Money illustration (Photo via Pixabay | Public Domain).
Leaders from the Montana Democratic party praised aspects of Republican Gov. Greg Gianforte’s budget, like the child tax credit and property tax relief, but said his plans don’t go far enough to offer long-term relief.
House Minority Leader Kim Abbott of Helena said she was “thrilled” Gianforte incorporated a child tax credit into his budget, which she said was a long-term Democratic priority.
Gianforte proposed a $1,200 child tax credit for children less than 6 years-old and a $5,000 adoption tax credit.
“But at the same time, we don’t know if that’s permanent, we don’t know if it’s refundable, and it needs to be both of those things to do what it’s meant to do,” Abbott said Wednesday. “A family’s paying about $9,000 sometimes for a slot at a childcare center, and that’s if they’re lucky enough to get a slot to begin with.”
During the summer Democrats outlined priorities for how they wanted to see the $2 billion in budget surplus allocated during the upcoming session, with childcare being one of them.
A bill draft requested by Sen. Shannon O’Brien, D-Missoula, would, as Abbott explained, bring the eligibility for the Best Beginnings program up to what it was when there was funding through the American Rescue Plan Act. The program offers low-income families scholarships to help pay for childcare.
In a Wednesday interview, O’Brien said childcare affordability is a high priority and bipartisan issue. She said specifics are still being worked out.
“When we don’t have the freedom to go back to work because we can’t find childcare, it’s just not fair,” O’Brien said.
Senate Minority Leader Pat Flowers of Belgrade said that Gianforte’s plan for property tax relief is a “one time only” fix and that there is a need for an ongoing solution.
The Governor said his plan would provide $500 million in property tax relief in part through a $1,000 rebate that would be available to homeowners once a year for the next two years.
“A subsidy in one year or two years is not going to solve the problem,” Flowers said.
Democrats are looking to re-introduce legislation that would cap property taxes to a percentage of annual income. O’Brien introduced the bill during the 2021 session that ultimately did not pass. O’Brien said it was unclear why it didn’t pass, but that she’s hoping this time they can produce something everyone can agree on.
Another tool for tackling rising housing costs that Flowers said Democrats were going to pursue was a tax incentive for landlords willing to offer rentals below market rates.
“As opposed to increasing housing supply that could actually have an immediate impact on those that are just trying to find affordable rentals,” Flowers said.
When asked about how to understand the market rate for rentals, Flowers said those details are yet to be addressed, but it would likely require the creation of an index to describe market rates.
“We’re still in the process of working out those details of what that index would look like and then how you would scale, for example, an income tax credit to the amount that you’d be willing to rent below market,” Flowers said.
Abbott also pointed to a bill draft request she submitted that would establish a workforce housing trust fund.
O’Brien said another idea that came out of the Revenue Interim Committee was a tax credit for lower-income renters and homeowners for up to $1,300 that would be implemented on a sliding scale.
“The governor’s budget includes a tax credit for homeowners, but it really doesn’t address renters,” she said. “So this would help out those people who are making under $45,000 a year, either way, renting or home owning.”
Abbott said the democratic caucus will work to hold Republicans accountable for policies that prioritize the wealthiest in the state. The proposed budget would lower taxes for top earners from 6.5 percent to 5.9 percent.
She spoke to the responsibility of governing, as they hold a supermajority in the legislature and also the Governor’s office.
“But where we can work with Republicans to deliver for communities, our whole caucus is up for that,” she said.
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