Montana House endorses package of tax reduction, budget bills

HELENA — The Montana House has given first approval to a package of budget and tax bills, including several tax directives approved by Gov. Greg Gianforte.

On Wednesday, members of the House of Representatives passed six bills in a first vote. Together, they allocate about $1 billion from the state’s more than $2 billion budget surplus and make additional longer-term changes to tax rules:

  • House Bill 192, sponsored by Rep. Bill Mercer, R-Billings, would use $480 million of the surplus to provide income tax rebates of up to $1,250 for those who are single and $2,500 for those who submit an application together.
  • House Bill 212, sponsored by Rep. Josh Kassmier, R-Fort Benton, would exempt corporations from state business equipment tax if they have less than $1 million. The current exemption is $300,000.
  • House Bill 221, sponsored by Rep. Tom Welch, R-Dillon, would replace the current tax deduction for long-term capital gains with a reduced tax rate on those gains.
  • House Bill 222, sponsored by Welch, would use approximately $280 million in excess funds to provide property tax rebates of up to $500 over the next two years for Montana real estate owners’ primary residences.
  • House Bill 251, sponsored by Rep. Llew Jones, R-Conrad, would allocate $150 million toward paying down federal debt with the goal of reducing future required payments.
  • House Bill 267, sponsored by Rep. Courtenay Sprunger, R-Kalispell, would deposit $100 million into a new state account where it would be used as appropriate funds to secure federal highway and bridge grants.

Five of the six bills were passed almost entirely at the party level, with a majority of Republicans in favor and a minority of Democrats against. HB 267 was accepted unanimously.

Republicans said the package would take important and quick steps to return excess money to Montanans, who paid for it in taxes. Democrats called the bills “freebies” for the wealthy and said the money was better spent addressing needs across the country.

At the start of the session, some of these bills had overlapping provisions, but they were amended in the House Appropriations Committee to bring them into line. The committee also added “coordinating language,” stating that if any of the packages failed, the amount spent on each of the bills would be halved.

During Wednesday’s debate, House Speaker Matt Regier told R-Kalispell that tying the bills together was the best way to ensure no group of Montanans were “left out” from the benefits of returning the surplus.

“One of these ideas alone might be preferable to the next; I know each of us has our own ideas about how to manage this money,” he said. “I know you have good ideas, but the person sitting next to you has good ideas too. We are a large group of legislators; we have a huge range of ideas.”

Democrats opposed the move, saying GOP leadership has expedited the process and they should wait for more information on the revenue before making a final decision on how the surplus will be used. They unsuccessfully proposed changes to remove the coordinating language from each of the bills.

“In that kind of deal where they’re all tied together and they all go or none of them go, the public doesn’t have the input it needs to have,” said Rep. Mary Caferro, D-Helena. “It truncates the public process, it’s complicated, it’s an inside game.”

The House of Representatives is expected to hold a final vote on the bills on Thursday. If they pass, they are sent to the Senate for consideration.

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