Gianforte unveils his first budget

The plan holds spending, but gives relief to business, teachers and provides addiction services

Greg Gianforte delivers his inauguration speech after being sworn in as the 25th governor of Montana.

In his 2023 biennium budget announcement Jan. 7, Gov. Greg Gianforte focused on lowering taxes, reducing spending and enticing private businesses to remain — or relocate — in Montana.

Dubbed the “Road Map to the Montana Comeback,” some of Gianforte’s proposals included:

  • Decreasing general fund spending by $100 million during the two fiscal years from the previous administration’s proposed budget
  • Reducing income, property and business equipment taxes
  • Investing in trades education
  • Providing $2.5 million of incentives to raise starting teacher pay
  • An additional $23.5 million a year to substance abuse and prevention programs.

Rep. Llew Jones, R-Conrad, the House Appropriations Committee Chairman, said that he was generally pleased with the governor’s proposal at first blush, though “the devil’s in the details.”

“What I would note off the top is that the state pay plan is in there, K-12 inflation (funding) is in there, teacher pay increases are in there,” Jones, R-Conrad, said. “Those are all of the big items.”

Jones said the budget was predictable in that Gianforte wants to hold the line on spending, seek cuts where possible but generally leave existing programs like Medicaid. To some Republicans, this may not go far enough, Jones acknowledged; for others, it may be too far.

“I know I’m going to do my effort to try to deliver this vision that people who seemed to vote for the man’s request,” Jones said.

Gianforte’s plan to reduce general fund spending by $100 million compared to former Gov. Steve Bullock’s proposed budget will eliminate the $25 million transfer from the budget stabilization fund that the Bullock had proposed. Most of the savings, Gianforte said, will come from eliminating state spending increases proposed by the previous administration and not proposing cuts to essential services.

In an effort to keep Montana workers in the state and attract new ones, Gianforte proposed cutting the income tax from 6.9% to 6.75%, which he said would result in more than half of Montanans seeing an income tax cut of almost $30 million per year.

Keeping with the message to make Montana more attractive for businesses, Gianforte said he wants to incentivize business relocations by exempting new businesses that bring “long-term jobs” to the state from the capital gains tax.

Gianforte is also proposing to increase the business equipment tax exemption from $100,000 to $200,000, which he said will provide relief to 4,000 small businesses. He said he heard from small business owners who described the process of valuing their equipment as needlessly burdensome.

“This budget establishes the entrepreneur magnet, providing incentives for business to come to Montana and bring their high paying jobs with them,” Gianforte said.

To address the skills gap that he said small business owners have asked him for, he is proposing a $1 million investment in trades education by providing businesses a credit for employee and education training.

Montana was ranked by USA Today as the second-worst state to be a teacher in 2019 and received an “F” from The National Council of Teacher Quality. To help make Montana a better place for teachers, Gianforte said he wants to provide $2.5 million in incentives for local school boards to improve the starting salary for teachers through the Tomorrow’s Educators Are Coming Home Act.

“Every two years, like clockwork, reappraisals drive up Montana’s property tax bills,” Gianforte said.

That’s why he said he wants to increase funding by 25% to programs that provide property relief to to low-income homeowners like disabled vets and seniors

Gianforte’s budget does not dedicate any new funds for battling the coronavirus pandemic; instead he said that his administration hopes to get sufficient funding from federal COVID-19 aid packages, and is awaiting guidance from Washington before committing to spending any additional state dollars.

To help with recidivism, the increase in violent crime, an increase in drug addiction and lack of mental health services, Gianforte said he will provide 14 new parole and probation officers, two more district judges in Gallatin and Flathead counties. It will also include funding to continue five drug courts, he said.

He also announced he wants to spend an additional $23.5 million in state and federal dollars to the Department of Public Health and Human Services for substance prevention and treatment programs.

He said his budget will also devote marijuana tax revenue and part of the tobacco tax settlement to the HEART Fund or Healing and Ending Addiction through Recovery and Treatment Fund.

“The heart fund will help fill the gaps in our current system. And when leveraged with federal Medicaid funds will fund a full continuum of substance abuse prevention and treatment programs in the communities across the state,” he said.

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Keith Schubert
Keith Schubert is a reporter for the Daily Montanan. Keith was born and raised in Wisconsin and graduated from the University of Minnesota in 2019. He has worked at the St.Paul Pioneer Press, Milwaukee Journal Sentinel and most recently, the Asbury Park Press, covering everything from local craft fairs to crime and courts to municipal government to the Minnesota state legislature. In his free time, he enjoys cheering on Wisconsin sports teams and exploring small businesses.
Arren Kimbel-Sannit
Arren Kimbel-Sannit is an Arizona-bred journalist who has covered politics, policy and power building at every level of government. Before getting his dose of northern exposure, Arren worked as a reporter in all manner of Arizona newsrooms, for the Dallas Morning News and for POLITICO in Washington, D.C. He has a special interest in how land-use decisions affect working-class people, which he displayed through reporting on the epidemic of pedestrian deaths in the U.S. for the Los Angeles Times and PBS Newshour. He's also covered housing, agriculture, the Trump presidency and more.