduction to revenue at the state level.\u201d<\/p>\n

Surviving tax credit bills include:<\/p>\n

\u2666\u00a0House Bill 187<\/a>, introduced by Rep. Jim Hamilton, D-Bozeman, would provide a tax credit for those who invest in small businesses. The credit would reimburse up to 30 percent of the total investment, as long as the amount invested exceeded $50,000. The credit would cap at $75,000 per year of investment, and could not exceed $750,000 for all years of investment combined. HB 187 passed the House on a vote of 63-37, and will soon be debated on the Senate floor.<\/p>\n

\u2666\u00a0House Bill 308<\/a>, introduced by Rep. Casey Schreiner, D-Great Falls, would give tax credits to employers who hire apprentices. This policy was initially proposed by Bullock, who said \u201cemployers that have had apprenticeship programs find that they have a committed, talented and trained workforce.\u201d The bill would give employers a credit of $1,000 for each apprentice they took on, and $2,000 if that apprentice were a military veteran.<\/p>\n

\u2666\u00a0House Bill 391<\/a>, introduced by Rep. Tom Jacobson, D-Great Falls, provides for an earned income tax credit. The federal government already provides for such a credit, but HB 391 gives an additional credit to low-income workers of 3 percent of their federal credit. The money would be issued through a tax refund. In general, Abbott said, this is the only tax credit she believes is effective, calling it \u201cthe most successful federal anti-poverty program.\u201d<\/p>\n

Michael Siebert is a reporter with the UM Community News Service, a partnership of the University of Montana School of Journalism and the Montana Newspaper Association.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"

HELENA \u2014 When it comes to balancing the state budget, there are two schools of thought\u2014raise taxes and generate revenue, or cut spending and save money. With the state facing a budget shortfall, that ideological difference has become all the more prominent throughout Montana\u2019s 65th legislative session. Often, it defines party lines.<\/p>\n","protected":false},"author":144,"featured_media":17061,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,14],"tags":[5363,5729,1122,782],"class_list":["post-17040","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-montana","category-news","tag-greg-hertz","tag-kim-abbott","tag-montana-legislature","tag-steve-bullock","prominence-top-story"],"_links":{"self":[{"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/posts\/17040","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/users\/144"}],"replies":[{"embeddable":true,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/comments?post=17040"}],"version-history":[{"count":5,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/posts\/17040\/revisions"}],"predecessor-version":[{"id":17064,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/posts\/17040\/revisions\/17064"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/media\/17061"}],"wp:attachment":[{"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/media?parent=17040"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/categories?post=17040"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/tags?post=17040"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}