Montana Democrats and Republicans agree on one thing – Montanans need tax cuts.
Beyond that, there are a number of proposals and plans, including Montana Gov. Greg Gianforte’s, on how to achieve lowering taxes and still end up with a constitutionally-mandated balanced budget.
Previously, Gianforte presented his budget to the lawmakers, and it held the line on spending and also proposed several tax cuts. For example, it included a reduction in the state income tax rate and taxation on business equipment.
“The governor’s tax proposal also will make Montana more competitive with our Mountain West neighbors after years of losing out on good-paying jobs to them,” said Brooke Stroyke, a spokeswoman for Gianforte said in response to the Democrats’ latest proposals.
On Thursday, the legislative Democrats rolled out a trio of bills that focus on three areas, including earned-income tax credits, providing property tax credits and exempting low-income Montanans from paying tax on Social Security income.
Democratic leaders said the total amount to fund these cuts would take around $50 million, and Democrats propose restoring income tax levels to the 2003 rates for those earning more than $500,000 per year. Currently, the rate is 6.9 percent and this would raise it to 8.9 percent.
“Right now, those working in the service or retail industry are paying the same rate as the governor and other millionaires,” said Rep. Kim Abbott, D-Helena.
Meanwhile, the governor’s proposal would reduce the rate for all Montanans from 6.9 percent to 6.75 percent.
“It does contradict the governor’s plan in who gets the benefits and how it’s paid for,” Abbott said.
Senate Minority Leader Jill Cohenour, D-East Helena, presented Senate Bill 10, which would provide an income tax credit that would be available to property owners as well as renters. She explained that renters would be given a credit based on a formula. She estimated the benefit to the average renter would be $466 and $979 for homeowners.
“When you give those who would be helped by this legislation $1, you know it will go right into the local economy,” Cohenour said.
Rep. Emma Kerr-Carpenter, D-Billings, is carrying legislation, LC1532, to expand Montana’s Earned Income Tax Credit from 3 percent to 10 percent of the federal credit. In 2017, the legislature established the tax-credit program, which benefits an estimated 70,000 Montanans. The new proposal would translate to a raise of $3.50 per hour for those it helps, she said.
Rep. Dave Fern, D-Whitefish, is carrying a bill, LC2676, which will would exempt Social Security income, now taxable by the state, on residents on middle and low incomes.