GOP tax relief bills advance; Gov praises progress, but Dems unveil own plans for $2B surplus

By: - February 2, 2023 5:57 pm

Speaker of the House Matt Regier, R-Kalispell. (Blair Miller/The Daily Montanan)

The state of Montana has an extra $2 billion or so packed in its pocket, according to the Governor’s Office.

The best plan for those dollars?

This week, Democrats unveiled their idea, and they also shot criticisms at plans from Republicans that have already steamed through the House.

“Instead of embarking on a billion dollar spending spree, Montana Democrats will take a responsible approach to the budget surplus, saving for the future and putting Montanans’ money to work in our communities,” said Senate Minority Leader Pat Flowers, D-Belgrade, in a statement.

But Thursday, Republican Gov. Greg Gianforte said he was encouraged by the progress during the session for getting Montanans tax relief with “the largest tax cut ever.”

“We’ve been clear. Montanans have overpaid their taxes, and we need to give it back,” Gianforte said at a press conference.

A package of five bills now moving to the Senate after clearing the House on Thursday includes a property tax rebate, an income tax rebate and an expanded business equipment tax exemption, among other proposals. Gianforte said the business equipment tax measure will help 5,000 small businesses, farms and ranches.

A sixth bill, to pay down state debt, is expected to pass the House on Friday.

The governor also said his administration is proposing a $1,200 child tax credit and an adoption tax credit.

He’s said he’d like to see bills on his desk to sign as soon as possible, and he reiterated that message Thursday when it comes to the $1 billion in property and income tax relief for Montanans.

“They deserve it. And they need it without further delay,” Gianforte said.

(Earlier, he had said he was “shocked” when a House committee temporarily tabled a property tax relief proposal. The committee cut the amount in half.)

But Democrats want to tap the brakes on the package of bills, which they describe as “irresponsible spending.” They have asked the GOP to slow down and stop helping rich people so much — they don’t need it.

“This is irresponsible and short sighted,” said House Minority Leader Kim Abbott, D-Helena, in a statement. “How does a one-time payment help Montana seniors afford their property taxes next year?”

Or, she said, workers who need housing or families who need child care?

Democrats have a different plan, which they unveiled earlier in the week.

They would like to spend $500 million on immediate relief for priorities such as workforce housing, affordable child care and senior care.

They’d also like to put $1 billion into a permanent trust, similar to the coal trust fund, where the principle remains intact.

“We can count on it being there, our kids can count on it being there, and their kids can count on it being there,” said Flowers at a news conference Tuesday.

Hannah VanHoose, with the House Democrats, said they weren’t able to have their regular meeting with the Governor’s Office this week, but the Montana Future Fund will be on the agenda next week.

This session, the Democrats have a “super minority,” if that’s the other side of the coin when Republicans hold a “supermajority.” However, Flowers said there’s interest in the idea of a trust fund, and members of his party are courting support.

“Nearly everybody recognizes the opportunity that this kind of surplus represents and that it makes sense to save some of this for the future,” he said.

In a news release, House Democrats also touted a couple of bills heard this week they described as “fair tax relief,” House Bills 280 and 285.

The former would provide property tax relief for homeowners and renters, and the latter would increase the Earned Income Tax Credit up to 60% of the federal credit to help more working families. Neither has gotten through committee yet.

A GOP bill, Senate Bill 121, also ups the EITC, but it would go from 3% to 10%. That bill, which also reduces the income tax rate, passed the Senate on second reading and is moving forward.

Thursday at a press conference, Republicans said the meaty surplus is due to the “industrious sacrifice of dedicated taxpayers.”

Speaker of the House Matt Regier of Kalispell said Republicans agree the money belongs to working Montanans, and they’re excited to send it back.

He disputed the criticism from Democrats that the Republican plan is “reckless” since they’re taking care of families and businesses. Republicans also have argued those with more money pay the lion’s share of the taxes so they should get more relief.

“(I’m) happy to know we’re one step closer to putting money back in pockets of more than 460,000 hardworking taxpayers,” Regier said.

Reporter Blair Miller contributed to this story.

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Keila Szpaller
Keila Szpaller

Keila Szpaller is deputy editor of the Daily Montanan and covers education. Before joining States Newsroom Montana, she served as city editor of the Missoulian, the largest news outlet in western Montana.